People are flocking to the stock market and looking for investments in top stock brokers because of the impressive returns, numerous investment possibilities, and ease of liquidity. Investing in penny stocks is a complex procedure, so you will want to work with a reputable stockbroker. Investing in the stock market can be dangerous, so you will need help from a broker.
However, you may not get the same user experience from all brokers, and it is tough to tell whether the broker you choose to begin your trading career with is up to snuff. Because of this, we analyzed each company according to the following criteria to assist you in selecting the best stock broker out of the many available choices.
This means that a good online broker should have a fair minimum investment requirement, high-quality trading tools, full customer service, and no hidden account fees. Brokers that met our standards and were included in our ranking of the best brokers for penny stock trading may be found below.
Top Brokers for Trading Penny Stocks
- eToro: Overall Best Platform for Penny Stock Trading on the Market
- IQ Option: Well-Known Penny Stock Traders for Stock Trades
- TradingView: Online Trading Platform to Buy or Sell Penny Stocks
- FINVIZ: Interactive Brokers to Help in Penny Stock Trades
#1. eToro: Overall Best Platform for Penny Stock Trading on the Market
Overview
eToro is a multi-asset brokerage firm known for its copy and social trading network, eToro.com. Ronen Assia, Yoni Assia, and David Ring founded it in 2006, and securities and exchange-traded funds (ETFs) are also on the menu. Millions of people have signed up for eToro’s services in 140 countries worldwide. In Israel, in Tel Aviv-Yafo, you will find the company’s main offices, and the company’s registered offices are located in Cyprus, the United Kingdom, the United States, and Australia. The company’s value has increased from $800 million in 2018 to $2.5 billion in 2020, which is a significant increase. Moreover, top-tier authorities have regulated eToro, making it safe to trade.
When funding an eToro account with a debit card or bank account, the minimum deposit is $10. So, you can buy a small portion of a stock for as little as $10 if you want to invest in fractional shares of the company.
In addition, eToro offers the eToro wallet for iOS and Android as part of its free digital currency wallet service. Converting cryptocurrency into fiat currency (in this case, dollars) costs 5%, which some users may consider a significant portion of their potential profits, and between $125 and $10,000 can be purchased. One-way coin transfers are permitted, but eToro notes that any coins transferred cannot be transferred back to the eToro trading platform once they have been transferred from the eToro platform.
Highlights
To use the eToro platform, you will pay a 1% transaction fee to buy or sell crypto assets. No commission is charged when you buy or sell stock or ETF, and the broker pays for any regulatory transaction fees that may arise when you do so. For both partial and full account transfers, there is a $75 fee. Only email and a support ticket are available for contacting eToro’s customer service, but “Club Members” can pay extra for live chat customer service.
Furthermore, withdrawing money is simple. To do this, they impose a $5 charge, and a minimum of $30 is required for each withdrawal. Withdrawals are made using a bank card, an electronic wallet, or a checking or savings account. However, withdrawing money from an account that is not based on dollars will incur an additional fee.
Pros
- Penny stocks that are not traded on any of the major exchanges offered
- Traders can copy others’ trades
- Easy-to-use app
- Uncomplicated fee schedule
Cons
- This service covers only 43 states
⇒ Visit the Official Website of eToro
#2. IQ Option: Well-Known Penny Stock Traders for Stock Trades
Overview
When it comes to binary options brokers, you cannot go wrong with IQ Option because of its user-friendly trading platform. Traders looking for a reputable CFD and binary options broker with low commissions should check out IQ Option. The account opening process and customer service are both excellent, and beginners and experienced traders can benefit from using it.
Since its inception in 2013, IQ Option has been part of the IQ Option Ltd. parent company. A wide range of financial instruments is available through their platform, and many accolades were bestowed on the desktop and mobile platforms for their unique features and functionalities. By now, it is one of the most widely used platforms, with more than 500 million users. Over a million transactions take place every day, and traders from 213 countries around the world can use it.
To create an award-winning trading platform, IQ Option built its own. In terms of usability, it is a breeze to get started. This included multi-chart charts with technical analysis and economic calendars, stock screeners, historical quotes, volatility alerts, and market updates. In contrast to other brokers for penny stocks, the IQ option platform is available in 13 different languages.
Following in the footsteps of the custom trading platform, the IQ Option mobile trading app offers traders a smooth and intuitive mobile trading experience. The screen, buttons, and “look and feel” of the trading area are identical to those on the full website or desktop application. The IQ Option Android app was created specifically for Android devices and delivered a tailored product for each operating system.
Highlights
IQ Option offers round-the-clock support for traders as one of its standout features. You can contact an IQ Option expert via phone or chat at any time of the day or night. A variety of options are available for customer service, including email, chat, and phone support. Traders who are VIPs, for example, have access to a dedicated account manager.
