Penny Stock Brokers
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Shopping for the best penny stock broker for your own trading? Low commissions and fees are certainly a big consideration – but not the only thing that matters. There’s also customer service, reliability, speed of trade execution, streaming quotes, a good web interface, and free software bundles.
There are top stockbrokers like ScottTrade and TD Ameritrade. There are the super low cost online brokers like Zecco and Just2Trade. There are penny stock brokers that win customer service awards, like TradeKing and Fidelity. Which should you choose? Maybe more than one?
You’ll want to see the Best Penny Stock Broker Internet survey.
And while you’re here, don’t miss our free profitable penny stock trading system. There are also tutorials on using the Stock Twiter service and Equity Feed software, two tools we are promoting because we find them personally useful to day trade penny stocks effectively.
What’s different about our penny stock website is that you’ll hear from small investors like yourself. Our internet best penny stock broker survey, for example, is made from the preferences and comments of about 150 small penny stock investors. Penny stock trading can be dangerous for the uninitiated, so please read the articles we have provided here.
Read below for a trader’s take on the best online brokerages.
How I choose my Penny Stock Brokers
You don’t have to choose just one stockbroker! I personally have accounts set up with four different penny stock brokers because they are all good at different things. Let me explain why I chose to do this and how I implement each online broker into my trading system.
Penny Stock Brokers: Zecco, ScottTrade, Ameritrade and Etrade
For example, Ameritrade integrates with the EquityFeed Trading Platform I use and executes trades quickly. I use Etrade as my back up penny stock broker to Ameritrade in case Ameritrade is experiencing server issues which is a rare event, but has happened. I have been locked out of my account at the opening of a trading session and would have missed out on thousands of dollars of profit, but I was able to log into my Etrade account and make the purchase. Ameritrade and Etrade provide pretty much the same service, but Etrade has slightly better tools. Etrade’s Level 2 quotes are much better than Ameritrade’s and Zecco’s Level 2 quotes. I do not use Etrade’s tools because I use other applications which are significantly better.
Zecco and Scottrade are other popular penny stock brokers. Scottrade is very popular because they have low commissions and are easy to work with. Zecco is my favorite for cheap trades as they often give you free trades every month. I try to use these up before paying commissions at Ameritrade. Unfortunately, Zecco does not always show accurate level 2 quotes and can be slower than Ameritrade and Etrade at executing orders. All of these brokers will allow you to also buy big board stocks. Many premium brokers will not let you buy penny stocks because they usually end up losing money on the trade. This is because it’s easy to stick your clearinghouse or broker with shares that you sold to them to close your trade. Many of these brokers are also shorting penny stocks and this creates a conflict of interest between company and client.
Penny Stock Broker Customer Service
Support is obviously important and you should be able to call in and speak with a real person without being put on hold for more than two minutes during trading hours. Most of the phone support is trained to handle big board clients, so they are clueless about how to trade penny stocks. Be prepared to hold their hand as you become more experienced and always be sure to place a limit order. I only call support to place a trade for a restricted penny stock or to have them fix a glitch in my account. Once you have more than $25,000 in your account and are flagged as a pattern day trader, you should consider upgrading to a direct access software account. DAS is only for experienced traders as it allows you to route orders through different market makers, and gives you the ability to stack the bid or ask in your favor. Most of the DAS penny stock brokers use the same platform, but just put their name on it. Most traders would recommend opening accounts with at least two penny stock brokers.
Where to Start
Above are some of my own ratings for online brokerages based on personal experience using their different interfaces and trading platforms.
I hope you have found this best online broker review helpful. To get started, take a look at a few of the best online stockbrokers recommended on our penny stock broker poll and then choose the broker(s) that gives you the best service and commissions during your initial account set up.