The short answer? Yes.
Robinhood does offer access to some penny stocks, but with important limitations. While traders can buy and sell certain low-priced stocks listed on major U.S. exchanges, Robinhood does not support over-the-counter (OTC) markets, where many penny stocks trade.
It’s important to keep that difference in mind, especially for traders who follow penny stock strategies that rely on a broad universe of micro-cap names.
That’s why it’s best to understand what Robinhood allows and what it blocks to save time, reduce frustration, and help traders choose the right platform for their goals.
What Qualifies as a Penny Stock
Penny stocks are generally defined as shares trading under $5 per share by the U.S. Securities and Exchange Commission (SEC). Smaller companies often issue these stocks and tend to carry higher volatility and risk than large-cap equities.
There are two main categories of penny stocks.
- The first includes exchange-listed penny stocks, which trade on major exchanges such as NASDAQ, NYSE, or AMEX. These companies meet minimum listing standards, including governance requirements.
- The second category consists of OTC penny stocks, which trade on major exchanges and typically face less regulatory oversight. While both fall under the exact price definition, they operate in very different market environments.
Which Penny Stocks You Can Trade on Robinhood
Robinhood allows users to trade penny stocks that are listed on major U.S. exchanges. Even if the share price is under $5, as long as a stock trades on NASDAQ, NYSE, or AMEX and meets Robinhood’s internal requirements, it is generally available on the platform.
As of late 2025, here are some examples of exchange-listed penny stocks available on Robinhood:
- SoundHound AI (NASDAQ: SOUN) – A voice AI company focused on conversational interfaces for automotive and enterprise applications.
- BigBear.ai Holdings (NYSE: BBAI) – A data analytics and AI firm serving government and commercial clients.
- Richtech Robotics (NASDAQ: RR) – A robotics company developing automation solutions for hospitality and service industries.
Stocks trading at very low levels (between $0.10 and $0.50) usually have better access and liquidity. Robinhood regularly updates its list of tradable securities, so traders should always confirm availability directly within the app.
Exchange-Listed Penny Stocks Available
Robinhood supports penny stocks listed on the following exchanges:
- NASDAQ
- NYSE
- AMEX
These stocks benefit from exchange-level oversight and standardized reporting requirements. However, traders should note that fractional shares are generally not available for penny stocks. That means purchases usually require buying whole shares.
What Robinhood Does Not Allow You to Trade
This is where many traders get confused. Robinhood does not support OTC markets, including OTC Pink, OTCQB, or OTCQX. That means a significant portion of penny stocks, especially those trading well under $1, are completely unavailable on the platform.
A common question for new traders is, “Does Robinhood have penny stocks outside the major exchanges?” Since many of the most volatile penny stocks trade OTC, Robinhood’s restrictions significantly narrow what’s available. If a strategy relies on frequent OTC trading, Robinhood will not be a suitable platform.
OTC Markets and Pink Sheets Are Off-Limits
OTC markets facilitate trading outside traditional exchanges. Pink Sheet stocks, in particular, are known for thin liquidity and sharp price swings. These stocks often have lower reporting requirements, limited transparency, and higher volatility.
Robinhood restricts access to these securities primarily for regulatory compliance and risk-management reasons. That’s why users looking for broad OTC exposure will need to use a different brokerage.
Cryptocurrency and Options on Penny Stocks
Robinhood does offer cryptocurrency trading. But it operates separately from penny stock access. When it comes to options, availability is extremely limited for penny stocks.
Most low-priced stocks do not meet the liquidity and volume requirements needed to support options contracts on any platform, not just Robinhood.
In practice, traders should not expect options strategies to be viable for most penny stocks, regardless of the broker.
Why Robinhood Restricts Certain Penny Stocks
OTC stocks often lack consistent market makers, increasing execution risk. There are also higher compliance burdens associated with offering access to lightly regulated securities.
Additionally, many commission-free brokers take a conservative approach to protect less experienced users from excessive risk. These restrictions are not unique to Robinhood and are fairly standard across similar platforms.
Final Thoughts
Robinhood can work well for traders interested in exchange-listed penny stocks, but it is not designed for full access to the OTC market. Choosing the right tool from the start can prevent unnecessary limitations later.
So, before opening an account, it’s worth clarifying whether your approach focuses on regulated exchange listings or on deeper OTC exposure.
