Trading penny stocks can lead to fast profits and losses. But not everyone wants to be tied down to a desktop for trading. Today, you can find a variety of brokers that offer clean, easy mobile apps with great execution, and the right mobile app can make the difference in your success.
Quick look – our favorite penny stock trading apps
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Penny stocks are defined by the US Securities and Exchange Commission as stocks with a listed price at $5.00 or below. These stocks typically are quoted over-the-counter (OTC) but also appear on major exchanges, including foreign exchanges. Penny stocks are characterized by a low price, low liquidity, and wide spreads. You may see stocks quoted with a bid of $0.05 and an ask of $0.10. If you buy at the ask and the stock trades at the bid, you’re immediately down 50%. Despite the risk, people continue to flock to penny stocks as a way to make money quickly. In 2015, a case of mistaken stock identity sent shares of Rivera Tool (RIVT) up 4,400% overnight. Today’s market contains many large companies that were once penny stocks, including Concur Technologies (CNQR) and True Religion (TRLG). Want to learn more? Check out Benzinga’s Best Penny Stocks.
What to look for in penny stock apps
When you pick out a penny stock app and broker, consider the following:
- Fees: The difference between brokerages on their commissions can range from a few dollars to tens of dollars. Fees may depend on how many shares you trade.
- Service and support: You want to have solid customer service in case things go awry or you have questions. The last thing you want is to be in the middle of the trade with no internet and an unreachable trade desk.
- The number of stocks available: You will find that some brokerages limit themselves to major exchanges while others allow for trading on the OTC markets.
- Execution speed: Speed is especially important for day traders. You want your trades to enter and execute quickly to get the best possible price.
- Ease of use: Any penny stock trading app should be easy to navigate and use.
- Operating system support: Mobile applications should work on Android and iOS systems. Otherwise, you may end up with a mismatch to your phone.
How we chose the best penny stock trading apps
Selecting the best penny stock trading apps focused on a combination of the brokerage and the app. A great app without a good brokerage to back it up leaves you with poor trade execution. A great brokerage with a poor app makes it difficult to handle your trades.
1. Ally Invest
Ally Invest makes penny trading very affordable. If you trade more than 30 times in a quarter, you can drop the price per trade down from $4.95 to $3.95. That makes them one of the lowest flat brokers out there. And, they care about their users’ mobile experience, with research, tools, and other information at their disposal when they’re on the go. Read Benzinga’s full Ally Invest Review
Not too many apps allow you to trade for free. In fact, the only major one is Robinhood. This small startup made waves by letting retail investors trade stocks for free. You won’t be able to use this app to day trade or execute complex strategies. However, cutting out the commission fees on trading penny stocks can make the difference in profits and losses. Read Benzinga’s full Robinhood Review
3. Interactive Brokers
Interactive Brokers tops the list for the lowest costs. Stock trading fees come in as low as $0.0035 to $0.005 per share based on volume. If you end up trading higher volumes you should choose flat rate fees instead. One cool feature of Interactive Brokers is the addition of IBot. IBot works with Amazon’s Alexa and allows you to trade by voice command. Read Benzinga’s full Interactive Brokers Review
E-Trade gives you dual options to match your trading style. Its OptionsHouse app provides a companion program to its web-based platform. The app allows you to quickly find and execute trades on penny stocks. Advanced traders can view market depth ladders. You could also choose the E-Trade mobile app. The robust app allows you to both trade stocks as well as manage your money. This makes it easy to move funds around to support your trades. The app lets you view Bloomberg TV, third-party research and breaking news. Read Benzinga’s full E-Trade Review
Fidelity‘s trading costs remain reasonable at just $4.95 a trade (recently reduced from $7.95). Fidelity’s mobile app lets you go from research to trading in a matter of taps, and it backs up the app with a solid website that provides exceptional research and education material. You can also manage your cash accounts through the mobile app. This lets you quickly add funds to your trading account as needed. The customer service really sets Fidelity apart. Fidelity offers 24/7 support through phone, email and even text. If you want help learning how to trade penny stocks using their mobile app you can stop by one of their offices. Read Benzinga’s full Fidelity Review
Mobile penny stock apps will only provide you with so much information. If you want to research a penny stock company spend time on the broker’s main website. Even if you plan to day trade penny stocks, the mobile apps should be a supplemental part of your strategy. Take time to sit down and develop a robust plan rather than relying entirely on the mobile app. The best way to use the mobile app is to execute trades at your specific price and monitor your positions.