Best platform to trade options penny stocks

Top 2 Penny Stock Brokers. As there are an increasing number of people interested in penny stocks, We thought we should put together a page talking about the best penny stock brokers. The list of suitable brokers used to be larger, but many brokers asked us to remove them from this page as they didn’t want penny stock clients. E-Trade are a popular broker. Whilst they are a great stock broker, they also offer many other instruments such as forex, futures, options etc. They have been around for over 30 years. Currently they charge as little as $4.95 per stock trade. There are also no extra fees for penny stocks. Currently they have a fantastic promotion where you can trade FREE for 90 days. Also, if you deposit more than $10,000 you get an additional bonus of up to $2,500 depending on the amount you deposit. Ally Invest (formerly Tradeking) have been around for more than 10 years now and are well known for being a low-cost broker.

They aren’t one of the bigger players, but they have been steadily growing. Trades are charged at a flat $4.95 each. There is no minimum account size to worry about either. Other useful features including a busy forum, a great trading platform and decent customer service. Tradestation have been around since 1982. They recently lowered their commission structure to make them one of the most competitive brokers around. They now charge just $5 per trade. One of Tradestations strongest points is their trading platform. It is certainly the most indepth platform I have ever used. It’s free too. They also have very comprehensive historical data that can be really helpful when planning and testing your strategies. Tradestation have also won major awards in recent years including the top award for “Best for Frequent Traders”.

What Are Penny Stocks? Penny stocks – also known as micro-cap stocks (stocks with a market capitalization of $300 million or less) – are stocks that trade for less than a $1, according to the definition used by most traders. The Securities and Exchange Commission defines a penny stock as one trading below $5, but most traders use the $1 standard because it is less inclusive. A penny stock is characterized by: What does all of that mean? For starters, penny stocks are cheap – very cheap. You can buy shares of a company for a penny. At that price, one thousand shares will cost only $10. Because of this, though, it can be hard to sell shares that you have because there aren’t as many traders interested in the stock as there are with other, more valuable stocks. Part of this is because of where these stocks are traded, as we’ll talk about below. So, while you may get a thousand shares, there’s no guarantee you’ll be able to sell them when you want. Plus, the price of penny stocks often fluctuates drastically. It’s not unusual to see wild upticks – and downticks – over the space of a trading day, just because these shares are so susceptible to trading (again, a product of low liquidity). So, while penny stocks offer great upside potential for profit, they are also risky and prone to speculation. Caution should be used when trading these stocks they’re not for beginners. Once you’ve made the decision to try your hand at these particular assets, where do you go? So How Do You Buy Penny Stocks Online?

You can actually find penny stocks on virtually all major exchanges, although rules vary on how long a micro-cap gets to stay listed on the exchange. The New York Stock Exchange, for example, delists a micro-cap stock if it trades below $1 for 30 consecutive trading sessions. NASDAQ has a policy of delisting companies with a minimum bid price of below $5 for 30 consecutive trading sessions, and delists companies after 90 calendar days. For any stock listed on a major exchange, you can use one of the penny stock brokerages above. Other places you can find penny stocks include: OTCBB : The OTC (Over-The-Counter) Bulletin Board is an electronic quoting system for buying and selling stocks outside of a formal exchange. This is a way to combine quotes from brokers and market makers operating over various electronic communication networks (ECN) in one location for investors to see. Penny stocks are commonly found here because they cannot meet the listing requirements for major exchanges. Pink Sheets : Similar to OTCBB, with even fewer filing requirements. This system is operated by a competitor to OTCBB, OTC Markets Group, Inc. You can access OTCBB simply by going to its website. There, you can put in a symbol to find quotes just like with a major exchange, or can look through their lasting listings. Pink Sheets can be accessed through its website, and contains three tiers: OTCQX: This tier contains companies that meet certain standards and are reviewed by OTC Markets Group. OTCQB: This tier is for companies that are registered with the SEC or another banking regulator and regularly file reports. No financial standards are required to be met.

OTC Pink: This is the least regulated tier of the three many companies have little to no public disclosure. Best Penny Stock Brokers for 2017 (Updated) Every week I get dozens of emails from people looking for a good penny stock broker that will allow them to day trade online. You simply can’t buy or sell shares in any public company on the Nasdaq or NYSE without a broker to complete the transaction. Luckily nowadays setting up an account is easier and more affordable than it was a decade ago. With advancements in technology, everything has moved online with no need to pick up the phone to execute trades. Despite it being less expensive, finding a suitable trading platform specifically for penny stocks is still a frustrating and challenging task that will leave you pulling your hair out. There are so many factors involved in selecting a broker that you are unaware of that will impact your performance in the long run. You don’t want to end up using a brokerage such as Robinhood for penny stocks . You’ll be at significant disadvantageous to others. Below I outline the most important elements to consider in your selection and I evaluate the top six brokers that are the best available options. Why You Should Paper Trade.

Access to the stock market is too easy nowadays the scary thing is anyone can set up an account and deposit money despite having little or no experience. The problem is beginner traders are too keen to start investing, movies such as the Wolf of Wall Street serve as a motivating factor to become the next Jordan Belfort. Every 18 year old wants to live the lifestyle portrayed in the film. Trading has nothing to do with wild parties and snorting cocaine off hookers. For new traders, I recommend paper trading for the first three months to gain a good understanding of the how the stock market works. Experiment with new trading strategies to discover what trading style suits you best. Although you’re using virtual money, paper trading will help you feel more comfortable executing trades. Also, it will help speed up your learning curve without risking your savings. I initially got hooked on the stock market through a paper trading competition my school held on MarketWatch. Out of 500 other students, I ended up finishing second. Unfortunately, there was no prize for second place!

