IMPORTANT! - Before you begin searching for Penny Stock Brokers...
When browsing through the Penny Stock Brokers below, there are a few critical points to look for. The majority of brokers have fees that make penny stock trading more expensive than their big, colorful price tags lead you to believe. The truth is that a lot of brokers don't want to deal with small accounts trading penny stocks as they make the most money from large and active accounts.
To deter penny stock trading, brokers may have fees that affect the trade of low priced stocks, usually less than a dollar. Another typical method is to have a "large order surcharge" that kicks in with trades of more than 1,000 or 100,000 shares. With penny stocks, most notably sub-penny stocks, a small $500 position could be over 100,000 shares. These additional fees are usually noted with an asterisk in small print at the bottom of the page. We have made note of these fees with the brokers listed on this page, just look at the "Penny Stock Fees" column on the chart and read the notes. If you find a broker not listed here, make sure to look at the fine print... and if they have a good commission, and none of these pesky fees, let us know!
As you will see, the brokers that have none of these fees are ETrade®, Fidelity®, and TDAmeritrade®. ChoiceTrade® has a new fee that went into effect 12/1/10 that adds 1% of the trade value to orders in excess of 500,000 or more shares. This new fee is driven by their clearing firm, Penson, and hence you will see that Zecco® has now changed their pricing policy for penny stocks as well. We also received an email notification from Zecco on 8/19/11 stating that any settlement fees for Non-DTC securities will now be passed on to the trader. They state that these fees can be as high as $700, and you won't even know of them until as much as three weeks later. You also have no way of knowing if a stock is DTC, or Non-DTC without doing specific research on your own. For this reason we are removing Zecco from our 'Gold Level', and we do not recommend trading penny stocks with Zecco at this time. ChoiceTrade, on the other hand, will not let you open a position in a Non-DTC stock, so you won't have any surprises with them.
If you aren't going to trade low sub-penny stocks, the fee at ChoiceTrade won't be an issue. If you trade a $1000 or less size, then you will be fine trading stocks as low as $0.0020. Triple-zero stocks however, will be out of the question unless you want to add ~$10 to your commission.
With ChoiceTrade offering half the trade commission of TDAmeritrade, they are very attractive options for penny stock trading. They are also Penson cleared brokers, resulting in very few trading restricted stocks, or phone-order-only stocks. Zecco is also a decent choice for penny stocks but with their new commission of $6.95 for stocks trading under $1, their offer just became less attractive. ETrade, TDAmeritrade, Fidelity and Schwab on the other hand, offer more impressive tools and customer service. For example, with ETrade you pay $7.99-$9.99 a trade, but if you do 30+ trades per quarter you'll get free access to Power ETrade Pro 5.0, which includes Level 2 quotes, even for PinkSheet and OTCBB stocks... This is a feature that could cost you well over $50 a month for a comparable service. Because of this, a lot of traders are better off to go with ETrade even though the commissions are on the higher end.
With that said, please check out all the details!
- Penny Stock Brokers Compared -
| Broker |
Commissions |
Inactivity Fees |
Min. Funding |
Penny Stock Fees - NEW! |
| ChoiceTrade |
$5 |
None |
$2000** |
1% additional on >500K orders |
| ETrade |
$7.99-9.99 |
None |
$500 |
None! |
| Fidelity |
$7.95 Flat |
None |
$2500 |
None! |
| Schwab |
$8.95 |
None |
$1000 |
Max order size 999,999 shares |
| TDAmeritrade |
$9.99 Flat |
None |
$2000 |
None! |
| SogoTrade |
$3+*** |
None |
$500 |
Low Price Stock Fee - <$1, ½%*** |
| Zecco |
$6.95** |
None |
None*** |
$6.95 for stocks less than $1. Non-DTC Fees* |
| TradeKing |
$4.95+ |
None |
None*** |
.01/share on stocks <$1 - No subpenny stocks |
| ShareBuilder |
$9.95+* |
None |
None*** |
Large Order Charge - 1,000+ shares, $0.025* |
| Scottrade |
$7+* |
None |
$500 |
Low Price Stock Fee - <$1, ½%+* |
- * for stocks trading under $1/share, total commission is $7 + ½% of trade principle.
- ** to receive $50 cash signup bonus and 4 months of free ChoiceStreamer Basic service.
- *** for stocks under $1/share, total commission is ½% of trade principle, minimum $3.
- * $4 or less for automatic investments, or $9.95 for real-time trades.
