How to Invest in Small Tech Stocks

By Contributing Writer

  • Overview

    Purchasing stocks is one of the most common forms of investment. There is a wide variety of stock types available, ranging from large companies to micro-cap companies and from manufacturing titans to small service oriented companies. Technology stocks have been historically volatile, and small technology stocks even more volatile. Still, the same high volatility that makes them risky also makes them potentially very profitable.
    • Step 1

      Open a brokerage account or other account which allows for the purchase of stock market securities. This will require filling in some paperwork, an ID and a signature, in order to satisfy provisions of the Patriot Act and anti-money laundering laws.
    • Step 2

      Fund the account. In order to buy anything, there will need to be funds available in the account. Many accounts can be funded on opening by including a check or transfer instructions with the application.

    • Step 3

      Determine which small tech stocks you would like to purchase. Your brokerage account should come with ways to access professional research whether online or through a broker. Combine this information with your own research to determine which small tech stocks you would like to purchase.
    • Step 4

      Determine what type of order to use. Stocks can be purchased via a market order, limit order or stop order. A market order is the fastest and purchases your stock regardless of the current price. A limit and stop order will only execute when the price of the stock meets certain criteria. This can be important for fast moving stocks to avoid paying more than you intend if the price is rising rapidly.
    • Step 5

      Enter your order. Either online or via a call to your broker, enter your order which includes the ticker symbol of the stock you wish to purchase, the number of shares you wish to buy, and the type of order.
    • Skill: Moderate
    • Warning:
    • Beware of online tips especially in small thinly traded stocks. These tips are often part of a pump and dump scheme where the scammers post tips to get people to buy the stock and drive up the price and then sell a large number of share which causes the price to fall rapidly.

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