While I didn’t win the competition, I did develop a solid understanding of financial markets in a controlled environment that was fun. It’s important to note, once you make the jump to live trading you’ll realize it’s not the same as simulated trading. Human emotions are difficult to control and penny stocks don’t generate strong volume. You might only receive partial fills on some of your orders. 3 Main Things to Watch out for. Surcharges – Depending on the broker, most will add a surcharge to shares under a dollar. TradeKing charges an extra one cent per share below $2, so if you buy 10,000 shares, it’ll cost you an additional $100. If you’re not careful, these small charges can add up and will cut into your potential profits. Your brokerage should charge a flat commission rate or offer excellent discounts on large orders. E. g. TD Ameritrade, Etrade and Charles Schwab all provide flat fees or substantial discounts with no sneaky hidden fee’s that catch you off guard. Trading Restrictions – You should be able to trades shares using an online platform and be cautious of any firms forcing you to place trades over the phone.

Some companies impose restrictions especially when it comes to issues such as short selling penny stocks. Volume Restrictions – Ideally you want the ability to trade an unlimited amount of shares without surcharges. Etrade is my overall top choice as they have a flat fee rate combined with an excellent trading software. $6.95 flat rate, drops to $4.95 if you execute more than 30 transactions in a quarter. $500 minimum for a cash account and $2,000 for a margin account. No surcharges on penny shares and discounts given on large orders. Great investment tools for research and executions are lighting fast. Better suited for active traders because of their tiered pricing structure. Non-active investors will be forced to pay extra commissions. Customer service is above average in comparison to others and 247 email and phone support are available. Current promotion – trade free for the first 60-days for accounts higher than $10,000. Video lessons available to teach the basics of the stock market The major downfall is not accepting people from certain countries. Tim Sykes preferred broker at the moment. Interactive Brokers is one the leading firms that cater to international investors.

Fixed commission rate, a fee of $0.005 per share depending on volume, $1 minimum. $10,000 account minimum is steep for retail traders. Charge fee’s to modify or cancel an order and monthly inactivity fee ranges from $3 to $20. Commissions are expensive unless you’re an active day trader. Have poor customer support but are the best option for shorting shares under $2. Have some of the best borrows for penny shares, although shares to short go fast. The trading platform can be challenging to learn at first and is not ideal for novice investors. Unlike Etrade, they accept oversea’s international traders. They don’t discriminate against particular countries which is a huge positive! Charles Schwab is one the most iconic and well-known brokers on Wall Street. Transparent fee structure makes them one of the best options to trade low-cost stocks. They recently dropped their commission rate from $8.95 to $4.95. Account minimum is a reasonable $1,000 and unlike some firms, they don’t charge any inactivity fees. Etrade’s trading platform is superior, but Charles Schwab does offer cheaper trades and is better suited for beginners. Unfortunately, Charles Schwab doesn’t provide paper trading accounts. Latest promotion – $100 bonus for time-customers. TD Ameritrade has been in business for over 40 years.

Took over Thinkorswim back in 2009, which was my previous preferred option. They have a robust trading platform and useful charting tools with tutorial videos to help get you started. Despite this in the past their platform has suffered from minor technical errors, frustrating customers who were looking to exit trades. TD Ameritrade offers good customer service, 247 support. Some of my emails got replied to within 30 minutes. No minimum account deposit (normally at least $1,000 is required) and n o surcharges on shares below $5 No monthly or inactivity fees, so they’re perfect for long-term investors. Great executions and has decent borrows if you want to short sell penny stocks. Free paper trading demo, helpful for beginners who wants to test strategies and get a feel for the market. The main complaint about TD Ameritrade’s is their fee’s. $9.99 is more expensive in comparison to the industry standard. TD Ameritrade claim charging more than competitors allows them to offer better customer support or maybe they’re greedy like everyone else on Wall Street. Suretrader is an offshore broker in the Bahamas.

Suretraders only competitive advantage is customers can bypass the PDT rule because of their location. The PDT rule is a SEC rule that does not allow people with accounts under $25,000 from executing more than 4 or 5-day trades in any 5-day business period. This is annoying, making it really difficult to grow your account but at the same time safeguards day traders from losing money. In 2017 they changed their commission structure, making them one of the most expensive options and disabled direct access routing. Charge $4.95trade for up to 10,000 shares with an ECN fee ranging from (0015-.0045) to .01 per share. Currently, offer 6-1 leverage and in the future plan to offer 20-1 leverage. (I highly recommend not using any leverage) Customer service is relatively poor because they have a small customer support team to service all their clients. A ccording to Linkedin they only have around eight employees. In recent times their CEO, Guy Gentille was indicated by the SEC for small cap manipulation. Suretrader had no involvement in the schemes, but it has affected their reputation. Hearing news like this would make me feel uneasy. So for that sole reason, I wouldn’t have more than $4,000 with them. Good borrows for hard to short stocks and have a list of 10,000 symbols to short sell. An alternative option for desperate traders in the UK outside the US with very little capital.

They should be the last choice for those unable to open accounts with more reputable companies such as Etrade. No longer recommended by Timothy Sykes. There is limited information about the company available on Google even though they started in 2000 they don’t even have a Wikipedia page. Better suited for OTC stocks, it only costs $7 per OTC trade. Have a volume surcharge of one percent for trades over 500,000 shares. No account minimum. Charge inactivity fee’s, $30 per quarter. The free web platform is basic and you need to pay $15 per month for their more advanced platform. Rarely offer promotion codes to new clients. Each brokerage will have different account minimums, commissions and trading restrictions. Account Size – The biggest obstacle is not having enough capital and people don’t realize there’s a pattern day trader rule that will restrict your activity to 4 trades in 5 business days. I suggest starting off with $2000 to make it worthwhile as commissions will impact your profits.

