best online trading platform for penny stocks

Trader Americo Brunetti works on the floor of the New York Stock Exchange The biggest, oldest, best-capitalized brokerage firms are less. These include stock trades terms, commissions, inactivity fees, customer service, trading tools, platform usability, tradable markets, market. Women now make up one in four of the platform's investors, up from 13% a year ago. In this new era of trading the so-called meme stock.

Best online trading platform for penny stocks -

5 Best Brokers for Stock Trading 2021

Best brokers for beginners

  1. TD Ameritrade
  2. Fidelity
  3. Robinhood

So you are new to investing, and you want to buy a share of Apple (AAPL), Tesla (TSLA), Facebook (FB), or similar. I remember the feeling. As a beginner, it can be pretty intimidating to get started stock trading. Don't worry though, once you place that first stock trade, it is off to the races. :)

Before you can open a brokerage account, fund it, and place your first trade, you have to choose a broker. For beginners, I always highly encourage focusing on education, ease of use, and research.

From that lens, hands down, TD Ameritrade is the best broker for beginners. Not only does TD Ameritrade offer the largest selection of education across any broker, but it is all gamified and completely interactive. With hundreds of in-house made videos covering every trading concept under the sun, you can track your progress, earn badges as you go, and even quiz yourself on what you learn along the way. On top of that, TD Ameritrade has its own broadcasting network, the TD Ameritrade Network, so you can watch TD Ameritrade experts live throughout the day as they analyze the market and run educational sessions.

TD Ameritrade Education Learning Center for Beginner Investors Screenshot
(Image with permission:

Behind TD Ameritrade, I consistently recommend Fidelity. Fidelity offers investors a one-two punch of terrific market research that is comprehensive and easy to use, alongside a large selection of educational courses covering the basics of stock trading and beyond. Out of all the brokers, Fidelity is also my favorite for retirement education, thanks to its Fidelity Viewpoints articles.

Fidelity Retirement Analysis Calculator
(Image with permission:

In third, it's close, but I usually recommend Robinhood. Robinhood's mobile app is so darn easy to use, and I LOVE the Robinhood Snacks daily newsletter, which is my absolute favorite daily market recap. The caveat to Robinhood is that there is little research offered, its educational materials are not nearly as comprehensive, and the app is designed to encourage "over trading" thanks to community-driven data. So, is Robinhood a good broker for beginners? Yes. But, is Robinhood the best broker for beginners? No, and it's not close. I put TD Ameritrade and Fidelity above Robinhood.

Best trading tools

  1. TD Ameritrade thinkorswim (desktop)
  2. TradeStation 10 (desktop)
  3. Fidelity Active Trader Pro (desktop)

To trade online successfully, some investors rely purely on their trading tools. Today’s trading platforms are not only web based, but also desktop based, and are becoming increasingly mobile based as well. Advanced charting, options tools, screeners, hotkeys, virtual trading, watch lists, ladders, Level II quotes, and back testing are just a sampling of the functionality brokers make available to their customers.

Over the years, I have learned it is not just the trading tools that separate brokers, but the design, depth, speed, and overall execution of delivering the ultimate trading experience.

This is where brokers such as TD Ameritrade’s thinkorswim and TradeStation really excel. After spending hundreds of hours on both desktop platforms, I give thinkorswim the edge, thanks to its modern feel and outstanding trader tools; however, both platforms execute so well that it truly comes down to personal preference. Die-hard fans exist for both, and either one is a great choice for seasoned traders.

TD Ameritrade thinkorswim Trading Platform Screenshot
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Behind thinkorswim and TradeStation, Fidelity's Active Trader Pro and Charles Schwab's StreetSmart Edge are two desktop platforms worth looking at closely. Active Trader Pro and StreetSmart Edge have one distinct advantage over thinkorswim and TradeStation, and that is ease of use. While these platforms do not offer the same depth of trading tools, historical data, chart studies, etc., both are very well designed and user-friendly. In some respects, their balance of power and design make them a better fit for certain traders.

