Penny Stocks Brokers – How to Choose the Right One
Finding the right broker is one of the foundation items required for success. Whether you’re looking for penny stocks brokers or a broker for anything, the fundamentals remain the same. Let’s find a good stock broker.
What you want to do is create a list of a few stock brokers to research further. Here are some basic questions to answer before putting any penny stocks brokers on your list.
First, ask the question, “How long have they been in business?”—you need to see some history. Regardless of fees and features, a company that’s brand new has no value. For all you know, they will be gone tomorrow.
Next is reputation. Do they have one? What do you know about them (or think you know about them) without looking up anything?
How about fees? Ask yourself what price range you’ll be trading in. Will you be trading stocks $1 and higher mainly? If not, find out what the broker charges for sub-$1 stocks. For instance, Scottrade offers a flat trade fee of $7 (at the time of this writing). However, they charge differently when trades involve stocks under $1.
Continuing with the example, Scottrade would make my list if I was trading at the $1 level or above. However, if I was going to mainly trade below that level, I’d put them on a secondary list (penny stocks brokers to look at if I didn’t end up with enough to research).
Another information item to find out is whether or not the stock broker has a physical location or not. If they do:
- How many locations do they have?
- Are there any near you?
- Can you just show up there?
- Can you conduct business there (account deposits, etc)?
Once you find an online stock broker that satisfactorily answers these initial questions, put them on your list for further research. In another article on Penny Stocks Capitalist, I’ll go over researching penny stocks brokers in detail.