It’s crazy to think that TD Ameritrade & Robinhood have no minimum deposits to entice new customers. Where you live – People who live outside the United States will no doubt have a harder time finding a broker that is penny stock friendly because some companies don’t accept people from certain countries. Luckily Interactive Brokers allows customers from countries like the UK and Australia but will need at a minimum of $10,000. Quality of customer service – The bigger your account size, the better customer service you will receive. Brokers treat their big clients a lot better for obvious reasons and hate dealing with poor people. That’s why they discourage people from penny shares because they have received a bad reputation over the years and with good reason. 90% of these companies represent terrible investments and are just not something you would put in your 401k. Many of them are just shell companies that will later become pump and dumps. Trading Tools – For active traders, trading tools play a big part in their success. All the top brokers should provide live streaming quotes, free demo accounts, level 2 quotes, scanners, mobile apps and stock charting tools to perform technical analysis.

Charging extra fees for trading tools is the normal practice. Too many people especially teenagers are too eager to start day trading. They see photo’s on Instagram of Timothy Sykes advertising his lavish lifestyle, traveling abroad in exotic locations. People want to start making money straight away. Instead be patient, take things slow and paper trade for at least three months. Remember you have to learn before you earn! Once you’re ready I recommend starting with at least $2,000. Etrade, Charles Schwab and Interactive Brokers are the top three discount penny stock brokers. At the end of the day, your ultimatum decision will depend on your own individual circumstances. Best Penny Stock Trading Sites In 2017 (Complete Guide) The decision to invest in penny stocks has had a profound impact on my life. I was never somebody with cunning wit or extraordinary intelligence so no one ever expected me to reach a level of success where they would end up envying me. All this changed with the decision to invest just a small sum of money. I am not going to promise you that you can become a millionaire overnight and this is a shortcut for all your unfulfilled desires, but from experience I can say one thing: if done properly, this will be one of the best decisions you have ever made. ​ M ake sure to sign up for Timothy Sykes (Penny Stock trader extraordinaire) Newsletter.

Sign Up Here . Why Penny Stock Trading Online? The best thing about penny stock trading is that you can do it online. If your brain is vigilant enough, then you do not need to do any physical labour to earn money. After all it is just a matter of how wisely you invest your money. There are plenty of online websites with easy-to-use platforms that will help you in accomplishing your online trading dreams. The trick is to pick the right one, and you will be on the right track. Things you need to know. Before you start the hunt for the right penny stock websites, there are a few things that you need to know about yourself. Why you need to know these things? The answer is that when you are clear about the kind of investment that you are going to make, you will be in a better position to choose the investment options that suit your needs.

You need to ask yourself if you are leaping into this world for a one-time investment or you are looking forward to do it as a regular investment option. It is important to determine (or at least have an idea about) the frequency you will be looking to trade penny stocks online. Some websites will charge you money for being a member (even if you have been inactive) and others will reward you for more frequent trading. You should think about how often you will be trading when deciding the platform you will be using. 2. Risk You Are Willing To Take. You are hoping to reap the benefits of trading outside the stock market and earning profits from it, so be ready to pay the cost: not everything is rosy about penny stock trading. The truth is that it is a risky investment and you won’t ever be certain of the outcome. No amount of research will safeguard you against any surprises or setbacks. However, doing thorough research will help to minimize your risk. The more knowledge the better in this game! So, before you set out to invest in a company, have a think about the magnitude of risk that you can afford to take on your investment. These are penny stocks we are talking about so the value of single stock doesn’t show much before you start investing, it is wise to have an estimate about the number of stocks you can trade. The benefit of knowing the investment amount beforehand is that you will be in a better position to calculate the fees and extra amounts that you will paying on your investment.

These fees can creep up on you in online penny stock trading, especially with frequent trading. 4. When Are You Going To Sell. It is also an important consideration to think about when you will be looking to sell. Penny stocks are generally shorter term investments due to their volatile nature. If you are looking to make fast, short term trades you should know that it could be difficult to get rid of your holdings. Since you are dealing outside the stock exchange, and the scenario is volatile (to say the least), you might have trouble trading them for your desired price if you are not patient enough. Due to the low levels of liquidity of penny stocks, it can be hard to find a buyer when you are ready to sell. This may force you to lower your price to get out – andyou’re your profits. The Best Penny Stock Trading Sites. Now that you are all set to invest your money here, you must want to know where the big boys play so that you can join the league and become one of them in the future. To make life easier for you, I have compiled a list of the available options for penny stock sites so that you can pick the one that is best for you.

I hope you will find the list handy and it helps you make the right choice. Anyone who knows where to trade penny stocks must have heard about E-trade. It is one of the most renowned options in the online world for trading penny stocks. It has been reliable over the years and I have personally seen people do very well on this platform. Here is what makes it stand out from the crowd: · Flat trade pricing: E-Trade has adopted a flat trade pricing, so you do not have to worry about complex calculations as you invest more. You can calculate your costs with $9.99 per trade. Though this may look higher than competitors, in the long run what matters is that you know the costs involved and there are no hidden surprises. They have a pricing method that is tilted in the favour of regular members so if you trade frequently with them, you will experience price cuts and end up paying less. · Discounts available: If penny stock trading is what you are going to do then E-trade has discounts available. If you become a frequent trader on their website, they will offer you discounts according to their policy.

Volume discounts are also a lucrative catch for regular investors. · Maintaining a minimum: However, if you are going to be a member of their website, you need to maintain a minimum account balance of $500 and cannot go below this threshold. If you have an Individual Retirement Account (IRA) then the stipulation of minimum balance is waived off for such an account. · Free initial trade: When you start investing with E-trade, you get another incentive in the form of 2 months of commission-free trade once you have made a deposit of $10,000 or more. · Variety of options: E-trade also has a large variety of investment options to help make your investing decisions easier. Options Xpress is another good trading site for penny stocks and has a lot to offer for its members. Let me take you through their salient features: · Flat Commissions: Once again, the charm of this trading platform is that they charge flat commissions for trading over-the-counter stocks so you can calculate the fees charged in advance before making any investments. The commission charged for investment is $8.95 per trade. · Diversity of Options: When you are looking for ideas on where to buy penny stocks, you need a range of investment services. OptionsXpress offers complete options trading and facilitates complex options strategies, including penny options.