Fidelity Active Trader Pro Desktop Platform
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Investors who prefer a web-focused experience have a choice of several great browser-based platforms. My top pick again this year, Power E*TRADE, combines the best of both worlds: ease of use with fantastic trading tools. The platform is just “ok” for stock trading, but is terrific for options trading.

Power E*TRADE Options Trading Snapshot Analysis
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Best mobile apps for stock trading

  1. TD Ameritrade
  2. Fidelity
  3. E*TRADE

While I am primarily a desktop trading platform guy, I do use my iPhone XS on the go, and I have a lot of friends that have Android phones. So, which broker offers the best stock trading app?

The answer is, it depends.

For me, I love conducting technical analysis on stock charts, customizing my watch list columns alongside flipping between multiple watch lists, setting price alerts, and occasionally streaming some video. I am an active trader, and I need my trading tools. For this reason, TD Ameritrade Mobile Trader is my top pick for mobile trading. For non-active traders, TD Ameritrade also offers a second app, TD Ameritrade Mobile, which is also excellent (I highly recommend the stock education videos!)

TD Ameritrade Mobile Trader Stock Chart for AAPL
(Image with permission:

Active trading aside, I am also an everyday investor who appreciates conducting stock research and reading quality market editorial. So next to TD Ameritrade, the second broker app I use most frequently is Fidelity Mobile. My absolute favorite feature with Fidelity's mobile app is the customizable dashboard, which is essentially a personalized feed, that you see upon login. Your personalized feed pulls all your portfolio holdings, watch list tickers, and account information into one streamlined view. From there, you launch straight into full-featured stock quotes or market analysis. It's awesome.

Fidelity Mobile Watch List for AAPL, AMZN, BAC, BIDU, CMG, CRM, CSCO, EFX, and FB
(Image with permission:

Last but not least, my third pick is E*TRADE, purely because its two apps are also easy to use and come stocked with features. Personally, when a friend asks me which stock trading app is best, I always recommend TD Ameritrade and Fidelity first because, at the same price of $0 per stock trade, they offer superior research. It is a better overall value.

Robinhood Mobile App Watch List for CHK, GRPN, ZNGA, AMD, SIRI, SNAP, and S
(Image with permission:

Best brokers for stock analysis

  1. Fidelity
  2. Charles Schwab
  3. TD Ameritrade

It is not surprising that the largest, most publicly known online brokers excel, and all vie for the top spot for research. With larger client bases and higher commission costs, high-quality research is expected.

Comparing apples with apples, all the top brokers use Morningstar as their primary provider for Exchange Traded Funds (ETF) and mutual fund research. They also all offer a slew of data and graphs for researching stocks, and all offer fixed-income research. Slight differences begin to show only when you assess specifics such as total third-party research reports available for equities, for example Apple (AAPL).

All in all, when it comes to researching stocks, ETFs, mutual funds, and fixed income, any top broker is going to provide an excellent experience for investors.

While any of these brokers will more than satisfy most investors’ appetites, deciding on a winner based on checklists alone is not enough. Quality and design matter just as much as quantity, not to mention the fact that many brokers will go “above and beyond” to differentiate themselves.

Fidelity, which earned my No. 1 spot again this year, stands out for its 12 equity research reports and fantastic stock comparisons, allowing customers to compare up to five stocks at once with 21 different metrics. Fidelity also distributes high-quality market analysis and personal finance education through its Fidelity Viewpoints weekly distribution. What excites me most about Fidelity is its fully responsive (mobile friendly), carefully laid out research area. Content flow and personalization are at the heart of the experience, which is unlike any other broker in the industry.

Fidelity Account Stock Quote for AAPL
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Charles Schwab, on the other hand, offers customers its own proprietary A – F ratings, called Schwab Equity Ratings, for some 3,000 US stocks. Even more impressive, Schwab boasts a full lineup of 26 in-house experts who provide numerous articles, known as Schwab Insights, on a variety of market topics throughout each week. Some experts, such as Chief Investment Strategist Liz Ann Sonders, can often be seen on TV discussing the market. Schwab also provides the best video experience out of all the brokers, thanks to its market updates and Schwab LIVE events.