- Large order surcharge: In addition to the base commission, a large order surcharge of $0.025 for each additional share over 1,000 shares will be incurred. The total commission (base commission + surcharge) is subject to a maximum of 2.5 percent of the principal, but no less than the base commission. (does not apply to Automatic Investments)
- ** Effective March 30th, 2011 Stocks and ETFs will have a commission of $4.95, or $6.95 if the equity is under $1.00 per share. Zecco is also no longer offer free trades.
- *** while these brokers have a zero minimum funding level, please remember that we recommend trading with at least $500 per stock. Please see our Buy Penny Stocks page for more details.
- * Zecco stated in an email sent 8/19/11 they will be passing settlement fees for Non-DTC securities on to the trader. These fees can be as much as $700 per trade. Without doing research on your own you will not know whether a stock is DTC eligible. For this reason we can no longer recommend trading penny stocks with Zecco.
- Stock Broker Details -
Gold Level: These brokers offer the best combination of price for penny stocks, features and service.
Best Penny Stock Brokers!
- ChoiceTrade and E*Trade -
 ChoiceTrade® is a great discount option for penny traders as it offers $5 trades for up to 500,000 shares. For trades of more than 500K shares, an additional 1% of the trade value will be added to the normal commission. This policy went into effect 12/1/10 and mainly effect traders that like to play triple-zero penny stocks. As an example, if you trade a $1000 size, the fee will not effect you if you trade penny stocks that are .0020+. Even with the new fee, this is a very competitive offer, especially considering ChoiceTrade has received the Barron's 4-star award for five years running. They have earned this through their great pricing, speed, and customer service. ChoiceTrade is dedicated to providing a fast trading interface and super fast trade executions. They also offer several different data packages at different tiers depending on your needs. This allows you to customize your data depending on your needs and budget.
ChoiceTrade's also has a new mobile trading feature with apps for iPhone/iPod Touch, several BlackBerry devices, and all Windows Mobile 5.0+ devices with touch interface. They are in the process of overhauling their website to streamline the order process and overall user experience, while maintaining a plug-in free site that works on virtually every computer or web-enabled device including the iPad. Virtual/Paper trading is available for those wishing to practice strategies without risking their hard earned money. After trying ChoiceTrade for several months, we have given it our "Best Penny Stock Broker" designation for its super low pricing and speed. Be advised that ChoiceTrade is more of a 'bare bones' broker, giving you a fast and efficient order interface, and not much else unless you pay for one of their streaming data packages. If you're looking for a full featured broker, check out our other top broker, ETrade.
As a bonus for signing up for an account via the link below you will receive a $50 cash signup bonus, and 4 months of free ChoiceStreamer Basic service. Check out the details below.
ChoiceTrade's contact info - Phone: 877-731-9114 | Web: ChoiceTrade
Click one of our links to ChoiceTrade® and sign up for a Non-IRA, margin enabled account, fund it with a minimum of $2000, and receive $50 cash bonus from ChoiceTrade. It's free money and easy! New customers only, one customer per household.
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 ETrade® is one of the most well known and popular online brokers in the World. Trading penny stocks on ETrade, while more expensive than other discount brokers, is a viable option because of their features and ease of use. With Power Etrade Pro 5.0 you get some incredibly powerful streaming charts, quotes and tools including PinkSheet and OTCBB Level 2 quotes at no extra charge! (Requires 30+ trades/quarter to qualify) If you factor in the cost of this data with other discount brokers, using ETrade for penny stocks becomes a great option for all but the most active traders.
Trade commissions for unlimited shares is $9.99 if you do 0-149 trades per quarter. If you do 150 or more trades per quarter the commission drops to $7.99 per trade. Again, this is double what ChoiceTrade charges, but let's look at a specific scenario. Say you do 15 trades per month. With Etrade you'll pay about $150 in commissions. With ChoiceTrade you'll pay $75... but you're going to pay another $50-100 to get an equivalent data package that includes Level 2 quotes for Pinks/OTC. Even so, that data won't be integrated into your online broker interface at all, or nearly as well.
ETrade also offers more features for research, charting, and analysis, the best mobile applications in the industry... and where else can you watch CNBC live in your trading platform? ETrade has recently done away with inactivity and maintenance fees, so you won't have to worry about getting nickeled and dimed if you aren't active. The only reservation we have about ETrade is their tendency to restrict buying on certain penny stocks. We don't see this as a disqualifying factor, however. The restrictions are few, and chances are you don't want to be involved with most of the stocks that get restricted.