· No Threshold Balance: No current requirement for a minimum balance needed to keep an account. · Promotional Offers: If you make a deposit of $5,000 or more at Options Xpress, you get a promotional offer in the form of 50 commission-free trades. · Dual Trading Platforms: This is one of the penny stock trading sites that have two trading platforms for investors. These strong trading platforms are web-based and are easy to use for beginners. · Flat commissions: Once again the bonus here is that you are charged flat commissions on your investments and there are no hidden fees. TD Ameritrade charges $9.99 per trade. · No Minimum Balance Required: There is no requirement for a minimum balance needed to maintain your account. · Promotions: You will receive cash bonuses when you make deposits with TD Ameritrade, this cash bonus can be used for future investments. · Two Trading Platforms: Two trading platforms available to all customers one is a web-based based and the other one has advanced features. All platforms and tools are available free of charge.

· Flat Rate: A flat rate of $8.95 is charged for each trade. · Minimum Balance Requirement: You will need to have a minimum balance of $1,000 in your account. · Promotional incentive: If you make a deposit of $100,000 or above with this penny stock site, you will be gifted 500 commission-free trades. 5. Interactive Brokers. · Pricing structure: Their pricing structure is interesting: You can choose to pay 0.5% of trading value or you can decide to pay a fixed price between $0.005 and $0.0005 (this fixed price will depend on trading volume). So, you will have to do the maths based on the frequency you think you will be trading and the value of your trades. · Minimum balance: You will need to keep $10,000 as a minimum account balance with Interactive Brokers. · Access to shares: This broker is renowned for its support for almost every investment imaginable. Direct market access to stocks and futures gives them an edge. · Trading Platform: Their trading platform is designed with advanced technology and they have a good customer service.

· Low Commission Rate: If low commission per trade is what you are looking for in a trading site for penny stocks then you may wish to opt for Merrill Edge. The commission rate per trade is just $6.95. There are no extra surcharges on an over-the-counter stock trade. · Minimum Balance Requirement: You need to have a minimum balance of $25,000 if you wish to trade. · Cash Incentive: Merrill Edge offers cash bonuses for the deposits you make with this penny stock trading site. · Stock Definition: They define a penny stock as anything below $1 (as opposed to others who define a penny stock as anything below $5). · Flat commission: A commission rate of $7 per trade is charged. However, you will need to pay a 1% surcharge if your trade volume exceeds 500,000 shares. · Inactivity Fee: Although there is no account minimum requirement imposed, you need to maintain a minimum equity of $50,000 or you need to trade at least 5 times if you fail to do so, you will charged $30 every quarter. · Paid platform: While platforms offered by competitors mentioned above are free, Choice Trade membership will cost you $14.95 every month to use their trading platform. In addition, you may also end up paying for other costs for data and research. These are the top penny stock websites which offer very competitive services. As mentioned previously, you need to know how you want to approach trading before deciding where to trade penny stocks.

These are all top notch penny stock trading sites and arenas where the big boys play. Take your time, weigh up your options, discuss with someone who is knowledgeable in this field and then make your final decision about where to buy your penny stocks. I believe that E-Trade and OptionsXpress take the lead in terms of the best online trading site for penny stocks. Their charges are flat, their services are up-to-the-mark and promotional offers are tempting enough. E-Trade is a great option for both beginner investors and frequent traders. It is also very well known (largely due to the famous E-Trade baby commercial). OptionsXpress is great for futures and forex trading if this is something you would be interested in. In case you were curious, here is the infamous ETrade 'Baby' Superbowl advertisement: The next two options I would go for if the above two don’t resonate with you are TD Ameritrade and Charles SCHWAB. These platforms are quite good in terms of their promotional incentives and flat commission rates. TD Ameritrade and Charles SCHWAB are also great for beginner traders and for their research capabilities. Interactive Broker should be considered due to its alternative pricing structure which may be of benefit to you if its suits your planned trading method. However, its platform can be quite advanced and may not be the best option for beginners. If low commission fees is a big factor in your decision making process then you should consider both Merill Edge and Choice Trade as platforms to use. They have commission rates which are comparatively lower than the alternatives above.

Have a good think about your investment method. Once you have a solid idea of the approach you will be taking and your investment goals and objectives, you will be able to differentiate between the above options with ease. Finding the best site for trading penny stocks really does depend on your individual goals and requirements. Remember not to let a couple of losses deter you from what can be an extremely profitable venture. Start small, do your research and most importantly enjoy the process! If you need some coaching on how to get your investment method down pat, it might be useful for you to sign up for a mentorship with someone who really knows his stuff. Jason Bond is an expert in the field and has made himself a millionaire several times over through sound investment techniques. His program have been verified to bring about excellent performance. Learn more about his mentorship program here. No related posts.

Leave a Reply Cancel reply. COMPENSATION DISCLOSURE. Top 10 Explosive Penny Stocks to Invest In 2017 (Hot Picks) Methods For Building And Repairing Credit. 3 Best Small Business Credit Cards for 2017. Popular Categories. Tom Smallwood. Tom is a former accountant turned entrepreneur. He is not a financial adviser but does tend to give a lot of financial advice to his friends and colleagues. He currently runs a small online venture and blogs about his research and experiences. How to Invest in Penny Stocks.

NerdWallet offers financial tools and advice to help people understand their options and make the best possible decisions. The guidance we offer and info we provide are deeply researched, objective and independent. We spent over 300 hours reviewing the top online brokers before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers. Explore penny stocks. Read on to learn NerdWallet’s tips for trading penny stocks and choosing the right broker for this endeavor, or simply choose one of the options on the left to skip to a specific section. What is penny stock trading? Penny stocks — often called OTC or over-the-counter stocks — are a lot like they sound, though they don’t actually cost a penny. Generally defined as stocks that trade for less than $5 per share, penny stocks are traded outside the major stock exchanges. Instead, they’re quoted on the OTC Bulletin Board or through the OTC Markets Group — formerly known as Pink Sheets — a financial marketplace that lists 10,000 securities and allows investors to trade via online brokers. Five dollars a share seems like a steal when stacked against companies that trade for $500 or more.