Schwab Equity Rating Summary for Apple
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Not to be outdone, TD Ameritrade offers my personal favorite analytical tool, the earnings analysis tool (image below), offered on its thinkorswim platform. TD Ameritrade also offers what it calls Social Signals analysis for individual equities. Using proprietary algorithms, the Sentiment Score shows what percentage of tweets are positive and displays other relevant metrics. Additionally, in the social realm, TD Ameritrade analyzes data from its millions of retail customers to create what it calls the Investor Movement Index (IMX), which displays and analyzes the sentiment of its retail investors’ portfolios.

TD Ameritrade thinkorswim Earnings Analysis Tool Screenshot
(Image with permission:

Best brokers for investment products

  1. Interactive Brokers
  2. Merrill Edge
  3. Charles Schwab

Investing covers a global spectrum, from investing in international equities to trading forex to purchasing US treasury bonds. To understand the true range of offerings, you have to look at all the broad investment channels down to the specific order types provided by each broker.

Thanks to its focus on professional and institutional trading, Interactive Brokers takes the crown. Do you require advanced order types? Not a problem. Interactive Brokers offers customers an arsenal of 63 different order types. What about trading internationally? Easy. Interactive Brokers offers trading in 26 countries and over 120 market centers. The list goes on and on.

My second pick, Merrill Edge, stands out because its parent company is banking giant Bank of America, which offers checking accounts, savings accounts, debit cards, credit cards, and mortgages. With a Financial Solutions Advisor (FSA) located in over 2,000 branch offices out of a total of 4,000ish locations, Bank of America has, by far, the largest network.

And my third pick, Charles Schwab, is known for its leadership in retirement. Alongside self-directed investing, Charles Schwab provided a full lineup of financial advisor services. Schwab Intelligent Portfolios is Schwab's robo-advisor service that uses a diversified portfolio of ETFs to build, monitors, and rebalance your investment portfolio. You can then upgrade to Premium, which gives you access to a Certified Financial Planner (CFP) for $30 per month after a $300 one-time planning fee. I have tested numerous robo advisory services offered by the online brokers, and Schwab's my favorite one.

Tips for choosing an online brokerage

Having the best online broker to serve individual needs is very important for any investor. Consider these 12 key factors to help compare all stock brokers and ultimately find the best broker to suite your needs.

1. Trade commissions
What does it cost to buy shares of stock? Does the fee change based on the type of order or size of order? Fortunately, today, trade commissions are essentially a "thing of the past" as the majority of brokers now offer $0 stock and ETF trades.

2. Customer service
When picking up the phone or emailing a broker, is a well trained customer service representative ready to assist? How any investor is treated as a client is more important to some than others. But, even for those that don't rely on customer support that often, to know that they have award winning service there when they need it is comforting.

3. Trading tools
Trading successfully is a lot easier when investors have great tools at their disposal. A top stock broker should offer access to a wide variety of trade tools to help make the most of each and every trade. From real-time streaming quotes to last sale tickers, quality stock scanners, mobile trading apps, and level II quotes to name a few. Strong tools are essential for active investors.

4. Account minimums
Some brokers allow you to open an account with no minimum deposit while others may require several thousand dollars. Also know that some brokers require higher minimums to gain access to premium platforms, functionality, and personalized support.

5. Market research
A good online broker will provide a variety of market research tools. The rule of thumb here is simple: the more you pay per trade, the better the market research (both fundamental and technical) that is provided.

6. Investment options
A online stock broker should offer access to not only trading stocks, but also a strong selection of no load mutual funds, commission free ETFs, and complex options. Other unique investment offerings to look for could include direct market routing, conditional orders, futures trading, and forex trading.

7. Other fees
Fees beyond trade commissions include inactivity fees (common with active trading brokers such as Interactive Brokers, Lightspeed, and Cobra Trading) and IRA fees for having a retirement account. While most brokers do not charge predatory fees, it's still important to do your due diligence. Just like a bank account, stock brokers also make a portion of their revenue off miscellaneous fees.

8. Retirement accounts
Funding a IRA, Roth IRA, or other retirement account with no annual fees is an extra perk many online brokers offer. There is no reason why you should pay an annual fee to have an retirement account. If managing your own portfolio is not of interest, all full-service brokers offer optional advisory services as well. Once again, the experience at larger established brokers is going to be superior to smaller brokers.

