Researching Penny Stock Brokers

Researching Penny Stock Brokers

Here I will tell you the basics of how to begin researching penny stock brokers. You need to have some basic data on each penny stock broker before you make a decision. Every person’s situation may be different, so I can not just tell you one simple place to go for your stock brokerage needs.

A penny stock broker is basically just like any other broker with one caveat: they allow or are willing to execute penny stock trades. Some brokers simply do not want engage in the penny stocks. Some will execute penny stock trades for you, but at a greater expense than standard trades. Some will help you trade penny stocks but only if you trade in large volumes. Some provide discounts for higher volume trades and those discounts are almost necessary as trading otherwise are prohibitive.

There are some basics you should look for when considering penny stock brokers.

What minimum balance do they require and can you keep that balance comfortably? Does the broker have an annual fee? Are there conditions which might lead to annual fees (such as being an inactive trader for a period of time, like a month)?

How much do they charge per order, and specifically how much do they charge for orders involving penny stocks? How do the charges change depending on volume of orders (either volume of shares per order or volume of shares ordered over a period of time). Of course, the most important question to ask is how they deal with orders or securities listed on OTC quotation services like the Pink Sheets and the OTCBB.

What kind of research tools and resources are provided? You will pay more per order and overall for services with robust research tools and investment services, but sometimes they’re worth it.

Some reputable small cap stock brokers to get you started include: MB Trading, E*Trade, Zecco, Sharebuilder. However, these are just a small sampling. Please note that all these are established and well-known brokers.

You do not want to pick someone trying to sell you their services independently. There are many sharks in the online stock trading business; stick to the well-known stock brokers when entering the precarious microcap trading market.

I hope this helps you get started in your research for penny stock brokers.

I have collected and reviewed all the best penny stock brokers on my site. Here is a detailed list with descriptions explaining exactly why they’re my top brokers: Penny Stock Brokers.

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