This is where the backstory is important: These stocks are cheap for a reason. Because they are issued by small, yet-to-be-established companies, penny stocks can be volatile. They are often hard to research and accurately value, and they trade infrequently, which means they can be tough to sell. For more context on trading penny stocks, see our article on what a penny stock is. How to invest in penny stocks. Investing in a penny stock is essentially betting on a long shot. Penny stock investors dream that some company they pick will rise meteorically, and their inexpensive investment will pay off in an exponential return. The internet is full of “success stories” that fuel these hopes. Trouble is, true success stories are exceedingly rare for penny stock traders. Most of the companies in the pink sheets will disappear over time and take their investors’ dollars with them. Here are a few tips for maximizing your chances of finding those rare winners: Recognize you’re betting on a long shot and invest with care. Avoid companies with low trading volume to increase your chances of being able to sell later. Ignore the hypesters as they scarcely ever have your best interests at heart. Look for quality companies by examining underlying fundamentals. Stay diversified and never overweight yourself in any single company.

Dabble in this realm rather than diving in deep with a significant investment. Using these tips won’t guarantee success. But they can help you sidestep some of the more egregious mistakes in this realm. Choosing a penny stock broker. In case the above didn’t make this clear: NerdWallet does not recommend taking on the risks that come with trading penny stocks unless you are a sophisticated investor and you understand this market. But if you’re set on this method, you can at least go in with your eyes open. When selecting an online broker to trade penny stocks, you want to be aware of the following: Trade surcharges: Brokers often add a surcharge to stocks that are valued at less than a certain dollar amount, though that threshold will vary by broker. Some consider anything trading under $5 to be a penny stock, while others put the cutoff at $3 or $1. Because penny stock trades typically involve a large number of shares, it’s usually best to skip brokers with a surcharge and look instead for a broker that charges a flat commission. Volume restrictions: The best penny stock brokers allow trades of unlimited shares without additional fees, but a few charge more for large orders. Some brokers also limit the number of penny stock shares you can trade in one order or in one day, slowing your ability to trade and forcing you to pay another commission for a second order. Trading restrictions: Watch out for firms that require you to trade penny stocks by placing a phone order or that impose limits on the types of trades you can execute. Ideally, your penny stock broker will allow you to trade penny stocks with the same online platform used for other stock trades. Below are NerdWallet’s top brokerages for penny stock traders.

Each of the category winners below offers a uniquely strong suite of features for penny stock trading. Read on to see which suits your trading preferences best. Summary: Best Brokers for Penny Stock Trading. Best for low-cost. Best trading platform. Best overall value in trading penny stocks. These brokers combine flat trade prices with quality execution, research and data tools. Charles Schwab and E-Trade both offer a large penny stock selection, no penny stock surcharge and the ability to trade these stocks online. Schwab could easily win every category here. The company has high-quality trading platforms and charges a reasonable and flat $4.95 trade commission. E-Trade’s pricing is tiered to benefit frequent traders. The standard commission is $6.95, but that drops to $4.95 per trade for investors who place 30 or more trades per quarter.

Both companies have helpful customer service and a breadth of educational offerings. The lowest-cost penny stock brokers. These brokers will appeal to investors who prioritize low commissions. If commissions are your main concern, Merrill Edge and Interactive Brokers are good options — as is Charles Schwab, already mentioned above. Interactive Brokers caters to active traders, with a 0.5 cent per share commission, a $1 minimum per order and no additional charge for penny stocks. In addition to that, the broker caps commissions at 0.5% of trade value. Interactive Brokers does, however, have a $10,000 account minimum, monthly commission minimums of $10 and net worth and income minimum requirements by age. Merrill Edge has a $6.95 flat commission with no OTC surcharge. Clients may trade penny stocks only if they have an account value of at least $25,000, and the company says penny stock positions shouldn’t exceed 20% of that value. The best trading platforms for penny stocks.

These online brokers offer impressive trading platforms alongside flat commissions. Both of our top picks offer the tools and trading platforms you need to trade penny stocks, but if you’re searching for additional options, TD Ameritrade and TradeStation are both worth a look. TD Ameritrade’s $6.95 trade commission is higher than some brokers, but its thinkorswim platform is one of the best available, and its web-based platform Trade Architect is a streamlined option more suitable to beginner traders. TradeStation charges $4.99 to $8.99 per trade based on volume. The company earns just three stars in our overall review, mostly due a $99.95 per month inactivity fee, but trading 5,000 shares per month — an easy bar for penny stock traders — waives that charge. The broker’s desktop platform is complex but extensive, with automatic execution and advanced method tools. OTC data is $5 a month. Summary: Best brokers for penny stock trading. Charles Schwab. Interactive Brokers. TradeStation. If you’re still on the fence about penny stocks, learn more about some of your other investment options: Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet. com.

Twitter: @arioshea. Updated March 3, 2017. The Best Online Brokers for Stock Trading. Power Trader? See the Best Online Trading Platforms. Find the Best Online Brokers. New Investor? See the Best Brokers for Beginners. Disclaimer: NerdWallet has entered into referral and advertising arrangements with certain broker-dealers under which we receive compensation (in the form of flat fees per qualifying action) when you click on links to our partner broker-dealers andor submit an application or get approved for a brokerage account. At times, we may receive incentives (such as an increase in the flat fee) depending on how many users click on links to the broker-dealer and complete a qualifying action. The 6 Best Penny Stock Brokers For Hassle-Free Trading (Updated 2017) Penny stocks don’t cost a mere penny, but they are definitely cheaper than traditional stocks. Penny stocks, also called low-grade securities sell for less than $5 per share. These are investments in smaller companies, and investing on these pose high risk.

