Investigate Penny Stockbrokers

Here I will tell you the basics of how to start researching penny stock brokers. You should have some basic facts about each penny stock broker before making a decision. Everyone’s situation can be different, so I can’t just tell you a simple place to go for your stock brokerage needs.

A penny stock broker is basically like any other broker with one caveat: they allow or are willing to execute penny stock trades. Some brokers just don’t want to participate in penny stocks. Some will execute penny stock trades for you, but at a higher cost than standard trades. Some will help you trade penny stocks, but only if you trade in large volumes. Some offer discounts for higher volume transactions and those discounts are almost necessary as transactions are prohibitively expensive otherwise.

There are some basics to keep in mind when considering penny stock brokers. What minimum balance do they require and can you comfortably maintain that balance? Does the broker have an annual fee? Are there conditions that may result in annual fees (such as being an inactive merchant for a period of time, such as a month)?

How much do you charge per order and specifically how much do you charge for penny stock related orders? How do charges change based on order volume (either the volume of shares per order or the volume of shares ordered over a period of time)? Of course, the most important question to ask yourself is how they handle orders or securities listed on OTC listing services like Pink Sheets and OTCBB.

What kind of research tools and resources are provided? You will pay more per order and generally for services with strong research tools and investment services, but sometimes they are worth it. Some reputable small-cap stock brokers to start with include: MB Trading, E*Trade, Zecco, Sharebuilder. However, these are only a small sample. Please note that these are all established and well-known brokers.

You don’t want to choose someone who is trying to independently sell you their services. There are plenty of sharks in the online stock trading business; Stick with well-known stockbrokers when entering the precarious micro-cap trading market.

I hope this helps you start your search for penny stock brokers.

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