Six of the Best Penny Stock Brokers

If you are trading penny stocks you definitely need a broker with the right commission structure to make it worth while. Here are the best penny stock brokers I have come across in order of commissions per trade.

Buy Stocks Online for $0. Trade stocks for free on Zecco.com

Zecco is an excellent choice of broker. Few brokers offer as many free trades per month as Zecco. If you exhaust the free trades, subsequent trades are as low as $4.50. In my opinion this gives them an edge over competitors including Schwab, Ameritrade, and E*Trade who are more expensive. How is Zecco able to offer free trades? The Zecco business model includes revenue from website advertising, plus they do require a minimum balance. The trading platform gets good reviews and the satisfaction amongst clients is high. If the minimum balance makes them unsuitable for you, OptionsHouse would be the next best suggestion.

Get 100 Commission-Free Trades at OptionsHouse.com!

OptionsHouse has a particularly good deal for 100 free trades on new accounts (use the link above and the coupon code FREE100). OptionsHouse allow up to 50,000 stocks per trade, per order for the low price of $2.95 which seems very reasonable. Although you need to watch out for extra small fees on trades of penny stocks less than $2 per stock, the 100 free trade offer combined with the $2.95 brokerage thereafter makes it well worth opening an account with them during this promotion.

$5 Trades at ChoiceTrade.com

Choicetrade is now one of my top picks for penny stocks. They charge a flat rate of $5 per trade. It doesn't matter what the price of the stock is or how many stocks you trade. The price is still just $5. They are perfect for trading penny stocks. They also have no minimum account size.

Is TradeKing really the king of penny stock brokers? Certainly they are becomming very popular, partly due to their sub $5 trades. At $4.95 a trade (65 cents for an option contract) they are good value. They have some nifty software including a profit loss calculator and an option probability calculator but I'm not sure how much use these features are. No minimum account size which is a big plus. I like the fact TradeKing accounts are backed up to $25 million by the very reputable Lloyd's of London. Definitely in my top 5 penny stock brokers.

Low Trades

Low trades is very much a discount broker. They offer the bare bones and low commissions as a result. Commissions start from a highly competitive $4.95 per trade. I like this broker a lot, however one thing that I don't like is they have a hefty inactivity fee of $50. You have to place trade at least bi-yearly to avoid the fees. However, if you are trading penny stocks, this is unlikely to be much of a problem. They also offer services like real time streaming quotes, but you have to pay extra for these.

Scottrade

Scottrade is another cheap broker, making it ideal for trading penny stocks. However, I am not really do not like the commission structure as I feel it is unnecessarily complicated. They charge $7 commission per trade plus on penny stocks they charge an additional 0.5% of the value of stock purchased. So if $500 of penny stocks were purchased, you would have to pay an additional $2.50 on top of the $7 per trade. Scottrade have a minimum account size of $500, but there are no inactivity fees.

ShareBuilder

Sharebuilder is a relatively new broker, but I feel it is suitable for penny stock trading. They have fairly low commissions at $9.95 per trade. They also offer "automatic investing" where trades cost just $4. This is where you set a schedule to buy stocks, at a specific time interval (for example every other tuesday), so this option may not be suitable for penny stocks. Sharebuilder has no account minimums and no inactivity fees.

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