Some Of The Top Penny Stock Brokers To Know This Year
When it comes to penny stocks, you need to have a basic understanding of how to trade. This involves basic things like research and the ability to manage risk. Aside from those, you also need something very important if your goal is to make money with penny stocks. That “something” is a broker.
Think about it for a minute. Even if you were to find the perfect penny stock to buy, without a way to actually purchase shares, you’re simply window shopping. Now, when it comes to finding the best brokers for penny stocks, you’ll have to keep a few things in mind.
First, are you going to be actively trading every day or every other day? On the other hand, are you going to be more of a long-term investor or swing trader? The basis for this is brokerage fees. If you actively trade, you’ll likely incur more fees than someone who passively trades “here and there.”
Also, figure out what kind of features are you looking for? Do you simply need to place trades or are you looking for charting software and other technical trading features? When it comes to the brokers that have low or no-fee trading, some advanced feature-sets aren’t available. That may simply be due to the fact that it costs more money on the broker’s end to host such technology. Needless to say, if that’s your choice, there are plenty of other online resources to use outside of your web app or mobile app.
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So what are some of the best brokers for penny stocks? I would suggest using one of the online options. The fact of the matter is that these types of stocks are so volatile, having to pick up the phone and call an actual person takes minutes when the market moves in a matter of seconds. A self-directed account would be what to look for in this case. You’ll also want to make sure that the broker in question allows you to actually buy penny stocks.
Best Penny Stock Brokers For 2020
Though some brokers allow you to buy stocks under $1, they may restrict access to certain exchanges. Most popularly, the OTC exchange has fewer listing requirements. As a result, there are fewer regulatory hurdles for companies to go through. Therefore, some important information may not be given based on the fact that it isn’t necessary for companies to report such info. In this case, some brokers won’t give access to such stocks.
Remember what I said above when it comes to finding the best penny stock brokers. Fees, frequency, and features are 3 big things to consider. How much it costs to place a trade with both buys and sells will help or hurt your portfolio. This also takes into account the trade frequency you undertake. Many traders can see fees add up quickly so if you trade frequently, low fees are your friend. Finally, features are an added bonus.
Having the ability to see more than just penny stock news can give you an edge. Technical indicators, charts, etc. can all add to your research potential. So what are some of the best penny stock brokers for 2020? In no particular order, here are some of the top penny stock brokers to know about right now.
Best Penny Stock Brokers: Interactive Brokers
This is one of the more versatile penny stock brokers out right now. It’s also one of the few that allow trading in international markets. Whether its trading Canadian penny stocks or penny stocks in the US, Interactive Brokers has you covered. Furthermore, it offers a plethora of different pricing options. There are tiered, fixed, and free options.
Free fees include no commission on IRA’s as well as ETFs and US-listed penny stocks. The company also offers high-quality desktop, mobile, and web trading. Though it isn’t as mainstream as it may seem, there are many who trade penny stock migrating to this broker.
Best Penny Stock Brokers 2020: E-Trade
E-Trade (Etrade) is a great platform for active traders. It allows access to penny stocks trading on all major U.S. exchanges as well as OTC penny stocks. Not only are there tools to use via the company’s website, but it’s also got a great portfolio of additional tools like the ETrade Pro platform.
Whether it’s charting, using technical indicators, or finding breaking news, the application gives a lot of options for clients. ETrade also has a dynamic mobile application too. It gives a wide range of tools similar to the desktop app. However, customization is a bit limited in comparison.
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As far as fees are concerned, ETrade is very accommodating to active traders. Options trades are $0.65 per contract or $0.50 for traders making more than 30 stock, ETF, and options trades per quarter. Furthermore, there are $0 commission fees for trades made in penny stocks on the NASDAQ and NYSE. OTC penny stocks, however may incur trading fees. Needless to say, it’s a popular trading app and platform used by thousands of investors each day.
Best Penny Stock Brokers: TD Ameritrade / Charles Schwab
Next on this list of penny stock brokers, TD Ameritrade & Charles Schwab. Now, it’s important to understand that these two brokers conducted and agreed to terms of a merger with Schwab taking over TD. Through a $26 billion deal, the new firm will have control of some $5 trillion or more in assets. However, until the deal is completed, fully, each is operating independently (for the time being).
TD Ameritrade is similar to Etrade in that it offers a counter to the “ETrade Pro” platform. TD’s is called Think or Swim. It doesn’t cost anything to gain access. ETrade might charge an access fee for ETrade Pro depending on your activity or lack thereof. When it comes to fees, TD doesn’t charge a commission for U.S. stock, ETF or options trades. It charges a $0.65 per options contract fee and for OTC penny stocks, there is a $6.95 commission. Schwab is similar.
The penny stock broker cut its trading commission on all NASDAQ and NYSE stocks along with the same $0.65 per-contract fee on options. Additionally, there are fees to trade OTC penny stocks. Another benefit of Schwab is its background in financial planning. The brokerage house is very upfront when it comes to investment vehicles, savings plans, and myriad vehicles for retirement investing.
Best Penny Stock Brokers: Robinhood
This is a very popular trading application that has captivated many new and young traders. Initially popularized by millennials, Robinhood and penny stocks have gone together like peanut butter and jelly. It was the original no-fee broker that essentially forced the hands of the largest brokers out there. There are basic indicators like charts, while there is also access to things like Level 2 if you pay a small monthly fee for Gold access.
The biggest downside of using Robinhood for penny stocks is that there isn’t any access at all to trade OTC penny stocks. They aren’t even on the platform. So when it comes to buying the majority of marijuana penny stocks, for example, you’re restricted to only the names trading on the NYSE and NASDAQ.
Still, other features like showing how many accounts hold certain stocks is convenient as it helps gauge demand for certain stocks. It’s free to sign up and no minimum required deposit. You can also trade cryptocurrencies on the platform as well.
Best Penny Stock Brokers: Fidelity
Fidelity is growing in popularity especially when it comes to trading penny stocks. It’s very thorough in educational material and competes with other brokerages with similar terms on commissions and fees. One of the advantages of Fidelity is that it comes in handy when you have cash in your account that isn’t in the market.
The cash sweep option on approved accounts offers a Fidelity® Government Money Market Fund 7-day yield. The interest percentage is 1.25%. That’s compared to less than 1% for most of the leading brokers out right now.