Online Penny Stock Brokers
The financial industry can be tough to navigate and sorting through the waves of online penny stock brokers is just on part of the puzzle. I know one guaranteed way to lose money in the stock market—pick the wrong broker. Flashy ads and steak sizzle aside, they are not even close to being all equal. And when you’re trading penny stocks, your online stock broker selection is all the more critical.
Online Penny Stock Brokers Overview
We’re trading penny stocks online, which can mean anything from a $5 stock in a small company to stocks costing under one cent ($0.001 for example). Many brokers don’t care for this type of action, so they will hit your account hard with extra trading fees (or just prohibit the trading all together).
When searching for online penny stock brokers, you need to consider a few key points, such as:
- Does the stock broker offer a “deep discount” for your trading?
- Does the broker fit within the trading plan you will execute?
- Are there any minimum deposits and if so, are they acceptable?
- Are there any extra account fees?
- What is the commission per trade and how will this impact your overall penny stock trading plan?
- Is the online penny stock broker a name you can trust?
Online Penny Stock Brokers Warning
Here’s the deal. It’s hard for anyone, even myself, to flat out tell you what the best penny stocks broker is because the “best” depends on your financial situation and trading plan.
The biggest thing to ask yourself is what type of penny stocks will you be trading (amount and stock exchange). For example, I tend to trade penny stocks that are about $1 or greater in value and listed on NASDAQ or the OTCBB. Some brokers treat these trades as “normal.” However, if you start dealing in trades for stocks under $1 in value, your broker will probably add a special fee onto the trade, which is fairly minor at first.
However, the exception to the add-on fee for sub-$1 stocks really hits home when you’re trading in sub-penny stocks ($0.001 for example). Adding on say one penny when a stock is costing you 75 cents per share isn’t a capital buster. But, adding that same penny to a sub-penny stock is killer. So if you’re planning on trading in that realm, the online penny stock broker you choose will be different.
Online Penny Stock Brokers: $1,000+ Deposit
Here are a few brokers that might be good for you. Each of them requires a deposit of at least $1,000 (up to $2,500). If this is too much capital to deposit, keep reading for our sub-$1,000 stock brokers.
- Schwab – $1,000 minimum deposit with $8.95 trade commissions.
- TDAmeritrade – $2,000 minimum deposit with $9.95 trade commissions.
- Choice Trade – $2,000 minimum deposit with $5 trade commissions. Trade orders for more than 500,000 shares are assessed an extra fee of 1%.
- Fidelity – $2,500 minimum deposit with $7.95 trade commissions.
Online Penny Stock Brokers: Under $1,000 Deposit
Here are some more stock brokers that you might want to check out. Each of them has an initial deposit requirement from $0 – $500.
- ETrade – $500 minimum deposit with $7.99 – $9.99 trade commissions.
- SogoTrade – $500 minimum deposit with $3 trade commissions. Orders for stocks under $1 are assessed an extra fee of 1/2%.
- Scottrade – $500 minimum deposit with $7 trade commissions. Orders for stocks under $1 are assessed an extra fee of 1/2%.
- TradeKing – No minimum deposit with $4.95 or higher trade commissions. Orders for stocks under $1 are assessed an extra fee of one penny per stock. Also, if you wish to trade sub-penny stocks ($0.001 for example), TradeKing isn’t the broker for you.
- ShareBuilder – No minimum deposit with $9.95 or higher trade commissions. Orders for more than 1,000 shares of a stock are assessed an extra fee of $0.025.
- Zecco – No minimum deposit with $6.95 trade commissions.
While there are other choices out there, we felt these were the best group of online penny stock brokers.