Overall we think ETrade gives it's clients an excellent "bang for the buck" when you consider their features, quality of those features, and top-rated customer service. ETrade has earned our top designation of "Best Penny Stock Broker" for its great included features and customer service. If you are looking for a less expensive broker check out our other top broker, ChoiceTrade.
ETrade Mobile Pro App Screenshots:
ETrade's contact info - Phone: 800-387-2331 | Web: ETrade.com
 Fidelity® is a well known name in the investment world. Until recently, however, they were not an economical choice as an online stock broker. Now they're offering flat $7.95 trades. That's $7.95, unlimited shares, no matter what price the stock is. Even better, relatively active traders (36+ trades/year on average) qualify for the "Active Trader Pro". This is a "Windows-based trading platform offers faster trading capability, streaming market data, and fully customizable layouts. Get conditional orders, directed trading, Dow Jones News, tech filters, and trailing stops." While this won't give you Level 2 quotes on PinkSheets, it is a definite improvement over the basics that other brokers offer. With Fidelity you can also trade on the go with their iPhone/iPod Touch, or Blackberry apps, or on Fidelity.mobi on any web-enabled phone. Word on the street is that they do not restrict buying on specific penny stocks often. Take that with a grain of salt, but with this combination of a good commission, features, and renowned customer service, Fidelity has become an attractive option as a penny stock broker.
Fidelity's contact info - Phone: 1-800-343-3548 | Web: www.Fidelity.com
Silver Level: This broker offers a low price, and good service, but you will incur extra fees for low priced stocks.
 Schwab® has a very similar story to Fidelity in our opinion. Once more of an "investment" oriented company, their commissions and fees for online trading were not competitive with the other options out there. Now they have dropped their online trade commission to just $8.95. The only limitation that will affect penny stock traders is that orders are capped at a maximum of 999,999 shares. Compared to other brokers, this is not as restrictive toward penny stock trading, but it still presents an issue. If you want to trade sub-penny stocks, particularly on the low end toward trip-zeros, this order maximum is going to get in your way. For a .0010 stock, a $1000 trade is a million shares... that's one share over the limit. Whether this is going to affect your personal trading is up for you to decide, for many it won't be a big deal. Schwab offers both an online streaming quote option, and a software based platform called StreetSmart Pro. With it you can get quotes, charts, news, screeners, alerts, and manage your trades with a few clicks. As of late, we have not heard much grumbling about penny stock restrictions with Schwab. If it were not for the share limit on orders, this would be one of our Gold Level penny stock brokers. If that limit doesn't affect you, than we suggest giving Schwab a serious look.
Schwab's contact info - Phone: 1-866-855-9102 | Web: www.Schwab.com
 TDAmeritrade® is one of the best known discount online brokers. Formerly Ameritrade and TD Waterhouse, the companies have now merged. Since the merge, things have gotten better for traders. They now charge a flat $9.99 for all market and limit orders no matter the order size, or stock price - including OTCBB/Pinksheet penny stocks. There are also NO Inactivity or Maintenance Fees no matter what your balance and trading activity level are. Generally there is a $2000 minimum funding level to open an account. Promotional offers may lower this, however.
UPDATE 6/10/10 - We are fairly impressed by TDAmeritrade's service and features, but recently they seem to be putting more buy restrictions, or phone-in-order restrictions on certain penny stocks. While we cannot quantitatively confirm that there is an actual increase in restrictions, there has been a noticeable increase from our perspective. This is obviously not a desirable aspect for penny stock brokers... With new competition from Fidelity and Schwab offering lower commissions and reportedly fewer restrictions, we have moved TDAmeritrade down to our Silver Level. Check out a full TDAmeritrade review here.
TDAmeritrade's contact info - Phone: 1-888-871-9007 | Web: www.TDAmeritrade.com
 SogoTrade® charges $3 for all market and limit orders, unlimited shares, including OTCBB/Pinksheet penny stocks. For stocks traded below $1.00, however, the online commission is ½% of the principal value subject to a $3.00 minimum. This is essentially the same fee as Scottrade, but it is the total commission instead of being on top of $7. So for traders playing with smaller amounts of money, or looking to trade small caps of $1+, SogoTrade is a good option. A $1000 trade of a sub dollar stock would result in a $10 commission. SogoTrade has a low $500 minimum funding level, and no maintenance or inactivity fees. Again, ChoiceTrade and Zecco are still a better choice overall when it comes to the commissions on low priced penny stocks. See more details through the link below. Check out a full SogoTrade review here.
SogoTrade's contact info - Phone: 1-888-818-7646 | Web: www.SogoTrade.com
Bronze Level: These brokers have good service and features, but are priced quite high for penny stocks.
