Penny stock trading on Fidelity is enabled through a one-time risk acknowledgment for each eligible account. Verify the instructions below against Fidelity's current interface on. Penny stocks often trade below $5 per share, but price alone does not determine whether Fidelity will accept an order.
Enable Penny Stocks on Fidelity.com
- Sign in to Fidelity.com.
- Select Accounts & Trade.
- Open Account Features.
- Select Brokerage & Trading.
- Open Advanced Features in your Trading Profile.
- Find Penny Stock Trading and select Sign up, Manage, or Start.
- Choose the Fidelity account you want to use.
- Review the penny stock risk disclosures.
- Accept the agreement.
- Confirm that the status shows Enabled.
Fidelity requires this acknowledgment because penny stocks can have limited public information, low liquidity, high volatility and a higher risk of fraud. The enrollment applies to one account at a time, so repeat the process for each eligible account you want to use.
Enable Penny Stocks in the Fidelity Mobile App
- Open the search function in the Fidelity app.
- Search for Penny Stock Trade Enrollment.
- Open the enrollment page.
- Select Start.
- Choose the Fidelity account you want to enable.
- Select Continue.
- Read and accept the required disclosures.
The selected account should then be enabled for eligible penny stock transactions.
Fidelity Penny Stock Eligibility at a Glance
| Item | Fidelity requirement |
|---|---|
| Risk acknowledgment | Required before buying or selling eligible penny stocks |
| Account coverage | Enrollment must be completed for each eligible account |
| Cash Management Account | Not eligible for penny stock trading |
| Fidelity Youth Account | Penny stock trading is unavailable |
| OTC securities | Some OTC designations cannot be purchased |
| Enrollment status | Look for Enabled in Account Features |
Cash Management Accounts cannot be enabled for penny stock trading. If you are using a CMA, you generally need an eligible Fidelity Brokerage Account instead. Fidelity Youth Accounts also exclude penny stock trading.
How to Place a Penny Stock Order After Enrollment
- Search for the company name or ticker symbol.
- Select Trade.
- Choose the enabled Fidelity account.
- Select Buy or Sell.
- Enter the number of shares.
- Review the quote, bid-ask spread and order details.
- Submit the order.
A limit order may be more suitable than a market order for a thinly traded penny stock. Low trading volume can create wide spreads or cause an order to execute at a price that differs sharply from the last quoted price. Fidelity also warns that penny stocks may be difficult to buy or sell at the desired price or time.
Why Can't I Buy a Penny Stock After Enabling the Feature?
Enabling penny stock trading only completes the account enrollment requirement. It does not make every low-priced or OTC security available.
The Trade Ticket Uses a Different Account
The acknowledgment applies to the account selected during enrollment. Check the account shown on the trade ticket and confirm that it is the same account you enabled.
The Account Is a Cash Management Account
Fidelity does not make Cash Management Accounts eligible for penny stock trading. Use an eligible brokerage account instead.
Fidelity Blocks the OTC Security
Fidelity blocks buy orders and opening transactions for OTC securities classified as:
- Expert Market
- Grey Market
- Caveat Emptor
These designations can indicate limited public information, low market activity or additional regulatory and investor protection concerns.
The Stock Has Limited Liquidity
A penny stock may be available for trading but still have very few buyers and sellers. This can result in:
- Wide bid-ask spreads
- Partial executions
- Delayed executions
- Difficulty selling the position
- Large price changes from relatively small orders
Fidelity lists limited public information, reduced listing standards, liquidity risk, volatility and potential fraud among the main risks of penny stocks.
The Order Type Is Unavailable
Some securities may not support fractional shares, dollar-based orders or certain trading sessions. If the order does not go through, try a whole-share limit order during regular market hours.
Penny Stocks vs. OTC Stocks
A penny stock usually refers to a low-priced stock, often one trading below $5 per share. An OTC stock is defined by where the security trades. The categories overlap, but they are not the same.
For example, a low-priced stock listed on Nasdaq is not automatically an OTC penny stock. Fidelity allows trading in many OTC and low-priced securities, but availability depends on the security, its market designation and the account type.
Bottom Line
Go to Accounts & Trade > Account Features > Brokerage & Trading > Advanced Features in your Trading Profile, then enroll the specific account under Penny Stock Trading. In the mobile app, search for Penny Stock Trade Enrollment.
If the option is unavailable, check that you are using an eligible Fidelity Brokerage Account and that the security is not classified as Expert Market, Grey Market or Caveat Emptor.