Which are the best penny stock brokers? The right broker broker will help execute your strategy successfully. For example, some brokers have excellent execution for OTC stocks however poor borrows. Some brokers located offshore that circumvent the pattern day trader rule. I can only speak for the brokers I have used as well as verified reviews by people I trust.
Some brokers only cater to US residents, being based in Europe I have not been able to use them nor comment on them (namely E*Trade, ThinkorSwim). I have heard good things about ThinkorSwim however it’s a non-starter in my situation.
Best 2 penny stock brokers
1. Interactive Brokers
IB are one of the best best penny stock brokers. They have excellent commissions, execution and decent borrows. However one downside is their customer service, which can be quite lacking. I have been using them for a short time and can happily recommend IB. Their software, TWS (TraderWorkStation), can have a steep learning curve, however on the upside it is fully customisable and works very well.
I can happily recommend IB as one of the best brokers for penny stocks, plus they cater to a large number of countries.
PROS: low cost, excellent execution
CONS: customer service
I have yet to open an account with SpeedTrader as being non-US-based I need a minimum of 25k. I am mulling it over and we will see in the near future – maybe I’ll open an account and keep my IB as a backup. Some of the excellent things about SpeedTrader are their executions on OTC stocks. As most of the penny stocks are on OTC bulletins boards this is very important. If you have a perfect setup and cannot get executed your trade may be over before it begins. SpeedTrader have decent borrows and are considered one of the best penny stock brokers.
They are not the cheapest ($4.95) per transaction however you can negotiate with them (contact me if you would like an introduction).
SpeedTrader uses the DAS platform software which is fine and works very well (however a bit old-school and non-fancy). Tim Grittani recommends and uses SpeedTrader.
PROS: excellent OTC executions
CONS: can be a bit pricey however are willing to negotiate
Honourable mention goes to
CenterPoint requires a high minimum balance and only accepts experienced traders. I reached out to them and at the moment I am unable to open an account due to my level of experience. Tim Grittani, Tim Sykes, Michael Goode and other top traders use and recommend them.
CenterPoint have excellent borrows for hard to borrow stocks, excellent execution and customer service. On the flipside this doesn’t come cheap and therefore is not suitable for beginner traders.
PROS: for experienced traders only, high minimum balance, excellent borrows and execution
CONS: expensive, not for beginner traders
Stay away from
Recently CEO Guy Gentile was charged with perpetrating penny stock manipulation by the SEC – a quite disastrous event if you are the CEO of an offshore broker trying to win market share. You can read more about Guy Gentile and his arrest here. I have yet to make my mind about the blog that sources this story (Trading Schools) however feel free to leave your thoughts and comments below. Until 2012 SureTrader and SpeedTrader were the one company.
Unfortunately I had some bad experiences with SureTrader experiencing hit and miss executions with poor fills.
You can open an account with $500, however they charge fees for a lot of things and commissions will eat this up quite quickly (like inactivity and software fees). In my case this happened even after I placed my account on hold. I was reimbursed however then got double charged on transferring money out with no reason.
I wouldn’t recommend SureTrader unless you have a very small account. SureTrader is definitely not one of the best penny stock brokers unless you need to avoid the PDT rule.
PROS: No PDT rule applies and low opening balance requirements
CONS: poor execution, customer service, expensive
Have you tried any other brokers, or have you had a different experience? I’d love to hear from you, please leave your comments below.