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Best Brokers for Penny Stocks

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Penny stock trading is attractive to many investors. It has the hope and sometimes the potential to show huge returns, and quickly. There have been a number of success stories that keep the interest alive.

Penny stocks tend to be volatile, and if you are on the right side of that movement, you can see some success in trading them.

Best Penny Stock Brokers:

My first experience trading in Penny stocks was way back in 2011. Fresh out of college, I had all of the necessary confidence to invest in the (penny) stock market. Growing up in the 90s, and sheer curiosity led me to see the current state of Blockbuster Video.

Best Penny Stock Brokers – Summary

Commissions
$0
Account Minimum
$0
Get started securely through Webull’s website
Commissions
$0
Account Minimum
$0
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • Commission-free trading in over 5,000 different stocks and ETFs
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Leverage of 4:1 on margin trades made the same day and leverage of 2:1 on trades held overnight
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in options, mutual funds, bonds or OTC stocks
Commissions
$0
Account Minimum
$0
Get started securely through TradeStation’s website
Commissions
$0
Account Minimum
$0
1 Minute Review

TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.

Best For
  • Advanced traders
  • Options and futures traders
  • Active stock traders
Pros
  • Comprehensive trading platform and professional-grade tools
  • Wide range of tradable securities
  • Fully-operational mobile app
Cons
  • Confusing pricing structure to leave new traders with a weak understanding of what they pay
  • Cluttered layout to make navigating TradeStation’s platform more difficult than it should be
Commissions
$0 $6.95 for OTC Stocks
Account Minimum
$0
Get started securely through TD Ameritrade’s website
Commissions
$0 $6.95 for OTC Stocks
Account Minimum
$0
1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Best For
  • Novice investors
  • Retirement savers
  • Day traders
Pros
  • World-class trading platforms
  • Detailed research reports and Education Center
  • Assets ranging from stocks and ETFs to derivatives like futures and options
Cons
  • Thinkorswim can be overwhelming to inexperienced traders
  • Derivatives trading more costly than some competitors
  • Expensive margin rates

As the internet does, it led me on a strange path through message boards, penny stock chat rooms, and general investment sites. Somewhere along the line, I caught wind that DISH was in the process of launching a competing service to Netflix through Blockbuster.

Interesting, I thought – especially because Blockbuster was trading for pennies at the time. Long story short, I bought in for $3,000 at around 3 cents a share in late June 2011, giving me roughly 100,000 shares of my childhood memory. Leading up to the day DISH made their announcement the stock rose to roughly 35 cents a share. For a moment there, I thought I was going to be rich. Unfortunately, the SEC suspended trading temporarily of the stock, and then Blockbuster told investors that the stock had no actual value. This is the Nature of Penny Stocks.

I could have sold, and made a nice profit, but I held on too long virtually losing all my investment in the process. For the record, I was using E-Trade as my broker at the time.

Choosing a Broker

If you are already familiar with penny stocks and how to trade them, the next step is choosing a broker. Sometimes it can be hard to cut through the brokerage banner ads, personal opinions, and what really matters.

What to look for in a penny stock broker

Low account minimum – For obvious reasons you want to pick a broker that will allow you to start off with a lower balance. Not always, but typically investors looking to start investing in penny stocks do not have a large amount of liquid capital to move around. Therefore, you should choose a broker with a lower account minimum balance requirement, such as E-Trade or TD Ameritrade.

Excellent research platforms – Penny stocks are not always reported on in the media, and often are subject to fraudulent marketing schemes, otherwise known as “pump and dump”. In order to effectively pick stocks, you want to choose a broker that has reliable and quality research reports.

No hidden fees – The last thing you want is to be gouged by hidden fees. When you are actively trading large amounts of stocks, sometimes the margins you are getting on your returns are quite small. Hidden fees can easily cut into that, and most of the time are completely avoidable.

Volume discounts – Do whatever you can to drive down costs. If a brokerage can offer you volume discounts (like Ally Invest) and you plan on having a large volume of trades, it may make sense to go with that brokerage.

Best Overall

Lower fees, reputable companies, and amazing research reports. TD Ameritrade and E-Trade are at the top of our list. They cover all the bases necessary to put you in position to make sensible penny stock trades.

Best For
  • Advanced traders
  • Options and futures traders
  • Active stock traders
Best For
  • Novice investors
  • Retirement savers
  • Day traders

Best Options for Low Fees

Robinhood obviously takes the cake here, with their free trading service. E-Trade also provides low fees with volume discounts available, but Ally Invest has those low fees from the start. Ally and Robinhood brokerages will not hit you with unexpected hidden charges.

Best For
  • Cost-conscious traders
  • Advanced traders
Best For
  • Beginner traders
  • Mobile traders

It’s the little things. Moomoo’s conditional alerts generate automatic notifications based on price movement and change in indicators. The powerful app also offers high-grade account protection. The powerful app’s intuitive investing platform is perfect for both brand-new investors and professional traders.

You’ll enjoy:

  • Charts and technical indicators, including candlestick, bar and MA, BOLL, MACD, KDJ 
  • Integrated research ratings 
  • Capital trends
  • Graphical financial reports

Plus, it’s commission-free for U.S stocks, ADRs, ETFs and options. Learn more about Moomoo.

Best for Experienced Traders

Still providing lower commissions for trading, these two brokerages do require more of a minimum balance. That being said, they offer a great platform for experienced traders, so a minimum balance in your account likely will not be an issue.

Best For
  • Advanced traders
  • Options and futures traders
  • Active stock traders
Best For
  • Cost-conscious traders
  • Advanced traders

Compare All of Our Top Penny Stock Broker Picks

See the table below to compare and contrast the features that matter to you most. We also have a number of other brokers on our complete compare page.

Commissions
$0
Account Minimum
$0
Get started securely through Webull’s website
Commissions
$0
Account Minimum
$0
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • Commission-free trading in over 5,000 different stocks and ETFs
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Leverage of 4:1 on margin trades made the same day and leverage of 2:1 on trades held overnight
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in options, mutual funds, bonds or OTC stocks
Commissions
$0
Account Minimum
$0
Get started securely through TradeStation’s website
Commissions
$0
Account Minimum
$0
1 Minute Review

TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.

Best For
  • Advanced traders
  • Options and futures traders
  • Active stock traders
Pros
  • Comprehensive trading platform and professional-grade tools
  • Wide range of tradable securities
  • Fully-operational mobile app
Cons
  • Confusing pricing structure to leave new traders with a weak understanding of what they pay
  • Cluttered layout to make navigating TradeStation’s platform more difficult than it should be
Commissions
$0 $6.95 for OTC Stocks
Account Minimum
$0
Get started securely through TD Ameritrade’s website
Commissions
$0 $6.95 for OTC Stocks
Account Minimum
$0
1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Best For
  • Novice investors
  • Retirement savers
  • Day traders
Pros
  • World-class trading platforms
  • Detailed research reports and Education Center
  • Assets ranging from stocks and ETFs to derivatives like futures and options
Cons
  • Thinkorswim can be overwhelming to inexperienced traders
  • Derivatives trading more costly than some competitors
  • Expensive margin rates

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