3 Top Penny Stock Brokers
Here we look at Penny Stock Brokers. We look at factors such as cost per trade, minimum account size, inactivity fees and much more.
They have no hidden charges either, you can even trade for the phone for no extra cost. Every time i’ve needed their customer service, I have always spoken to a polite, knowledgeable individual.
For anyone who likes shorting penny stocks, they have some of the best borrows.
TD Ameritrade have no inactivity fees, no account maintenance fees and no transfer fees.
They have a small account minimum of $1,000.
TD Ameritrade have over 500 local branches across the country for personal customer support.
Choosing a penny stock broker is very important, as it can have a profound affect on your trading results. We have put together some of the main factors I believe you should consider when choosing a penny stock broker:
Cost per Trade
This is the most obvious consideration when choosing a broker. Fees can range massively between different brokers. Deep discount brokers start at around $3.95 and more expensive brokers can be in excess of $50.
The cost per trade is more important for traders who make a large number of trades. If you only intend to buy a handful of stocks and hold them for several years, the cost per trade is unlikely to have a significant impact on your bottom line.
Nowadays, most traders place their trades online, but for those who don’t, you might want to take a look at how much a broker charges for “broker-assisted” trading. This is a fancy way of saying trading over the phone.
Some traders prefer a broker to have in depth training on how to invest their money. Personally, this is not something that interests me. There are many sources online that provide tutorials on stock trading, including this site! If the broker spends money on creating training material, this may be reflected in the price they charge.
Some brokers offer trading communities where you can share ideas with other traders. This can be helpful for helping improve your knowledge and understanding of stock trading.
However, this said, I would be very careful about taking trading advice from others. Online communities can be a great resource when used wisely, but always remember, many of the traders who contribute to these forums and communities are not making money yet, so taking specific trading advice from them may not be suitable.
Minimum Account Size
If you are a large trader, this is unlikely to ever be an issue. Thankfully many brokers have no minimum, but some of the bigger ones do, so it’s something to keep an eye on if you are a small trader. Out of the brokers mentioned here, Scottrade is the only one with a minimum of $500.
Last on the list but certainly not least. The platform is a very important consideration when choosing a broker. Some platforms are clearly aimed at the new trader whilst others are aimed at the more advanced trader.
It is essential that you fully understand how your brokers platform works before trading with real money. Many brokers, including the brokers mentioned here, let you trade a virtual account. This lets you get used to the trading platform with pretend money.
Take your time and have a play with the virtual account, so you are fully prepared when you begin trading with real money. You don’t want to miss out on a great training opportunity because you are still figuring out how to use the platform, or even worse, accidentally place a big trade you didn’t mean to!