Tag Archive | "Picking A Penny Stock Broker"

Picking A Penny Stock Broker


Picking A Penny Stock Broker | What to Consider

Picking a penny stock brokerPicking a penny stock broker is not as easy as just picking the first penny stock broker that has reasonable commissions.  While many online stock brokers offer penny stock trading services, a closer look at what each broker actually offers regarding penny stock trading services reveals some significant differences between the various online brokers.  When it comes to picking a penny stock broker for trading penny stocks it is also important figure out what they do not offer, as far as trading penny stocks.

The most important thing to consider when picking a penny stock broker is how active you are trading penny stocks.  If you are not very active trading penny stocks, then using one of the major online brokers, such as Fidelity Investments or E-Trade, should be sufficient as far as the ease of using their online trading interface and the cost of the trades.  The easy user interface for trading penny stocks and strong customer service make major online brokers a good choice for trading penny stocks.  However, if you are an active penny stock trader, or plan to be more active in the future, then you may want to consider one of the penny stock brokers that offers lower trading commission, since commissions can add up quickly, if you execute numerous penny stocks trades.  You may lose some customer support and have to deal with a more complicated trading interface, but some of these online penny stock brokers also provide advanced penny stock trading services, such as direct order routing, that active penny stock traders will find useful in their quest to make money trading penny stocks.  Two of the most widely used low commission penny stock brokers are: MB Trading and Zecco.

Picking A Penny Stock Broker | What To Watch Out For

While the major online brokers, such as TDAmeritrade or E-Trade, offer easy to use trading interfaces and strong customer service, there is one major drawback that a trader needs to consider when picking a penny stock broker.  Some online brokers restrict trading in certain penny stocks, especially penny stocks that are non-Depository Trust and Clearing Corporation (DTC) eligible stocks, which are stocks cannot be deposited electronically by online brokers into penny stock trader’s accounts.  This is done to protect the online brokers from incurring substantial fees for facilitating trading in non-DTC stocks.   Some online penny stock brokers will also not allow their clients to trade penny stocks that have been given the Caveat Emptor (buyer beware) label by otcmarkets.com.  While these restrictions may be for the best for many inexperienced penny stock traders, those with experience may miss out on penny stock trading opportunities, and should consider avoiding penny stock brokers that have such restrictions when picking a penny stock broker.  TDAmeritrade is known to restrict trading in numerous penny stocks, while other penny stock brokers, such as Zecco, charge hefty fees for trading such stocks.

The key to picking a penny stock broker that you will be happy with in the long run and that will help you be a successful penny stock trader is to do your homework on the various online penny stock brokers and find the one that best fits your trading profile.  Some penny stock traders find the picking a penny stock broker means using more than one to avoid trading problems at any one broker and keep their trading options open.

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