Mar 20, 2011

Posted by in Stock Market News | 0 Comments

Penny Stock Broker

Penny Stock Broker

Choosing the Best Online Penny Stock Broker

When it comes time to selecting a penny stock broker, one must keep in mind there are many variables to research and consider. In order to maintain long term success trading penny stocks, your broker will play an important role in identifying and recognizing the intangibles that separates average from greatness. But how can you determine who is the best in breed?

After doing extensive research and due diligence for quite some time on this matter, we’ve realized 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. Deciding on the right broker can save you thousands of dollars a year in profits. Being selective can be the difference between having a stellar year and hardly breaking even. In fact, having the right broker is the most important choice you can make other than choosing what stock to invest in.

In our opinion if you are new to penny stock trading, you should really consider a full-service broker at first. They can assist you in learning the ropes and developing good habits for trading small-cap stocks. The best online penny stock brokers are not only are the ones who can give you the best service, but the one who guides and encourages good habits in the long run. Services such as Fidelity and Charles Schwab offer excellent full-service online.

1) TD Ameritrade is an online brokerage firm that offers stock trading options. At TD Ameritrade, Fair Pricing across the board is what you pay for. And maybe a little bit more. Free tools, Free research, and Free Support…All for just $9.99 per trade, with no maintenance fees or surprises. Option contract commissions cost $9.99 plus $0.75 per contract. When you compare that with other online brokers, there’s just no comparison.

Regardless of account balance or how often you happen to trade, start investing commission free for your first 30 days of trading. Plus, plenty of easy to use tools are accessible to refresh your investment strategy. Ameritrade is also easy to navigate, with several applicable platforms to choose from making it a plus for novice traders to become familiar and comfortable in a short period of time based on our survey. From past experience our team has had plenty of positive comments regarding previous entries and exits of penny stocks through Ameritrades’ software. Two thumbs UP!

2) E*Trade is a publicly traded company that operates under the symbol ETFC with a market capital of $3 billion. Power E*Trade Pro is a powerful tool that many can appreciate.  It’s well-known for its online discount stock brokerages.

Getting back to basics, free independent research and smart investing starts with the right information. Get independent analyst research from leading sources like S&P, Thomson Reuters, and Research Team. E*Trade offers easy to use investing tools. Many stock, fund and ETF screeners to utilize. Plenty of assistance and guidance when you need it.

With only a minimum of $500 to open a cash account, it is no secret why E*Trade has such a large fan base of clients. All stock and options trades fall into the $7.99-$9.99 per trade while option contract commissions are labeled @ $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 coarse. Being penny stock friendly and not having to worry about inactivity fees are 2 more bonuses that help its cause.

3) Scottrade: Scottrade is one of the cheapest online brokers you will find. It charges $7 for both market and limit orders. There are no quarterly or annual fees. So even if you are an inactive investor, you won’t be penalized for “not trading.” The only drawback for penny stock investors is this…

In addition to the $7 flat commission, they charge an additional fee of 0.5% of the total principal. So if you spend $500, you owe Scottrade an addition $2.50 added onto that $7 commission – making your total commission come to $9.50.

Like E*TRADE, Scottrade is a very bare essential broker. There is no babysitting here, but on a more positive note…It is flat-out CHEAP in our book

4) Interactive Brokers: IB’s commission structure was much more indepth than most. But it’s worth taking the time to get familiar with. Due to their detailed technical analysis offering great  charting indicators, IB happens to be a fan favorite. The commissions are as follows:

They charge $1 to trade 100 or less shares. If you buy more than 100 shares, the commission is $0.005 per share. So if you wanted to buy 5,000 shares, it would cost you $25.

Although there is a minimum account balance of $2,000 to start an account with IB. And if you are a day trader, one will have to muster up $25,000 and fall into the PDT = Pattern Day Trader category. The only additional fee you may have to pay is a $10 monthly inactivity fee which will be waived if you spend enough on commissions and research.

When it comes to trading penny stocks, IB charges 0.2% of the total price of the trade. So if you buy 5,000 shares of a 50-cent stock, the commission will be $5.

5) Choicetrade: Choicetrade is accepted by many folks due to the fact that they do not have a minimum balance required to open an account unless you plan on taking on a margin account or entering the Pattern Day Trader category. Its also a very unique broker dealer due to its commission breakdown. All you need to know here is $5.00! 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.

Another plus at Choicetrade is no charge for inactivity and quarterly fees. So keep in mind, if you are not an active trader or investor, Choicetrade is an option to consider looking into for various reasons.

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 extended hours trading Choicetrade has a steep $0.005 per share surcharge. Plenty of powerful trading tools to utilize as well as a built in trading community to access as well. Choicetrade is making the necessary adjustments in a very large industry to make a name for itself in a hurry!

6) Zecco Online Broker: Zecco is one of the few discount online brokerages that offer Forex trading. No account minimum, no inactivity fees and free dividend reinvestment are great too. Once again Zecco  has no inactivity and maintenance fees. Zecco also does not charge platform fees.

We found this offer quite interesting,  Zecco customers with over $25,000 in balance or making over 25 trades per month get 10 FREE trades EVERY month and ALL other trades are just $4.50! Certainly something to sink your teeth into especially if funds are limited looking to save as much anywhere one possibly can.

Another plus, Zecco does NOT charge any additional commissions for large orders or penny stocks.

* Please be advised that the mention of a broker dealer on this page does not reflect on their merits in any one specific category. In summary, Everyone must due their own due diligence and research to find a fit that suites their own investment objectives and needs. Broker dealers that have not been mentioned in this article were left out based on the criteria that we received in abundance and found most valuable from our subscribers questions and commentary in the past. Stay tuned for future updates and trade well ALL!

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