9. Banking
Larger online brokers offer banking and other financial services. This goes beyond money market accounts and CDs. Checking accounts, mortgages, debit cards, and credit cards can also be offered. The leader in this space is, hands down, Bank of America, Merrill Edge.

10. Account security
Because of the web today, all online brokers invest heavily into account security. SSL websites (look for "https" at the beginning any URL) are used by most brokers and some are now even offering two-factor authentication (using your phone to confirm a code before logging in). Just like shopping online and choosing a trustworthy website to purchase from, the best bet is to choose a well-known, established broker for your portfolio.

11. Speed & order execution
For the active trader, execution speed and fill price are very important. I won't get too in depth here but I have tested many of these brokers and there can be noticeable differences in trade execution times and quality. For the majority of investors, saving a penny per share on a 100 shares order isn't the end of the world, but for active traders it is something to look into. To understand Order Execution, read this guide.

12. International trading
For investors in the U.S., this is not a problem; but for investors living outside the U.S., it’s important to verify brokers offer service in your country. Here's a good list of international brokers to start with. If you’re in the U.K., check out our guide to the best U.K. brokers.

Best stock brokers summary

Feature TD AmeritradeTradeStationFidelity
Recommended For Overall Day Trading Research
Minimum Deposit $0 $0 $0
Stock Trades $0 $0 $0
Options (Per Contract) $0.65 $0.50 $0.65
Overall Rating 545

Questions & help choosing a broker

If you need help deciding which broker to choose or have a broker specific question please feel free to email me and I will be happy to help.

Also, if you feel this guide was helpful for you please share it on Twitter, Facebook, Linkedin, or email it to a friend. This took many dozens of hours to put together so I appreciate your support!

* - The 2021 Online Broker Review included 15 brokers whom were each assessed within eight core categories: Commissions & Fees, Customer Service, Platforms & Tools, Research, Ease-of-Use, Offering of Investments, Education, and Mobile Trading.

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About the Author

Blain Reinkensmeyer

Blain Reinkensmeyer As Head of Research, Blain Reinkensmeyer has 18 years of trading experience with over 1,000 trades placed during that time. Referenced as a leading expert on the US online brokerage industry, Blain has been quoted in The New York Times, Forbes, and the Chicago Tribune, among others.

Glenview, IL 60025

The information on this web site is for discussion and information purposes only. All accounts accepted at the discretion of eOption which accepts customer orders only on an unsolicited basis, and does not make any recommendations regarding any security or securities product with the possible exception of orders executed by our full service bond desk. Nothing contained herein should be considered as an offer to buy or sell any security or securities product. Online trading has inherent risks due to loss of online services or delays from system performance, risk parameters, market conditions, and erroneous or unavailable market data.

FINRA BrokerCheck reports for Regal Securities and its investment professionals are available at

Options Disclosure: Options involve risk and are not suitable for all investors. Prior to trading options, you must be approved for options trading and read the Characteristics and Risks of Standardized Options. A copy may also be requested via email at [email protected] or via mail to eOption, 950 Milwaukee Ave., Ste. 102, Glenview, IL 60025. Online trading has inherent risks due to loss of online services or delays from system performance, risk parameters, market conditions, and erroneous or unavailable market data.

eOption Commissions: Broker-assisted orders are an additional $6. Option strategies involve multiple purchases; therefore your transaction costs may be significant for option strategy trades. A commission rate of $2.00 for equities and $3.99 + $.10/contract for options, per execution, applies to orders entered and filled by eOption's Auto Trade Desk and does not apply to customers who enter their trades directly into the eOption platform and are not utilizing the Auto Trade desk.

Broker Comparison: The competitor rates from published websites were verified on 9/1/2021 and are believed to be accurate, but not guaranteed. Commissions are subject to change without notice. At some firms, commissions may not reflect broker-assisted fees, orders over 1,000 shares, penny stock trades, OTCBB, pink sheet stocks or foreign stock orders. Firms may offer reduced commissions if additional criteria are met.

