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Choosing the Best Penny Stock Broker

Who is the best Penny Stock Broker?

 

Choosing the Best Penny Stock Broker

When it comes time to selecting a penny stock broker, investors must keep in mind that there are many factors to research and consider. In order to maintain long term success trading penny stocks, your broker will play a vital role in identifying and recognizing the intangibles that separates mediocre from outstanding. But how can you determine who is the best broker for you? Read below as I breakdown the top online brokers.

TD Ameritrade: This is one broker we ask that all Penny Stock Traders avoid at all costs. Although it is a very popular brokerage firm, it is not OTC friendly therefore making it hard for traders to buy and sell shares for many OTC stocks.

E*Trade: This company has a great reputation for its discount online stock brokerages. E*Trade offers tons of tools and free information which is perfect for independent research. There sources include the likes of S&P, Thomson Reuters and Research Team. There investing tools are well designed and easy to use.

Another attractive feature of E*Trade is the fact that the minimum requirement for a cash account is $500 dollars. All stock and options trades fall into the $7.99-$9.99 per trade while option contract commissions are labeled at $0.75 per contract. No mark-ups on 30,000 bonds and fixed income securities with a charge of $1 on bonds is par for the course. With its low commission fee E*Trade is very penny stock friendly. It is no wonder why their client base is so high.

Scottrade: This is one of the least expensive of the big name online brokers. They charges $7 for both market and limit orders with no annual fees. This is a plus as some brokers charge fees for inactive traders.

There is a catch with Scottrade and it can really affect penny stock investors in the long run. They charge and additional of 0.5% of the total principal of your trade. So for example if you make a trade of $1000 dollars, you would owe $1012 ($100+$7+$5). May not seem like a lot now but after you subscribe to our FREE newsletter and become a stock whiz you may want to start to trade more aggressively.

Interactive Brokers: Of all the major online brokers IB’s might be the most in depth but I will break it down for you.

Commission Charges

  • $1 to trade 100 or less shares.
  • Trades between $100 and $4999 are subject to a commission of $0.005 per share.
  • Trades $5000 and up have a commission of $25.
  • For Penny Stock there is a charge of 0.2% of the total price of the trade. Example if you buy 10,000 shares of a 50 cent stock your commission charge would be $10.

Minimum account balance is $2000 and there are $10 monthly inactivity fees which are waived if you spend enough commissions and research.

Choicetrade: There is no minimum balance required to start an account with Choicetrade. There is also no charge for inactivity and quarterly fees. Choice trade is definitely a broker that you want take a closer look at. Below is a break down.

Commision: All you need to know here is $5 That’s Right, $5 happens to cover it all at Choicetrade from market order to limit orders as well as Bulletin Boards to Pink Sheets.

Some Choicetrade #’s to crunch:

Stocks and ETFs (direct access): $0.005 per share, $1 minimum per trade. Stocks and ETFs (not direct access): $5 per trade. Minimum to open account: $0 for cash account, 2,000 for margin account. For after hours trading Choicetrade has a steep $0.005 per share surcharge. Choicetrade comes with very powerful trading tools giving investors the best of both worlds.

Zecco Online Broker: Zecco is one of the only discount online brokers that offers Foreign Exchange (Forex Trading) There is no account minimum, no inactivity fees and free dividend reinvestment.

Zecco also offers 10 Free trades a month for customers with over $25,000 or process over 25 trades per month. All other trades are just $4.50!!! and another added bonus for penny stock traders is that there is no additional commission for large orders unlike other online discount brokers. Zecco is definitely a top choice for those with limited funds and looking for low commission rates.

After doing extensive research and due diligence for quite a bit of time on this matter,  I have come to the conclusion that penny stock brokers and brokerage fees are changing quite frequently due to their competitive nature trying to stay on top as well as in demand. Brokers are battling with one another to for your business and the good thing is that you as the investor benefit from all this with low commission rates and state of the art trading tools at your disposal.  Choosing the right broker can save you thousands of dollars a year in profits. Being selective can be the difference between having a great year and hardly breaking even. In fact, having the right broker is the single most important decision you can make other than choosing what stocks you invest in.

If you are new to microcap trading, you should strongly consider a full-service broker to begin with. They can assist you in learning the ropes and developing good habits for trading microcap stocks. The top online brokers are not only are the ones who can give you the best service, but the ones who guides and promote good habits in the long run. Services such as Fidelity and Charles Schwab offer first-rate full-service online.

And remember for the most up to date hot penny stock alerts subcribe to our always FREE newsletter. We have your top penny stock locks right here!!!

*Please not that this article is for informational purpose only. I am in no way endorsing any particular online broker.

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