Choosing a penny stock broker is very important. Some brokers frown on penny stocks and give all sort of reasons why they do so. So, when choosing a penny stock broker there are a number of things you need to consider.
Don’t be put off trading in penny stocks just because your broker appears reluctant. They are sometimes deemed too speculative or has not having enough information available. And that may be true but that also is the reason people want to trade them.
You can pretty much forget about using a full service stock broker if you want to trade penny stocks. Their commissions are likely to be too high anyway.
The advent of online trading and online discount brokers has really opened up the market to the small trader of penny stocks but even here you still need to be selective.
A lot of brokers don’t want to deal with small accounts trading penny stocks as they make the most money from large and very active accounts. To put off penny stock traders, some stock brokers have fees that differ when trading low priced stocks. Also they may have ‘large order surcharges’ that kicks in with trades of more than 1,000 or 100,000 shares. (Note: the order does not have to be large in monetary terms.)
So, read the small print!
Look out for:-
- No minimum deposit
- Fees per trade below $10 (as low as you can find)
- No surcharge for ‘large’ (volume of shares) trades
- Fast execution
We’d recommend you specifically check with the broker on their policy towards penny stock trading before choosing a penny stock broker who is right for you.
Online brokers like www.zecco.com should be your first port of call.
Visit our sister site www.marketcapmania.com for full reviews of these online stock brokers.