6 of the Best Penny Stock Brokers
As I trade penny stocks myself I know how time consuming the task of finding a broker can be. I have looked at many penny stock brokers that I thought would be suitable only to find later they have additional fees for trading penny stocks. Not only do some deep discount brokers charge additional fees for trading penny stocks, many of them have a difficult to understand commission structure. I know it took me a while to get my head around some of them. Many Stockbrokers don't want the custom of penny stock traders as they often make considerably less money on these clients. |
However, fortunately after all my searching and talking with many different brokers i've come across two good choices.
As you will see below, both Zecco and TDAmeritrade have flat rate commissions on penny stocks, with no extra hidden charges.
Personally, I use Zecco, mainly because the flat rate commissions are half that of TDAmeritrade and they have no account minimum, whereas TD have a $2,000 minimum.
However, I have used TDAmeritrade in the past, and was extremely impressed with their software and customer service. They also offer their Apex service. This is like a reward scheme for active traders entitling them to a whole host of benefits including preferential customer support, free access to level II quotes, streaming news, special offers on hotels, airlines, electrical goods and much more.
Ok, here's what I have found out about the costs of trading penny stocks with various different brokers:
| Broker | Cost Per Trade | Min Account Size | Inactivity Fees | Fees for Penny Stocks | Broker Assisted Trades |
| ChoiceTrade | $5 | none | None | None | $5 |
| TDAmeritrade | $9.95 | $2,000 | None | None | $44.99 |
| OptionsHouse | $2.95 | none | None | $0.01 per share if priced under $2* | $2.95 |
| Low Trades | $4.95 | none | $50/6 monthly | Big Order Charge - 100K+ shares, 1%* | $25 |
| Optionsxpress | $14.95 | None | None | $14.95 or 5% of total order, whichever is highest | $14.95 |
| TradeKing | $4.95 | none | none | $0.01 per share if priced less than $1*** | $4.95 |
** LowTrades charge a flat rate of $4.95 per trade, plus $0.01 per trade, Only if more than 100,000 shares are purchased. So this broker might be an option.
*** TradeKing charge a flat $4.95 per trade if the stock is priced more than $1. If the stock is priced less than a dollar then there's an additional charge of $0.01 per share.
Choicetrade is my first choice for trading penny stocks. As a Penny Stock Broker they really tick all of the right boxes. They have the lowest flat rate commissions for penny stocks. They have no inactivity fees, no minimum account size and no extra charge for broker assisted trades.
They have been 4-star rated by Barrons, 5 years running.
Click here to join Choicetrade
TDAmeritrade is a long established broker with a very good track record. They are an excellent choice for penny stocks as there are no hidden fees. They charge $9.95 per stock trade regardless of the price of the stock and the number of stocks purchased. They also have no inactivity fees.
More Information:
TDAmeritrade Price Comparison Chart
Click here to join TDAmeritrade
Optionshouse has been around a while now and in my opinion are a very good choice for trading normal stocks. The commissions are one of the lowest I have ever seen. They also have no inactivity fees and no minimum account size. This online broker is also an excellent choice for a trader who trades on margin frequently as they have the lowest margin rates around.
However, there are additional fees for all stocks priced under $2. The charge is $0.01 per share. This charge can quickly mount up.
Click here to join OptionsHouse
Lowtrades is an established broker. Standard commissions are low at $4.95 per trade. They have no minimum account size, but do have expensive inactivity fees. These are charged twice a year and cost $50 each time. If a trade is placed within the six month period, no charge is made.
Whilst the standard commissions are low, there is an additional charge for each trade containing more than 100,000 shares. This charge is an additional 1% of the total amount of the trade. This broker may be suitable for your penny stock trading, if you feel you won't exceed 100,000 shares per trade.
Optionsxpress is a well established broker offering trading in stocks, futures, options and forex. They have no minimum account size or inactivity fees.
Normally they charge $9.95 per trade. However, I spoke to them over the phone regarding penny stocks. I was told they charge $14.95 per trade or 5% of the total trade amount, whichever is highest.
It would appear that optionsxpress do not really want custom from penny stock traders. They are a good broker for other types of trading though.
Click here to join OptionsXpressI like TradeKing a lot but they are probably not the best choice for penny stocks. They have an additional commission of $0.01 per share on all stocks priced under $1.
In conclusion, if you are looking for a discount penny stock broker, be sure to know all the charges before trading.
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