Blog & Commentary: eOption is neither affiliated with, sponsored by, nor endorses commentary and the opinions expressed are solely their own. Content is provided for educational and informational purposes only and eOption cannot attest to its accuracy or completeness. No information provided has been endorsed by and does not constitute a recommendation by eOption to buy or sell a particular investment. You are solely responsible for your own investment decisions, and eOption makes no investment recommendations and does not provide financial, tax or legal advice.

Important Disclosures

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One of the most iconic and coveted investment careers is that of the stock broker. The job has come to symbolize Wall Street itself and even those with little or no investing experience know what a stock broker does for a living.

Stock brokers are basically Wall Street middleman: buying and selling stocks on behalf of investors, collecting a commission for each transaction.

But stock brokers are slowly becoming a dying breed. Thanks to the Internet, passive investing and automation, investors are now capable of doing themselves what brokers have traditionally charged them to do.

Today, those looking to grow their wealth or diversify their portfolio can take advantage of online stock brokers. Whether you’re new to investing or a seasoned investor, you can use this guide to learn or brush up your skills on how to trade stocks online. For a fuller understanding of online stock trading, read end to end. Or, navigate to a section of your choice using the list below.

What Are Online Stock Brokers?

An online stock broker is a platform run by a brokerage firm that allows investors to buy, sell, and trade assets like stocks, bonds, and mutual funds. Previously, stock brokers were real people working as trading representatives, buying and selling shares on behalf of their clients. However, technology reinvented the investing world, allowing anyone with a computer and funds to trade stocks right from the comfort of their home.

If you’re new to investing, you may be wondering, “what’s a stock?” Simply put, a stock is a type of security that gives investors partial ownership in a company. Stocks are bought on an exchange, such as the New York Stock Exchange, and give stockholders a direct stake in a company. Investing in stocks can be a great way for investors to build and diversify their portfolio and buy shares of companies they think will perform well.

By using a stock brokerage online, investors can now invest in stocks on their own without having to pay the typical brokerage fee and commission that in-person stock brokers charge, which leads to our next question—how do online stock brokers make money? 

How Do Online Stock Brokers Make Money?

On October 1, 2019, brokerage firm Charles Schwab announced it would charge $0 commission-free online trading for U.S. stocks, options, and exchange-traded funds (ETFs). This announcement started a price war with its competitors, resulting in other large brokerage firms, such as T.D. Ameritrade and E-Trade, to slash their online trading to $0 as well. Investors then became panicked, resulting in shares in these companies to fall drastically.

So, why did online brokerage firms decide to eliminate a source of revenue? Because they found offering free commissions on trades can draw in more customers to their platforms. Charles Schwab, for example, also offers banking services. With more customers coming to use their free online trading platform, they may be enticed to use Charles Schwab as their bank. In fact, 61 percent of Charles Schwab’s revenue (as of 2019) comes from their banking services.

How Do Online Brokerage Accounts Work?

In order to buy stocks, bonds, or mutual funds, you need to need to work with a stockbroker and open up a brokerage account. Through an online stock broker, you will open an investment account to store your cash that will be used to buy and sell stocks and other securities. Whether you’re investing in penny stocks or looking for AI investments, there are numerous securities you can invest in with an online brokerage account.

In order to gain access to an online brokerage account, you will need to create an account with an online broker of your choice. There are plenty of online brokerages to choose from, so make sure to do your research to ensure you choose the right online broker for you, which we’ll discuss later on in this post.

Once you open an account with an online broker, you will be able to access any of the financial exchanges your online broker is a member of, such as the New York Stock Exchange or NASDAQ. Your online stock broker will then be able to act as the intermediary to make trades on your behalf.

What Type of Trading Tools Do Online Brokers Offer?

One of the reasons online brokers are so affordable compared to in-house stock brokers is that they often have fewer tools, requiring online investors to research stocks on their own and decide what stocks are worth buying and selling. However, depending on the online stock broker you choose, you may have access to certain tools. Some trading tools online brokers might offer include:

  • Automated investing technology
  • Access to financial planners for long-term investment planning or account management
  • Portfolio management software
  • Tax optimization
  • Automatic rebalancing

For investors looking for a more hands-off approach, online stock brokers might be your best bet. Their high-tech services and software can do a lot of the work for you with little to no human interaction. However, if you’re looking for a more personal investing experience, working with an in-house stock broker will allow you to establish a more direct relationship with a financial advisor that can be beneficial for more complex financial situations.