 Zecco® is an online broker that used to defy all others by offering FREE stock trades. Unfortunately Zecco has recently changed this policy, and they have also increased the commission on stock priced below $1 to $6.95 a trade. This is, however, a flat rate commission, meaning you can purchase or sell an unlimited number of shares with no extra fees. Zecco has been improving their website, trading interface, and features in the recent future. These improvements are the reasoning for the increased prices, and removal of the free trades. Unfortunately the improvements don't really help penny stock traders. Penny stock traders that have a Level 2 Provider already are looking for a simple, bare bones order entry interface... Something Zecco already had. If you are going to stay away from the very low priced 'sub-penny' stocks, and can keep your trades to 500,000 shares or less, ChoiceTrade is the way to go for simple, fast, bare-bones trade execution.
Zecco has NO minimum funding level, and a FOREX trading solution (through a separate Zecco Forex account).
NOTE: Zecco's pricing policy changed effective March 30th, 2011. Stocks and ETFs now have a commission of $4.95, or $6.95 if the equity is under $1.00 per share. Zecco is no longer offering free trades.
Further more, Zecco stated in an email sent 8/19/11 they will be passing settlement fees for Non-DTC securities on to the trader. These fees can be as much as $700 per trade. Without doing research on your own you will not know whether a stock is DTC eligible. For this reason we can no longer recommend trading penny stocks with Zecco.
Zecco's contact info - Phone: 1-909-657-6655 | Web: www.zecco.com
 TradeKing® is a respected deep discount broker that has been offering $4.95 stock trades for years now.. However, this price only applies to stocks trading at $1 or above. "TradeKing adds $0.01 per share on the entire order for stocks priced less than $1.00. Maximum commission per order not to exceed 5% of the trade value, with minimum commission of $4.95. Minimum investment of $100 per order in OTCBB and Pink Sheet stocks. TradeKing does not accept opening trades for stocks below $0.01 per share." This is quite expensive and restrictive and pretty much rules out penny stock trading unless the stocks are ~50 cents or greater, and won't even let you buy a sub-penny stocks. Because of this, you can do much better with another broker, and we cannot recommend trading penny stocks with TradeKing. Don't get us wrong, TradeKing is a great broker from what we have found in our research, it is simply not a viable option for penny stock trading.
TradeKing's contact info - Phone: 1-877-495-5464 | Web: www.tradeking.com
 ShareBuilder® is a relatively new, and unique online discount broker. Opening in 1999, ShareBuilder's CEO Jeff Seely made it his goal to let everyone participate in a market dominated by large brokerages. The ShareBuilder philosophy is based on three concepts: Discipline, Diversification, and Dollar Cost Averaging. ShareBuilder has merged with ING, and since has offered $9.95 real-time trades. What makes their service unique, however, is the Automatic Investment Plan. You can schedule dollar amount trades for Tuesday of every week and pay a commission of $4 or less. This is a nice feature for making longer term investments, allowing you to build your portfolio slowly and affordably.
The problem with Sharebuilder, when it comes to penny stocks, is that in addition to the base commission, a large order surcharge of $0.025 for each additional share over 1,000 shares will be incurred. The total commission (base commission + surcharge) is subject to a maximum of 2.5 percent of the principal, but no less than the base commission. This doesn't apply to automated investments, but you probably wouldn't be using the automated investment system to buy penny stocks either! The additional fees for trading low priced stocks are too outlandish for us to recommend Sharebuilder as a penny stock broker.
ShareBuilder's contact info - Phone: 1-800-747-2537 | Web: www.ShareBuilder.com
 Scottrade® is another inexpensive online broker. They charge $7 for both market and limit orders. There are no quarterly or annual fees, but there is a $500 minimum funding to open an account. The big issue with trading penny stocks with Scottrade is an additional fee for stocks under $1. In addition to the $7 commission, Scottrade charges an additional fee of 0.5% of the total stock value purchased. So if you spend $1000 on a stock, an additional $5 will be added to the $7 commission. For new investors trading small amounts, this won't be much of an issue. For larger trades, however, ChoiceTrade, Zecco, Fidelity, and TDAmeritrade are better options. Scottrade is also notorious in the penny stock community for restricting buy orders for specific penny stocks, or requiring the order to be called in. This issue, combined with the extra "Penny Stock Fees" make Scottrade a poor option as a penny stock broker. Check out a full Scottrade review here.
Scottrade's contact info - Phone: 1-800-619-7283 | Web: www.Scottrade.com
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