But should you hit jackpot, it can yield good money. In this article, we will review the best site for trading penny stocks. These stocks are not traded in the NASDAQ or NYSE, but are registered and sold in the secondary markets like Pink Slips, OTC-QB and QX. These markets allow stock sale even if the companies are not registered with Securities Exchange Commission (SEC) or file records of their stocks. There are lots of tools out there to learn about penny stocks. We highly recommend signing up for Timothy Sykes Newsletter list. Before you start buying penny stocks, or any stocks for that matter, you have to do your homework and look into the company’s background. Read their SEC registrations (if any), financial statements and history. However, as penny stocks are not required to have these, you can Google the company and find any data available. If the company has a website, read the information, but third party sources are more likely to be truthful and accurate than data milled out by their PR team. Also, the SEC periodically issue warnings regarding penny stock companies, and you can check out their website for a listing. OTC Markets give ratings to penny companies on information available: QX is the highest rating, and you might as well avoid those with ‘No Information’, ‘Grey Market’ and ‘Caveat Emptor’. To start online trading, you need to register with a platform, which may charge commission for your transactions. You can use this comparison to help you decide which platform is best for you and to determine the best site for trading penny stocks. This is one of the best penny stock websites it is favored by many newbies.

They have free demo trading where you can ‘play’ penny stock trading and test out your strategies without losing real money. They also have mobile trading which is important in the mobile world we are living in. Some key points to consider for OptionsHouse. Been around since 2005 Startup of $5,000 Offers newbie gimmicks like free 100 online trades for 60 days Awarded as Barron’s top overall online broker Its mobile app has also been given 5 stars by Barron Provides real-time market data and research tools Speedy executions of trades No maintenance costs No minimum balance Flat rate of $4.95 for flat-rate stocks Base rate is 3.25% If you want to play with very low-priced stocks, this could just be the best stock trading site for penny stocks. However, it does require a bigger amount to open an account. 39 years in the industry $10,000 minimum account Pricing structure which benefits trading low-priced stocks You can trade for a very low minimum of $1 Opening an account can be customized whether you are a small business, an individual or even a money manager Worldwide trade in 24 countries, in 100 market centers You can fund your account using different currencies Six-time awardee of the Barron’s ‘Top Online Broker’ award. eTrade is certainly one of the best sites to trade penny stocks. This platform is especially beneficial if you are technologically-challenged. They have step-by-step instructions to guide you and a live chat to walk you through the process. Notorious for the commercial featuring the ‘E*Trade Baby’ Initial funding of just $500 They provide a guided questionnaire so you can determine how much risk you are willing to take and how much of your portfolio you are willing to allocate Costs and fees are higher than others Annual advisory fee at 0.30% To maintain free access, you have to make at least 30 trades in a month. Otherwise, the monthly subscription fee is a hefty $99.95 The E*TRADE 360 view enables you to customize what you view – summary of accounts, watchlists and trading transactions. You can delete that which you don’t want, and add others E*TRADE Mobile features a barcode reader so you can scan a barcode of an item in the grocery and see if it is manufactured by a public company No virtual trading options Offers commission-free ETF’s. If you are participating in the Rio Olympics, they are the official online brokerage sponsor. They should certainly be on your radar in your pursuit of the best penny stock trading site.

They have different offers to entice you to open an account with them, and the best offers for long-term investments. Their strength is on their research services where you can get quotes, analysis and background information on the penny stock company you are interested in. Offers 60 days trading free of commission for a minimum deposit of $3,000 If you are putting in a bigger amount, you get the 60 days commission-free trading plus cash (from $ 100 - $ 600 depending on amount deposited) Awarded by Barron’s for its research amenities They have an independent third-party research team for free quotes and analysis 40 years in the industry Trading fees are straightforward at $ 9.99 per trade, regardless of how much money you have in your balance or how often you trade No requirements on share or market or limit order Expensive broker-assisted trades Offers commission-free ETF’s. They are more known for their personalized customer service, and are probably the best site for trading penny stocks in terms of customer service. Their strength is their 500 or more local branch offices that follow up on any online applications made. Their prices and commissions are simple and straightforward and less expensive than most But for stocks less than $1 per share, the cost is a bit steep at $7 plus .5% of the trade value They offer a wide selection of 14,000 mutual funds so you can make your own portfolio mix to suit you Their in-house options, however, are more limited than others Enticing offer of $2,000 cash bonus and 50 free trades No commission-free ETF’s Complaints are easily handled as they are referred to the nearest local office. Aside from the phone, they also offer chat services to assist clients Research services are not as wide and expansive as its competitors However, their Scottrade SmartText analysis is available for sectors, industries, earnings and related charts. It points out crucial indicators for the company you are researching. This site was the number 1 broker in 2016. They excel in their investment guidance through top of the line research and customer service. Full-service brokerage Rates and fees are almost similar with close competitors, being simple and using a flat-fee commission structure Won multiple awards through various prestigious bodies, with awards mostly centered on Best Service. Their assortment of products, like Four Fidelity funds, are also multi-award winning Has the lowest margin rates for bigger-range assets, between $ 500,000 to $ 999,999, and for assets over $ 1 million Has limited offers on commission-free ETF’s, not as many as its competitors Their research service gives in-depth analysis and from a wide range of sources Efficient mobile screener with filter options making it easy to screen for stocks Easy-to-use, complete and comprehensive website Mobile trading app that is efficient and bug-free Very transparent and efficient in order execution, one of the best in the industry. Before jumping into the trading game, take some time to choose the best site to trade penny stocks. Find the right platform for you, do your research and start small.

