Penny Stock Brokers 4u

Knowing where to buy penny stocks is one of the first things an investor will need to know before entering the world of this mostly risky investment endeavor.  While some penny stocks trade on the major stock exchanges such as the NYSE and NASDAQ, many trade on the pink sheets or the over-the-counter bulletin board (OTCBB). Regardless of where the stocks are traded, an investor will need to go through a broker to affect trades.

There are a number of brokers – mostly discount brokers, but also some full-service brokers – that provide penny stock investment services through websites thus enabling the investor that wishes to completely manage their penny stock portfolio to do so. Thus, to answer the question, “Where Can I Purchase Penny Stocks Online?” one simply has to review the various brokers that will come up during an online search.

Each of the various online brokerages offers different advantages and disadvantages, so it will be a matter of reviewing them to determine which works best for you.  They will differ in a number of areas including the following:

• Fees – Some will have more fees than others, some of the ones to look for are:
  • Inactivity fees
  • Large order fees
  • Low price stock fees
  • Quarterly or Annual fees
  • Report fees
• Commissions – These can be structured in many different ways, such as the following:
  • Flat rate per transaction, usually the same buy or sell but can be different
  • Free with minimum balance or minimum or maximum number of transactions
  • Sliding rate based on number of shares in transaction
  • Sliding rate based on total value of the transaction
  • Limited number of free transactions per period followed by flat or variable structure
  • Free for a trial period, followed by flat or variable structure
• Website – No two websites are the same; look for one that is easy to use and runs smoothly. Look also at the various tools available for your use.
• Reliability – Some are rarely unavailable while others seem to be “under maintenance” more often.
• Quotes – Can be delayed or real time.
• Minimum Balance – Each has its own minimum they require an investor to have in order to set up an account with them. Some can be quite low while others are quite high; though that is not to say the entire account needs to be invested in penny stocks. It can also be a combination of other stocks, mutual funds and other investments.
• Transaction Window – Are orders placed immediately, with a specific delay, in groups throughout the day, or all at one time at the end of the day?  And, if orders are delayed, at what time is the price locked in for your transaction. Orders placed quickly is usually preferable.
• Level of Assistance – Even a discount broker may have available the ability to make certain transactions with the assistance of a broker for an additional fee. In any case, you will want a brokerage that responds to questions timely.

Now that you know a few of the things to look for in a penny stock broker, let’s look at a few of the brokerages that have online access for their account holders. Below are just a few of the ones available. They are not listed in any particular order.

• Zecco. They offer two types of accounts; one of which has a low per-transaction fee while the other allows for 10 free trades per month as long as you have at least $25,000 in your account.
• Scottrade. This brokerage has a low minimum balance (just $500) and does not charge inactivity nor maintenance fees.
• Choicetrade. Flat commission per trade with no separate charges for penny stock transactions.
• TDAmeritrade. Besides their online trading option, they also offer a telephone order system and broker-assisted trading.
• E*Trade. Has a lower fee for accounts with more than 150 trades per quarter.
• LowTrades. One of the few that has a free trial period.
• SogoTrade. One of the lowest flat rate commissions out there, currently just $3 per trade and they occasionally run special offers to sweeten the pot, such as 100 free trades when you open a new account and 25 more when you refer a friend.
• ShareBuilder.  They offer three different plans: Basic, Standard and Advantage and encourage automatic investments to build your portfolio as you go. They are currently offering a free trial.

Once you have chosen the right broker for you things will go more smoothly for investing in penny stocks. Even though it will be less expensive to use a discount broker, at least at first you may want to consider a full-service broker so that you can learn the ropes from them. Additionally, you should do as much reading as possible on the subject – there are a number of books available as well as online sources, newsletters and forums to talk with others that invest in penny stocks.

It can sometimes feel like you are swimming with sharks, but the more you know the more you can safeguard your investments.  Two important pieces of advice: start slow and don’t get greedy.  If you start with small investments at first you won’t learn a rough lesson with a large chunk of your portfolio. And many an investor has held on to a stock that has already provided the return they had hoped for yet got greedy and held out for that really big payout only to have to have the value slip back and never get back to where they should have sold it.  It is far better to take your profit and move on to something else.  In fact, there are even programs being touted by the experts that show you how to keep your money moving from stock to stock to take advantage of the high point of each one.