The Best Online Brokers for Penny Stocks

July 22, 2010, 6:59 AM

You may need to hire a broker to perform buying, selling and other transactions for you on your shares on penny stocks.

The most important thing in penny stock marketing is to make sure that you have a sufficient amount of money in your account to meet both the broker’s commission and the share cost. Many well-known online brokers are available at the rate of $0.001 per share, so don’t ever go with the high end brokers as they would eat much of your profits and turn over. Here we will discuss about some of the best online penny stock brokers.

Ameritrade
Ameritrade is my favorite and has been around since the beginning of online trading. Their platform is very user friendly for the novice trader and has plenty of tools for the more advanced trader. Ameritade also integrates into many other 3rd party software for faster trading.

E Trade
E Trade would charge you around $12.99 for both limit and market orders. This includes all the penny stock trading and all OTCBB stocks for $1 or less. You must have at least $1000 in your account to register with E Trade and you may need to pay a 40% quarterly fee for getting their special services. E Trade is best for active traders who do not need much hand holding and who seek cheap online brokers. You can contact E Trade through the phone at 1-800-387-2331. Their website address is www.etrade.com.

Fidelity
Fidelity would charge you around $19.95 for both limit and market orders which include all the penny stocks. You need a balance of $2500 in your account to register with them. There is no quarterly or annual fee for them. They offer some research capabilities which targets good investors with the high net worth who seek the whistles and bells of full time services of the brokers. Contact Fidelity at 1-800-619-7283 and at www.Fidelity.com.

Scottrade
Scottrade is one of the most affordable online brokers for penny stocks. They charge you just $7 for the limit and market orders and there is no annual or quarterly fee. Even if you are an inactive investor, you will not be penalized for non consideration. The main drawback of the Scorttrade is that they charge a $7 flat commission and an additional fee of 0.5% for the total principle of the penny stock. Hence, if you spend $100, an additional commission of $0.50 is added to the $7 commission. This make your total commission of penny stock come to $7.50. You can contact them at 1-800-619-7283 and at www.scottrade.com.

Charles Schwab
Charles Schwab is on the top position in the discount brokers’ world, but they are not the cheapest. They charge you around $19.95 and an additional $0.015 for all penny stock shares, which is applicable for both limit and market orders. You can contact Charles Schwab at 1-866-855-6770 and at www.schwab.com.

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Tags: online broker review, online stock brokers