When trading penny stocks, fees and margins are even more important than with larger stocks — when each share is so low-value, a big fee can take a larger percentage of your trade. That is why Robinhood, which charges no fees or commissions for stock trades, is the best value for trading and stocks, particularly low cost ones.
Note that Robinhood does not support the Pink Sheets or over-the-counter stocks; it only ties into major exchanges. This makes the number of penny stock investment opportunities a bit more limited, but you can’t beat the lack of fees!
Even if you need to use another penny stock trading app to reach the farthest corners of the market, adding Robinhood to the mix just to save on fees makes a lot of sense for most penny stock investors. Just beware that this app is mobile-only at this point — there is no web interface available.
Interactive Brokers offers fixed-rate plans with a flat rate per share, or a tiered plan that has fees but charges lower commissions. Tiered plans are better for high volume traders, while fixed-rate plans are better for everyone else.
With fixed-rate, you will pay .005 cents per share with a minimum $1 per order and maximum 0.5% of the trade value. International shares have different rates. Depending on how you trade, this could be cheaper than any other broker on this list (aside from Robinhood). But Interactive Brokers offers far more trading options, which makes it more attractive depending on your needs.
If you are into penny stocks, you might be interested in a huge range of trading options ranging from commodities to foreign exchange. Interactive Brokers offers more trading options than many other brokerages, and its online trading platform isn’t too shabby either.
TradeStation offers $5 stock trades, which puts it in the camp of low-cost brokerages. Beware that some fees can add up on top of commissions, plus there is a $5 fee per month that lets you access OTC data. But if you’re willing to pay those fees, you get access to a high-end browser, desktop, and mobile experience.
If you don’t want to pay the flat-rate $5 trade fee, you can use per-share pricing starting at one cent per share and unbundled pricing as low as .002 cents per share. Per-share pricing is best for frequent traders who trade just a small number of shares, while unbundled is better for high volume traders.
The desktop version was ranked #1 in Barrons for 2017. It works great right out of the box and integrates with a wide range of plugins and trading apps. The desktop platform is only available for Windows 7 and higher. There is no support for Mac unless you want to add some complexity with a tool like Parallels Desktop, which lets you run Windows apps on a Mac.
Most of the big online stock brokers give you access to a huge variety of stocks. Schwab sets itself apart by being among the leaders in low cost, with a $4.95 commission when you buy or sell. While this fee is higher than the free cost of trading at Robinhood, Schwab gives you access to Over the Counter Bulletin Board (OTCBB) and even some pink sheet stocks online.
Schwab has highly-rated customer service and generally makes it easy to reach a human on the other end of the phone. Its mobile app and website dashboards are regularly updated with new and useful features.
Schwab is also noteworthy for its various trading platforms. It offers a desktop application, web, and mobile trading experience with some flexibility in configuration. The top-of-the-line option is StreetSmart Edge, a desktop program for Windows (the Cloud edition of the program works for users of any operating system). This is a must for active traders.
Among major brokerages, TD Ameritrade’s famed "thinkorswim" trading platform brings you high-level trading tools that look more like something from a Bloomberg terminal than a consumer trading app. Thinkorswim offers 24-hour trading five days a week for eligible securities, which makes the trading experience a bit more exciting.
Thinkorswim offers advanced trades including bracket and OCO (one-cancels-the-other) trades. The platform offers tons of technicals, live cable news feeds, and extensive market monitoring tools.
TD Ameritrade is a lower price platform, but not the cheapest around. Trades are $6.95 for stocks. If you are willing to pay a bit more for that platform, TD Ameritrade is a good choice. Otherwise, you might pick a lower cost platform to save a few bucks each time you trade.
E-Trade offers $6.95 trades, putting it squarely in the discount club but not at the bottom of the barrel in terms of stock trade fees. However, if you trade more than 30 times per quarter, that fee drops to $4.95, making it an on-par option for pricing with Schwab and Fidelity.
E-Trade has a top-notch trading platform with web, desktop, and mobile versions available. Active traders will want to be on the desktop, and E-Trade’s platform has advanced chart features with a wide range of technical indicators and trading ladders with streaming prices.
Casual traders can save a lot looking elsewhere, but active traders with more than 10 trades per month (to reach 30 per quarter) can find a sweet spot with lower cost trades and access to the E-Trade platform. If you are active and into E-Trade’s tools, you won’t go wrong with this penny stock trading app.
Fidelity offers $4.95 trades, which places it among the lowest-cost brokerages for stock trading. Fidelity offers many of the benefits of Schwab, but goes a step further to protect risk-averse investors. Before you can begin trading in the penny stock markets, you have to call in and talk with a Fidelity representative about the risks. After that, you can access a wide range of OTC and pink sheets which are available to trade with no surcharges.
Fidelity has great customer service and offers a wide range of accounts. It is known for its own funds, which include an OCT Portfolio mutual fund (FOCPX). So clearly Fidelity has spent some time thinking about OTC and pink sheet stocks.
It's also worth noting that if you are particularly risk-averse, penny stocks (in general) may not be for you.
The 7 Best Penny Stock Trading Apps of 2019
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Penny stocks are ultra-low-cost stocks that you can buy and sell for less than one dollar per share. This means they are often bought and sold in high volumes, and while this kind of stock may look “cheap,” do keep in mind that penny stocks are high risk and are not usually considered part of a well-balanced investment portfolio. But if you are undeterred by the risk and want to get into the penny stocks game for yourself, these penny stock trading apps provide an easy and convenient way to trade from your computer or mobile device. In this case, an app can be a great way to get started or to help you reach the next level of penny stock trading.