5 Best Brokers for Penny Stock Trading 2021

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Investing in penny stocks can be risky.

However, you CAN potentially go into trading with a small investment, and later go on to make a large fortune.

It’s important to do your due diligence and also find a broker that fits your style of trading.

Here is a list in no particular order of the brokers/trading platforms that we would advise towards:

        1. TD Ameritrade
        2. Charles Schwab
        3. Fidelity
        4. E*Trade
        5. TradeStation

    What Exactly Is A Penny Stock?

    A penny stock is typically known as a share of a company with a price traded under $5. The phrase penny stock is also somewhat of a “catch-all” term used for several types of speculative stock investments.

    Penny stocks are not listed on standard stock exchanges like the NASDAQ, and instead are traded through a different method known as Over The Counter (OTC). The fact that most penny stocks are such a low price make them appealing for investors because one can buy a high volume of shares for a small investment.

    TD Ameritrade

    Pros

  • Large selection in investments.
  • No minimum account balance.
  • Features for beginner and advanced traders.
  • Paper trading features.
  • Numerous amount of charting features.
  • Cons
  • A lot of confusing options when setting up accounts
  • Discourages shorting (not recommended for new investors).
  • Charles Schwab

    Pros

  • Outstanding sources for research
  • Free stock and ETF trading
  • No withdrawal fees
  • Provided with demo account
  • Robust stock screeners
  • Cons
  • Uninvested cash is not automatically “swept” into a money market fund
  • Navigation is sometimes confusing
  • Fidelity

    Pros

  • Strong customer service providers.
  • High quality mobile app for trading.
  • Equity Summary Scores provided (consolidation of ratings from research providers).
  • Provides information on retirement savings.
  • Cons
  • Fidelity Go accounts cost more for higher account balances.
  • Trades assisted by representatives are slightly more expensive.
  • E*Trade

    Pros

  • User friendly tools.
  • More advanced mobile app than other platforms.
  • Commision-free stock and options.
  • 24/7 live chat and support.
  • Cons
  • $500 minimum for automatic management of investments.
  • Investors that are not active pay more for options.
  • TradeStation

    Pros

  • No platform fees.
  • Sleek design for mobile and website platform.
  • No account minimum
  • High quality trading tools.
  • Cons
  • Poor customer service ratings.
  • No real-time support.
  • Trading fees based on commision, financing rates, and conversion.

What do those letters mean? UCLE? BLONF?
These are called stock tickers, or ticker symbols. Instead of seeing the full company name
listed, ticker symbols allow a public company to be recognized by a shorter, more concise
listing within the stock market, such as UCLE being the ticker symbol for the company
US Nuclear Corp. Spotify’s stock is titled SPOT and WFC for Wells Fargo. When one of
these ticker symbols ends with “F” with five symbols, it is considered foreign. When it
ends in an “E,” it is considered delinquent. When it ends in a “Q,” it means that the
company is bankrupt.

What does OTC even mean?:
When you see the phrase OTC thrown around, people are referring to over the counter
trading; all trading within the OTC markets is done on a decentralized system-meaning
that trading/buying is done entirely electronically through various brokers-and therefore
can be done anytime and anywhere. The OTC market typically consists of unlisted, micro
cap companies-or penny stocks-such as OTCQX, OTCQB, and the OTC Pink, (all of
which can be found on our homepage).

OTC Pink? OTCQB? OTCQX?
These letters look like a foreign language to those of us who are only starting to learn
about the stock market, but it’s actually quite simple. Starting with OTC Pink, the bottom
tier of these three marketplaces: OTC Pink refers to a marketplace within the OTC
markets that does not require disclosures, meaning that the companies in the OTC Pink
marketplace are often in poorer or riskier financial standing. From here, we go on to OTCQB, the second tier of these three marketplaces within the OTC markets.

OTCQB includes the early-on companies and penny stocks, and, unlike OTC Pink, within the
OTCQB companies are required to hold up to certain professional standings such as full
financial disclosure and lack of bankruptcy. OTCQX, finally, refers to the highest quality
tier of the three; OTCQX requires firm qualifications that provide full transparency. This
marketplace, essentially, displays the outstanding companies that are in good financial
standing, thus the top tier.

Navigating Stock Market Twitter:
1. Instead of a hashtag like the rest of us are used to, when we refer to a specific
company’s ticker symbol in a tweet we use a $ in front of it. You’ll see this quite
often.
2. DD= due diligence (a study of risk regarding a company/decision).
3. SP= share price (simple, right?)
4. PT= price target
5. OS= outstanding shares
6. AS= authorized shares
7. MM= market makers (a party who defines bids and offers).
8. PR= press release
9. MA= moving average (a constantly updated average price for a stock, thus
moving).

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