The penny stock trading game can be risky. So remember, proper research can and will help you minimize the risk of frequent losses. People often forget that when you buy shares in a stock you are buying a piece of an actual business. Hopefully this article has helped you pick the best penny stock website for your needs. Once you've got your trading platform, you can start trading. But how do you know which stocks to buy and when? Jason Bond offers a service that sends you the latest tips on the best stocks to invest in. He's a master at this and his tips yield verified results. Try it out and see for yourself! No related posts. Leave a Reply Cancel reply.

COMPENSATION DISCLOSURE. Top 10 Explosive Penny Stocks to Invest In 2017 (Hot Picks) Methods For Building And Repairing Credit. 3 Best Small Business Credit Cards for 2017. Popular Categories. Tom Smallwood. Tom is a former accountant turned entrepreneur. He is not a financial adviser but does tend to give a lot of financial advice to his friends and colleagues. He currently runs a small online venture and blogs about his research and experiences. Best Brokers For Penny Stock Trading of 2017. For most investors, a simple buy-and-hold portfolio of index funds is the way to go. The majority of my own portfolio, which I’ve been managing for nearly 10 years now, is in stable and diversified investments like these. But I’m also a bit of an adrenaline junkie and geek-out on investment research, so I enjoy trading in the high stakes world of small and low-priced companies (a. k.a “penny stocks”) with a limited amount of cash, too. The easiest way to lose out on penny stock profits — aside from making bad trades — is paying unnecessarily high broker fees. The best brokers for penny stock trading don’t tack on any additional fees for trading a high volume of low-cost stocks. Charles Schwab offers the most reasonable penny stock rates of any broker.

It’s also a great platform to expand your portfolio outside of penny stocks, too. Its online educational resources are second to none, and it offers 200 commission-free ETFs to help you further grow your portfolio. E*Trade’s pricing structure becomes less expensive than even Charles Schwab after 313 trades per quarter, however. If you’re an active trader and regularly hit those numbers, that will be your best option. The Simple Dollar’s Top Picks for the Best Penny Stock Brokers. I looked at all the hidden fees or surcharges that many brokers like to tack on to penny stock trades, and found the ones that had the absolute lowest rates available. Not all “penny stocks” trade for a penny a share. Some trade for a little less than a dollar and some even trade for less than a penny at a fractional value per share. But regardless of specific price, any true penny stock is going to be an ultra low-priced investment on a per share basis. You need to keep your cost per share as low as possible to trade penny stocks effectively. Let’s say you only have $500 to invest in penny stocks. In theory, you can buy 50,000 shares of a stock priced at 1 cent per share. But in practice, there are going to be costs to any transaction.

Let’s say your broker charges $10 to place a buy order and then another $10 to place a sell order. Minus those fees, you actually only have $480 to invest. And what if there are additional $30 costs specific to low-priced stocks because your broker isn’t very welcoming to aggressive penny stock investors? Now your $500 has turned into $450. In the grand scheme of things, $50 may not sound like a deal breaker. But that’s actually 10% of your initial $500 investment. And worse, that 10% is only lost on the front end. It can add up big-time in lost profits. Consider the following math based on a $500 initial investment: As you can see, it’s not just the lost money thanks to fees that matter, but the lost investment profits, since you can’t put that cash to work in the stock market after your broker takes a cut. What Makes a Good Penny Stock Broker? There’s always risk to trading stocks, and a lot of the big factors that can result in a big move for the market or an individual company are not within your control. The one thing you can control to some extent is broker fees. That’s why I read through the fine print of the 10 most popular discount stock brokers.

Including my top pick platforms, Charles Schwab and E*Trade, I explored: Here’s what I looked for, specifically: No Surcharges for Low-Priced Stocks: Many discount brokers tout their “standard” transaction fees in marketing, but neglect to tell you there can be an added cost to low-priced securities. Some brokers charge a percentage on the total trade value and others charge a fee per share. Either way, you’re getting charged way more than you would for a regular blue chip stock like Apple Inc. or Wal-Mart Stores Inc. at standard rates. Reasonable Volume Restrictions : If you find a stock you like trading for 1 cent and want to invest $1,000, you’ll be purchasing 100,000 shares. That means any broker that either charges you for large trades or insists you break them up into multiple orders is not conducive to penny stock investing. I insisted platforms allow block orders of more than 1 million shares to be subject to additional fees – meaning you can invest $9,999.99 in that 1-cent investment via a single transaction and not get dinged. That’s plenty for most investors. No Costly Add-Ons : Penny stock investing is inherently aggressive, so some brokers demand you upgrade to a premium trading account with higher minimum balances or additional platform fees. Others require you to place orders via telephone to a human broker, which typically can add $25 or more in service charges. If you want to trade penny stocks, you should be able to do so without additional costs and headaches like these. Low Minimum Account Balance : Typically, penny stock investors are seeking out these low-priced securities because they don’t have a ton of ready capital they’re willing to risk on them. That means it’s necessary for a good penny stock broker to have a low initial account minimum.

But thanks to the very volatile nature of these aggressive investments, it’s not uncommon for penny stock traders to see their initial nest egg shrink in a hurry — so it’s important those low minimum requirements persist beyond sign-up, just in case a trade goes wrong (because at least one or two probably will). I don’t think anyone with less than $1,000 should be investing in individual stocks of any kind, frankly, so I used that as a reasonable minimum threshold. The Best Penny Stock Brokers. Cost Structure. Trading fees: $8.95 flat rate Balance Requirements: $1,000 minimum to open, but no ongoing balance requirements after sign-up Volume Restrictions: Up to 1 million shares per transaction without additional cost. Charles Schwab’s commitment to a transparent fee structure works strongly in favor of those who want to invest in low-cost securities. There are no hidden fees per share, and no pesky maintenance fees to endure. This is a bit of a rarity when it comes to penny stocks. Many brokers charge you extra to invest in low-priced stocks, or to place large block orders. Take OptionsHouse, which I named as one of the best options brokers because of its super-low fees.