Are Online Stock Brokers Safe?

Generally speaking, online stock brokers are safe. Most online stock brokers add heightened security measures, such as encryption, cookies, and other safety protocols, to keep the funds in your account safe and secured. These measures make it difficult for cybercriminals to hack into their system and steal any funds. Always make sure you review your online stock broker’s protection measures and how they use encryption and cookies to protect your account.

One thing to keep in mind is that online stock brokers won’t protect you if you make a bad investment. For example, if you invest in a stock that loses value over time, online brokers aren’t responsible for money lost from a bad decision. However, the Securities Investor Protection Corporation (SIPC) does protect you in the event your brokerage firm fails. If your online brokerage firm is a member of the SIPC, they will protect up to $500,000 per account, with a $250,000 cash limit.

What Should I Consider When Choosing an Online Stock Broker?

As with any financial decision, it’s important to do your research to know what you’re getting into. Not every online stock broker is the same, which is why you should take note of key factors when choosing an online stock broker. Some factors to look for include:

  • Customer service: When you’re using an online trading platform, you might run into issues or have questions. With that said, you’re going to want to choose an online stock broker known for high-quality customer service. This way, you can get any issues fixed, whether it’s something concerning a trade or your brokerage account when you need it. To determine whether an online stock broker is customer-friendly, look at online reviews from current or previous members, and look for customer-friendly features on their trading app and website.
  • Price: If you’re like most investors, you don’t want a large chunk of your money going toward expensive fees and commissions. Fortunately, most online stock brokers are extremely affordable, with most offering $0 commissions. Before you sign with an online stock broker, compare their fees and trading costs with other online stock brokers.
  • Resources: Compared to in-house stock brokers, online stock brokers often offer fewer broker resources. However, this doesn’t mean you’re left high and dry. When choosing an online stock broker, make a list of all the resources they offer, such as research tools, the digital trading app’s functionality, and how easy it is to place trades.
  • Support: Depending on your investing experience, you may need to consider the amount of support an online stock broker provides. Because online brokers offer no assistance when it comes to buying and selling stocks, you’ll need to consider online stock brokers that offer robust research and trading tools, along with premier customer services, so you can make informed investing decisions.

What Are the Best Online Brokers?

Now that you know about online stock trading, you may be wondering what online stock brokers are the best. According to blackwallet, a financial literacy site, these are some of the best stock brokers online:

  • E*Trade: This is an online platform that allows you to trade a wide range of securities, including common stocks, preferred stocks, ETFs, options, mutual funds, fixed-income investments, and futures contracts. This platform is great for beginner and experienced investors alike, and offers data and research, retirement planning, and commission-free ETFs.
  • Robinhood: This is a free trading app you can download on your smartphone to trade stocks, cryptocurrency, ETFs, and options without paying commissions for fees. The mobile and web app both offer basic trading functionality, which is great for beginner investors.
  • Stash: This is another investment app that works well for those just starting to invest. Through this app, users can choose investments like stocks and ETFs and receive guidance when selecting their investments.
  • Charles Schwab: For new and experienced investors, Charles Schwab can be a great online trading platform. Charles Schwab caters to a wide range of investors and offers a great selection of tools for users to take advantage of.

Before choosing an online trading platform, make sure to do your research and consider the services, tools, and research options each platform offers.

The Bottom Line

Online stock brokers provide an easy and accessible way to invest in stocks, bonds, ETFs, and other securities. Compared to in-house stock brokers and financial advisors, online stock brokers are much more affordable, giving more people access to the investing world. The trade-off, however, is that investors need to conduct their own research when it comes time to buy, sell, and trade securities. With the right online stock broker, you can gain access to research tools and other services to help you make better-informed decisions. At Mint, you can take advantage of our free investment calculator, which can help you create investment goals and determine ways you can diversify your portfolio.




