4 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.
Zecco
Zecco are now well established and out of all the penny stock brokers, they have to be my first choice. They tick all the right boxes for me and they offer up to 10 free trades per month on accounts over $2,500. After that trades are a very reasonable $4.50 each. An advantage of this broker is there is no account minimum, so if you only have a small amount to risk, zecco could be your best bet. Another thing I really like about Zecco is unlike many brokers, you can signup quickly without the need for excessive amounts of paperwork. There are also no inactivity fees.
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. Like Zecco, Low Trades also have no minimum account balance.
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.