4 of the Best Penny Stock Brokers

Note: Looking for a penny stock broker can be a complete and utter minefield. I used to have many brokers that i'd recommend to my visitors, but unfortunately, they all asked me to remove them from the list. It seems most of the big brokers do not want the business of penny stock traders.

It is with deep regret that I have had no option to suspend this page for the time being until I can find a suitable broker to recommend to you all. I'm very sorry about that.

However, Please check back in the future and hopefully I will have some new brokers who will be happy to service penny stock traders. Please feel free to visit the rest of the site.

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 business 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.

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	Broker Assisted Trades	Fees for Penny Stocks
Optionsxpress	$14.95	none	none	$14.99	$14.95 or 5% of total order, whichever is highest

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 OptionsXpress

Conclusion

Choosing a 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. 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.

Training
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.

Trading Community
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.

Platform
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!