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Best Penny Stock Trading Apps

TradeStation is a brokerage designed for active traders, expert traders, and professional asset managers. It also offers a platform ideal for many penny stock traders. Both the TS Select and TS Go accounts are commission-free for stock trades made on mobile devices. However, TS Go clients will pay $10 per stock trade through TradeStation’s desktop platform. Most penny stock traders will want to go with a TS Select account, which includes access to mobile and desktop trading at no additional charge.

TS Select accounts require at least a $2,000 balance to get started. Commission-free trading applies to up to 10,000 shares per trade. Beyond that, you’ll pay $0.005 per share.

For traders happy with that pricing scheme, the TradeStation apps offer institution-level quality, free access to valuable data feeds, and a mobile experience that puts the power of many desktop apps in your pocket. This combination of tools allows you to do fast research and enter trades in just a few seconds with access to some of the best live-data available to any trader. For thin-margin penny stock trades, that could be the difference between losses and profits.

  • Account minimum: $2,000 for TS Select accounts, $0 for TS Go accounts
  • Account fees: $0
  • Mobile stock trade commission: $0 ($10 desktop trades for TS Go accounts)
What We Like
  • Professional-quality trading platforms for desktop and mobile

  • Included access to advanced data feeds

  • Two account types

What We Don't Like
  • TS Select desktop app charges fees if less than $2,000 minimum balance

  • Fees for stock trades over 10,000 shares

  • $10 commission for TS Go desktop trades


8 Best Brokers for Penny Stock Trading of December 2021

Penny stocks are risky investments, though they don’t actually cost a penny. They are shares of small companies — also known as microcap stocks — that trade outside of major stock exchanges, and brokerages may charge additional fees to trade these often volatile shares.

Some brokers add a surcharge to stocks that are valued at less than a certain dollar amount, or don't extend their free commission offers to unlisted stocks. The definition of penny stocks will also vary by broker. Some consider anything trading under $5 to be a penny stock, while others put the cutoff at $2 or $1.

For the purposes of this roundup, we limited our selection only to brokerages that give traders full access to over-the-counter (OTC) stocks on the OTC Bulletin Board.  (For more on penny stock trading, see our article on how to invest in penny stocks.)

Penny stocks may seem like a steal when stacked against companies that trade for $500 or more. This is where the backstory is important: These stocks are cheap for a reason. Because they are issued by small, yet-to-be-established companies, penny stock values can be turbulent. They are often hard to research and accurately value, and they trade infrequently, which means they can be tough to sell.

Because of less stringent financial disclosure requirements, penny stocks are more susceptible to “pump and dump” schemes, where traders talk up the value of a stock only to “dump” it at artificially inflated prices. (In an effort to discourage this practice, the  U.S. Securities and Exchange Commission issued new rules in September 2020 to prevent brokers from quoting OTC stocks unless companies issuing shares release up-to-date financial information.)

Bottom line, there are plenty of other ways to expose your portfolio to stocks without ponying up a high share price — here are a few suggestions.

Choosing a penny stock broker

In case the above didn’t make this clear: NerdWallet does not recommend taking on the risks that come with trading penny stocks unless you are a sophisticated investor and you understand this market. You'll also want to be aware of the following when selecting an online broker to trade penny stocks:

Volume restrictions: Besides trade surcharges, there may be volume restrictions. Some, such as Fidelity or Firstrade, offer unlimited shares without additional fees, but a few charge more for large orders. For example, TradeStation's $0 commission applies to trades of 10,000 shares or less. Some brokers also limit the number of penny stock shares you can trade in one order or in one day, slowing your ability to trade and forcing you to pay another commission for a second order.

Trading restrictions: Watch out for firms that require you to trade penny stocks by placing a phone order or that impose limits on the types of trades you can execute. Ideally, your penny stock broker will allow you to trade penny stocks with the same online platform used for other stock trades.

Below are NerdWallet’s top brokerages for penny stock traders. You'll notice that many of these brokers also appear on our list of the top online brokers for stock trading; they're all well-rounded brokers that also offer a uniquely strong suite of features for penny stock trading.

best online trading platform for penny stocks

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