Find a Penny Stock Broker That Suits Your Trading Style

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Choosing the best penny stock brokers for your trading style is a very individual decision.  Each broker has a different pricing structure for buying penny stocks or a large block of stocks.  You need to understand how you intend on trading before choosing online penny stock brokers in order to better gauge how much money your orders will cost you.  If you have an eradicate trading style than you may want to open an account with multiple brokers so that you can use the proper broker for the proper trade.  For the new penny stock trader, keeping your commissions under control can be the difference between profitability and bankruptcy.  For the advanced penny stock trader, you already know that one website order drop or delayed order fill can turn the best trade of the year into a missed opportunity or even a nightmare.

Here are a few of the top penny stock brokers and their differences.

Zecco is dirt cheap, no doubt about it.  They are currently at $4.50 per trade with no “per share” fees.  The only problem is they don’t emphasize penny stocks in their trading.  Normally, this means they don’t know the penny stock community.  They are really great though if you also do forex and option trading.  If you are a smaller trader this is a great option because the low flat fee makes the commission percent of trade very manageable.

TDAmeritrade is a little more expensive stock broker.  The good part is they have a emphasis on OTCBB or pink sheet trades for the same flat fee of $9.99 per trade.  This company is very established with very powerful charting tools and the ability to trade pre and post trading hours.  This is great for those nano companies that love to give press releases at the closing bell.

ChoiceTrade is another cheap option at a flat $5 per trade fee.  They also offer mobile trading (for you cell phone junkies) and direct access trading.  If you are a scalper or large trader than direct access allows you to bypass the web portal and order batching.  Your order directly hits the market on your own.  The bad part of ChoiceTrade is they charge for almost all of their information services on a monthly basis.  These nickel and diming fees are both annoying and draining when your trading is going poorly.

SogoTrade is probably my favorite unknown online broker.  They are only $3 per trade!  However, for the true penny stock traders (Under $1 per share) they add ½% of the trade value for each trade.  They have great trade execution (basically a virtual direct connection) and no inactivity, information, charting, or any other hidden fees.

I question LowTrades simply because they won’t post their pink sheet fees.  They have a nice low $4.95 flat fee, but they say there are settlement fees for OTC stock trades, but they are not listed anywhere.  That just screams trouble to me, so I haven’t even bothered to try them.

Scottrade has a $7 fee with a ½% principal fee for stocks under $1 per share.  However, they are a powerhouse in the industry.  They offer quality information and charting systems and how massive trading power since the volume of dollars they move affords them the best stock traders and programmers.

In summary, though there isn’t one best penny stock broker for everyone, if you’re brand new to penny stock trading I recommend you just go the cheapest route which would be Zecco unless you are only doing NASDAQ penny stocks ($5 per share) in which case I would probably choose SogoTrade.  If you are a larger investor I would go with ChoiceTrade for the quality direct access or Scottrade for the professional platforms.

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1 comment so far ↓

#1 chuck on 01.15.12 at 8:45 pm

Thanks for the great information.

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