In the fine print, however, OptionsHouse says it will charge you $0.0005 per share on penny stocks – which means if you’re investing $500 in a 1 cent stock, you’ll be buying 50,000 shares and incurring $25 in fees per transaction. With Charles Schwab you can confidently trade penny stocks knowing you’ll only be charged $8.95 to buy and $8.95 to sell – with none of the additional fees so-called discount brokers place on high-volume penny stock trades. You just need at least $1,000 to start investing however, you should really have that much to get started trading successfully through any broker. A Trusted Resource for Beginners. Since Charles Schwab is one of the oldest and most respected brokers out there, your investing adventures don’t have to be limited to penny stocks either. After changes to investing regulations in 1975 allowed brokers to be more flexible with fees, Schwab offered much lower fees than its peers and helped to create the discount broker marketplace that exists today by putting its customers first. If you’re a beginner, Charles Schwab will have everything you need to expand your portfolio. That populist approach to investing is very much in the DNA of Charles Schwab today. Want to learn about, say, exchange traded funds? Then check out the tons of articles, videos, and on-demand courses in the Learning Center. There also may be a seminar available at a brick-and-mortar Charles Schwab branch near you, which you can attend free of charge as an account holder. That kind of personal attention simply isn’t there from other online-only platforms. Also, when you’re ready to place your first ETF trade, Schwab ETF OneSource offers 200 commission-free ETFs to allow you to dabble in these funds in a cost-effective way, even as you trade penny stocks.

This is just one example of how having a big broker like Schwab on your side can open doors to new trading strategies as you learn and grow as an investor. Best for Active Traders. Trading fees: $6.95 flat rate, $4.95 for 30+ trades each quarter. Balance Requirements: $500 minimum to open, no ongoing balance requirements after sign-up Volume Restrictions: Up to 1 million shares per transaction without additional cost. For beginner and veteran investors alike, transparency matters. And like Schwab, E*Trade offers a straightforward pricing model for penny stocks — it’s just not as cost-effective until you reach a relatively high number of quarterly trades. After 30 transactions each quarter, you’ll only be charged $4.95 per trade instead of $6.95. Those discounts are tremendous when you consider the competition’s pricing for active traders. Let’s say you execute 500 transactions in the quarter for about 50,000 shares each. That adds up to about a $500 transaction around a stock trading for 1 cent, so we’re talking a lot of modest trades and not six-figure investments. Here’s how the math would differ on E*Trade vs. a typical fee structure like that of OptionsHouse, which tacks on a per-share charge. E*Trade Commission Structure. OptionsHouse Commission Structure. As you can see, the flat rate is nominally lower with OptionsHouse, but since the stock costs just a penny, you’re trading a high volume of shares and can really rack up its extra fees if there’s a per-share expense above your standard commission. One thing to note: E*Trade acquired OptionsHouse in late 2016, but according to this released statement there will be no changes to OptionsHouse pricing or trading platforms.

Make Sure You Do the Math. The potential for a volume discount coupled with a lack of additional penny stock fees is too powerful to ignore. Sure, the $6.95 flat rate seems pricey when compared with most standard rates. And obviously, if you’re only making a handful of trades, Schwab is a better fit. The absolute break-even between Schwab and E*Trade is 313 trades per quarter, but the savings get more pronounced the more you trade, as the chart below shows. The most important thing for active traders, then, is to review their transaction history for a three month period and see if they perform more than 300 trades or so. If the answer is yes, then E*Trade is going to be the best penny stock broker for you, strictly based on the volume discounts. Fees Are Important, But So Is Research. If all this talk about fees and figures has your eyes glazing over, then I have bad news for you – penny stock investing is particularly hazardous to people who don’t like numbers. That’s because your success in trading them relies solely on your own ability to research them. The vast majority of penny stocks operate under the radar of professional Wall Street analysts, which makes them incredibly hard to predict.

Consider that Apple Inc. has about 40 investment firms poring over its press releases and its public filings with the Securities and Exchange Commission. That’s not to mention the countless armchair investors sharing their opinions on blogs or social media about the company’s financials, too. And despite all this, there are still investors who have lost money on the stock by failing to anticipate the right time to buy and the right time to sell. Penny stocks have almost no media and analyst coverage. That makes them incredibly risky and uncertain. What’s worse, it is crucial to note that this lack of coverage doesn’t just lead to bad investments, but can also lead to outright fraud. Take the case of Daniel Ruettiger, the walk-on Notre Dame football player immortalized in the movie, “Rudy.” Ruettiger used his modest fame to start a penny stock sports drink company, and then fraudulently inflated its value to rake in $11 million in ill-gotten profits. More recently, in March of 2016 the SEC fined a stock market “expert” after the guy took $330,000 in compensation from a struggling penny stock in exchange for constant touting of the firm on blogs, social media, and other outlets.

These kind of “pump and dump” schemes are common among penny stocks, since the investments aren’t widely covered and it’s easy for a false rumor to take hold. Remember these examples the next time you get a hot tip and think of just diving in without doing your own research. At a minimum, you should always search the SEC Edgar database for filings from a potential investment. By law, any stock – even penny stocks – has to report its gross sales, net profit, and potential risks to investors. I’d also highly recommend doing a few hours of simple Google research around the company and reading what blogs, press releases, and other investors are saying. You don’t have to agree, and it’s important to take all commentary with a grain of salt, but it’s important to at least know what’s out there. Whatever your method, don’t let the allure of big profits fool you into just investing on a whim. Otherwise, you could find yourself on the wrong side of one of these scams, with fraudsters making millions, and you losing all of your money. Penny stock investing is all about finding the best stocks at the lowest price, so you can’t afford to incur big-time fees and commissions. Charles Schwab offers the lowest standard rates on penny stock trading, and has a transparent pricing structure that makes it the best option for just about everyone. The only way to get even lower fees would be to use E*Trade and take advantage of its volume discounts. Leave a Reply Cancel reply.

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