When you decide to buy shares of a certain penny stock you'll go online or call
your brokerage firm to place a order. Your broker acts as the middleman
between the buyer and the seller. The broker receives a commission for
this service. The broker enters the order. It goes to the trading floor.

A floor broker receives the order and goes to the designated spot on the
floor for trading that specific stock. The floor broker then buys the shares from a specialist and confirms the purchase to his trading department. Then the trading department confirms the trade to the brokerage firm.

The brokerage firm notifies the client (you) to complete the process. The
The American Stock Exchange and the New York Exchange operate in a
similar manner. The computerized online brokerages are able to handle
a normal market order trade and confirmation of your penny stock in just a few seconds.

OTC stocks trade a little differently. OTC stocks are listed on a computer
system that shows two prices for a share of penny stock called (bid and asked).
The asked price is the lowest price that a market maker will sell a stock.
The bid price is the highest price a market maker will pay to buy a stock.

Example: ($1.00 bid ... $1.12 asked). The difference between the two is
called the spread.

If you want to buy a share of a OTC penny stock you just go online or call your
brokerage firm to place a order. Your broker sends your order to the
trading room where the order is executed and your shares are purchased
as specified. (usually at bid/ask or sometimes between the spread)

Note! Some brokerages (may or may not) be what's know as a market-maker in a specific stock. Your brokerage could possibly have to go to
a market-maker (if they're not) to buy the stock for your account.

The competition among the market makers usually means the investor
will get the best price possible on a share of penny stock.

There have been many times that I've placed a order between the bid
and the asked price (the spread), and actually had the order fill within a
day or so. Example above: ($1.00 bid ... $1.12 asked) Enter a order at
$1.06. If you buy 5,000 shares of a particular penny stock and get your wish, you'll save about $300.