The fastest way to find penny stocks on Robinhood is to create a custom stock screener and set the maximum share price to $5. Then narrow the results using average volume, market capitalization, sector and recent price movement.
Robinhood generally defines a penny stock, also called a low-priced stock, as a stock trading below $5 per share. A share price below $5 does not mean that a company is cheap or attractively valued. Penny stocks can trade on major exchanges or in the over-the-counter, or OTC, market.
How to Use the Robinhood Penny Stock Screener
Use Robinhood's custom screener to start with the $5 price limit, then narrow the results with filters that show trading activity, company size and recent performance.
In the Robinhood App
- Open Investing.
- Under Lists, select Create watchlist or screener.
- Select Create screener.
- Choose Custom screener.
- Add a Share price filter with a maximum price of $5.
- Add filters such as average volume, today's volume, market cap, sector and 52-week high or low.
- Save the screener and review the results.
Robinhood says its stock screener is available in the app and on web classic. It includes more than 20 filters, including share price, average volume, market capitalization, daily percentage change and 52-week performance.
On Robinhood Web Classic
- Go to Lists.
- Select the + icon.
- Choose Create screener.
- Select Custom screener.
- Set the maximum share price to $5.
- Add volume, market cap and other filters.
- Save the screener.
If you use Robinhood Legend, the Scanner widget adds filters for price, volume, market capitalization, technical indicators and other data points.
Which Filters Should You Use?
A $5 price filter alone can return a long list. Add filters that help you judge liquidity, company size, industry and recent price behavior.
| Robinhood Filter | What It Tells You | Why It Matters |
|---|---|---|
| Share price | The current price of one share | Sets the penny stock price range |
| Average volume | The average number of shares traded over approximately 30 days | Low-volume stocks can be difficult to buy or sell |
| Today's volume | How many shares have traded today | Helps identify unusual activity |
| Market cap | The company's total equity value | Keeps you from judging a company only by its share price |
| Sector | The company's industry | Makes it easier to compare similar businesses |
| 52-week high or low | The stock's recent trading range | Shows whether the price is near a recent extreme |
| Earnings date | When the company is expected to report results | Identifies events that may increase volatility |
Market capitalization matters because the share price alone says little about a company's size. A company with a $1 share price and 1 billion shares outstanding has a $1 billion market capitalization. A company with a $4 share price and 10 million shares outstanding has a $40 million market capitalization. The lower-priced stock is not automatically cheaper or better valued.
A Practical Starting Screen
A starting screen could use these settings:
- Share price: $0 to $5
- Average volume: Set a minimum that produces stocks with regular trading activity
- Market cap: Use this to separate very small companies from larger exchange-listed companies
- Sector: Choose an industry you understand
- 52-week performance: Review stocks near a recent low or high, but do not treat this filter as a buy signal
There is no universal minimum volume or market capitalization that makes a penny stock safe. The right threshold depends on your strategy. Very low volume can create wider bid-ask spreads and make it harder to exit a position.
How to Check Whether Robinhood Supports a Penny Stock
After finding a ticker, open its Robinhood detail page and check whether you can select Trade or Buy.
Robinhood supports most U.S.-listed stocks and certain OTC equities, but it does not support every penny stock. A stock may be unavailable because it trades on an unsupported foreign exchange, has been delisted, is undergoing a corporate action or is otherwise untradeable.
A stock that appears in search results may still be unavailable for a new purchase. A delisted security may show only a position-close option. In that case, you may be able to sell an existing holding but not buy additional shares.
Exchange-Listed Penny Stocks Versus OTC Penny Stocks
| Type | Description | Main Consideration |
|---|---|---|
| Exchange-listed penny stock | Trades on an exchange such as Nasdaq or the New York Stock Exchange | Exchange listing does not remove volatility or fraud risk |
| OTC penny stock | Trades through an over-the-counter market rather than a national exchange | Public information and liquidity may be more limited |
Not every penny stock is an OTC stock. Some exchange-listed companies trade below $5 per share, while many OTC securities also trade at low prices. FINRA warns that exchange-listed status does not guarantee that a low-priced stock is safe.
Robinhood does not support fractional shares for OTC stocks. Fractional-share trading is generally limited to eligible National Market System securities listed on exchanges such as Nasdaq and the New York Stock Exchange.
Review a Penny Stock Before Buying
Use Robinhood to find candidates, then research the company outside the screener. Before placing an order, check:
- SEC filings: Review recent 10-K, 10-Q and 8-K filings through the SEC's EDGAR database.
- Revenue and cash: Check whether the company has revenue, cash reserves and a credible business model.
- Debt and dilution: Look for new shares or warrants that could reduce existing shareholders' ownership.
- Trading volume: Review average volume and the bid-ask spread.
- Corporate history: Look for repeated name changes, ticker changes, reverse stock splits or major changes to the business model.
- Promotional activity: Be cautious when the investment case comes mainly from social media, text messages, newsletters or aggressive online promotion.
FINRA identifies low volume, limited public information, sharp price movements and unsolicited promotions as warning signs. The SEC also warns that investors in penny stocks should be prepared to lose their entire investment.
Use a Limit Order When Trading Low-Volume Stocks
For a low-volume stock, a limit order gives you more control than a market order. It lets you set the highest price you are willing to pay or the lowest price you are willing to accept.
Robinhood states that OTC securities remain limit buy orders with a preset limit price during all trading sessions. Investor.gov also explains that limit orders can help prevent you from buying at a higher price or selling at a lower price than intended.
A limit order does not guarantee execution. If there are not enough sellers at your limit price, the order may remain unfilled.
Why a Penny Stock May Be Difficult to Sell
Low liquidity can make a penny stock harder to sell. It can lead to:
- Wider bid-ask spreads
- Larger price changes from relatively small trades
- Partial order fills
- Delays when trying to exit
- A sale price that is well below the displayed quote
FINRA describes low-priced securities as speculative and warns that low trading volume can make them difficult to sell.
Bottom Line
A Robinhood screener can narrow the list of penny stocks, but it cannot tell you whether a company is sound or whether you will be able to exit the trade. Confirm that Robinhood supports the ticker, review the company's filings, check trading liquidity and use a limit order when appropriate.
A stock trading below $5 may still carry a high risk of severe loss, dilution or manipulation.