Penny stocks are risky investments even though they cost pennies. There are many ways to decrease that risk, and one of them would be finding an online stock broker that can assist with your investments strategy. A good investment broker will maximize your trade, especially if you are a day trader. However, when it’s about choosing a finance broker, the internet is flooded with options.
In today’s post, we have shared how to choose a reliable online stockbroker.
Bonus: We have also shared leading online stock brokers for beginners that you can consider choosing from.
Let’s start with the tips first:
Tips To Select A Penny Stock Broker:
- The first thing to check about an online stock broker is its fee structure. Ensure it does not charge for any unnecessary expenses like fees for customer care support, etc.
- Choose a stock broker who does not charge high commissions and also does not ask for a minimum balance to open an account.
- Your broker should provide you with helpful and easy to use tools such as interactive charts and price alerts.
- Many people make the mistake of having more than one broker for managing multiple assets. Avoid making the same mistake and choose a broker who can manage all your assets together.
- Security is something that every investor expects from their online broker. That’s why before investing in any online stock broker platform, make sure to check how secure and safe it is to operate.
- Checking the maintenance fees is also an important point. The cost of maintaining your brokerage account can increase over time. And it will eat all your potential profits without even you knowing about it. That’s why it’s important to check how much maintenance fees the broker charges and if they will increase them with time or not. If yes, then how much?
- Some penny stock brokers have a policy where you can make only a specific number of trades every month or day. In case, you don’t meet their minimums, you will be charged with additional penalty fees. So whether you trade frequently or not, make sure you avoid such brokers.
- Some brokers might charge you for withdrawing your own money. That’s why it’s important for you to check the broker’s policy on transferring funds from a trading account to a bank account. Avoid such brokers or choose the one with minimum charges.
Top Online Stock Brokers For Beginners
To make your search for a reliable penny stock broker easier, we have already shortlisted the top 3 brokers (recommended by Timothy Sykes, a renowned penny stock trader and self-made 22 YO millionaire) that align with the above tips. Here are they:
- TD Ameritrade
It’s one of the most popular and well-known online broker platforms across the world. It doesn’t charge any subscription fees, which is great. In addition, no minimum cash deposit is required for creating an account.
E-trade charges a commission fee of around $6.95(it can change depending upon the platform) per trade. When it comes to the user interface, both TD Ameritrade and ETrade are good competition. Although, for small trades, this platform is more ideal for you.
- Interactive Brokers
If you plan to work with a company with tons of assets, then this platform is a perfect choice. An account holder needs to deposit at least $10,000 to start trading. Moreover, they also have to maintain a minimum balance of $2,000 in their trading accounts.
Penny Stocks can play a role in every trader’s portfolio. There are penny stocks trading rules and strategies that are important to learn before starting to trade any.
While you are searching for a penny stockbroker, make sure to keep the above tips in mind, they will help you make the right choice.
There are also online platforms where you can watch videos and tutorials such as StocksToTrade where you can learn the basics of how to trade stocks.
Other than that, do check out the website of the brokers we have suggested in this post. Finding a reliable broker might take a while, we hope that the tips mentioned above would help you choose the right one for you.