Penny stocks are the home of brilliant traders and gamblers, honest entrepreneurs and scammers, honest value driven penny stock brokers and broker pond scum. The dichotomy of risk and reward are the greatest in the penny stock investments. The siren call of huge returns brings many investors who are looking for fast riches.
Just because this niche draws some less than reputable types doesn’t mean you shouldn’t invest in it though as there are great reasons for trading and investing in micro caps. If you’re looking to get into penny stocks you just need to learn how to pick your penny stock broker wisely.
One of the important aspects of any type of online stock trading involves finding the best online stock broker for your needs. Keep in mind you may not want to use the same brokerage account for long term investments and penny stock trading because they are two very different types of investments. Choosing the right broker can help you save money and maybe even make more money.
There are full service brokers, discount brokers and a little of everything in between. As the name suggests full service brokers provide more tools and services, but these tools and services usually come with higher account fees or trading costs. Discount brokers are cheaper in terms of fees but they don’t offer much in the way of help. There are also options in between, that offer a few services without high fees. It is important to evaluate everything from fees, minimum balances and services provided as they all add up to create a good or not so good overall trading experience.
This guide will discuss ten of the top online brokers from big names, like Charles Schwab and Fidelity to lesser known players like MB Trading and Scottrade, offering a summary of the services provided, account fees, account minimums and trade fees. Continue reading