Choosing the right broker can be somewhat difficult for penny stocks trader. The reason being is there are too many of them and they are all different in some ways. If you are trading penny stocks it’s because you don’t have a large some of money available to you to finance. It is crucial that you don’t pay fees in one broker that you could have saved from another broker.
But many brokers would enjoy doing business with you because they have fees for penny stocks traders. Some of them have outrageous commission fees while their services are very poor. You don’t want to spend the money you gain into commission fees. Some brokers charge more when your order is large, it’s very beneficial to look for a broker that has a flat fee for transactions.
You need to watch out for their volume restrictions. Some brokers put a limit on the number of shares that you can order, some of them even have a daily limit on your trading activities. But not every broker has these type of limits. For this reason you have to look careful and read their fine lines before you open a trading account.
Some brokers would not let you trade stocks under $0.01, which is not considered too low in the penny stocks market. But they just choose not to let their customers trade them. If you know you would trade penny stocks that cost as low as $.01 you will have to ensure that your broker allows that. Volume restrictions are found in many brokers, those volumes are set in order for you to make more than one order and pay twice the fees.
Next, look for a broker that has a platform that’s easy to navigate. Some of them are very good, very user friendly while others may be hard for some people to get acquainted with. You don’t want a platform that would waste your time before you can finally execute a trade.
You may want to take a look at these broker
tradeMonster is not a bad broker for penny stocks traders. They have a paper trading platform in which you can practice trading if you don’t know how to. This paper trading platform put $100,000 paper money available for you to practice. their current charge per trade is $4.95, which is not expensive as compare to the other brokers. They don’t have any platform fees, which is a plus.
TD Ameritrade is a broker I have some experience with. The platform is great for any trader’s level. It has a flat fee of $9.99 and there are some great tools on their platform, including Level 2. Although its fee is not low, it is considered as one of the best brokers out there.
Optionshouse, like tradeMonster has a practice platform. They are one of the cheapest brokers I know, charging $ 4.75 per trade. This broker provides trading tools that are very reliable.
There are many more that are very good, if you take your time to do some research before you open your account you will definitely find one that you like.