The support is available in various languages, just like the trading platform. IQ Option has a global presence and is actively expanding its operations. Tutorials for novice traders are available, and there is a wealth of information available for each asset you wish to trade.
Pros
- By the Cyprus Securities and Exchange Commission
- Quick and simple method for opening a bank account
- Variety of trading instruments available
- Free to put money in and take it out
Cons
- MT4 and MT5 trading platforms are not available
⇒ Visit the Official Website of IQ Option
#3. TradingView: Online Trading Platform to Buy or Sell Penny Stocks
Overview
More than 30 million traders and investors worldwide use TradingView as a social network. With the best charts and analysis tools available, you will be able to identify potential investment opportunities across the globe. TradingView is where to go if you want to keep track of your favorite assets, discover new trading opportunities, identify market trends, and interact with other traders and investors.
Traders have been using TradingView for a long time, and it was founded to change the way people trade. The platform has the potential to be used by traders and investors from all over the world. Since its inception, TradingView has helped many people save money on expensive trading terminals. To date, it is the only web-based and cloud-based analysis platform available. It has all the tools and data you need to succeed if you have trading skills, to make a long story short.
Moreover, TradingView upholds the principles outlined in its honor code. You can use it to help traders and investors navigate chaotic markets worldwide. Television aids them in discovering and seizing countless market opportunities for profitable trading, and everything you need to get the job done includes information, data, and analysis tools. You do not even need a username or password to access the site’s extensive content.
Highlights
In the free version, you can only have one chart open at a time per tab; but in TradingView Premium, you can have up to eight charts open at once. Those who register for the free version can save their charts per layout and select from 12 different chart types.
The saved chart layouts in TradingView can be opened with a few mouse clicks. Chart data can be exported, custom time intervals can be set, and spread-based intraday charts can be created for pro subscribers.
In addition, more than 50 intelligent drawing tools are available for all plans. Lines and trends, geometric shapes, patterns, and annotations are some examples of these design elements. These drawing tools play a major role in technical analysis. The stock market is subject to ups and downs, but regardless of the market’s direction, TradingView helps you better understand the market’s technical aspects.
Pros
- One of the most adaptable systems available
- Intuitive and easy-to-use charts with smooth zooming in/out
- Popular and community-created indicators make up a vast collection of indicators
- Fantastic assortment of trading tools
- One of the most effective stock and forex screeners available anywhere
- Fully-functional app for smartphones and tablets
- Free plan gives you access to a slew of impressive features
- Inexpensive pricing options
Cons
- Investing in asset classes such as ETFs is poorly profiled
⇒ Visit the Official Website of TradingView
#4. FINVIZ: Interactive Brokers to Help in Penny Stock Trades
Overview
FINVIZ is our top pick for the best stock screener for swing trading. It provides fundamental and technical criteria, real-time quotes and charts, backtesting, pre-market data, and email alerts.
Since its inception in 2007, FINVIZ’s stock screener has proven to be a popular choice among investors. As a swing trader, what sets it apart is its comprehensive set of tools, which includes real-time and interactive charts, pre-market data, and backtesting based on years of historical data.
FINVIZ is a great stock screener for all investors and traders, but we think it is the best for swing trading because of its flexibility.
FINVIZ is a shorthand for “Financial Visualizations,” a nod to the site’s innovative visual presentation, which makes it a pleasure to use. To see a stock’s chart, all users have to do is hover their cursor over its symbol in the screener.
What sets them apart is how they have crammed their screener with many useful options. Its Elite screener provides access to real-time data, advanced charts, pre-market data, custom filters, and data export options.
Highlights
The best software is even better when accessible to everyone for free. Although FINVIZ Elite, a premium version, is available for $25 a month, you probably do not need it because the free version is so good. Paying for tools and subscriptions every month does not make sense, especially if you are just getting started.
FINVIZ’s user interface (UI) is both simple and powerful simultaneously. Overall, it is a fantastic piece of software. Hovering over a stock ticker in your screener, for example, will bring up a stock chart for that specific company. Cool, is it not?
Filters allow you to easily divide the market, making it simple to find exactly what you are looking for. FINVIZ stands out among other screeners for its excellent design. Finally, and perhaps most importantly, it is straightforward to operate.
Pros
- Fantastic sector-specific stock maps on Google Maps
- Tweaked content for every ticker
- Trading with an advantage
- Ratings are given to each stock by analysts
- Feature available that allows you to search for stocks based on technical patterns
- Correlations and backtests
- Detailed graphs
- Compared to competitors, pricing is simple and reasonable
Cons
- Data cover only U.S. stock exchanges
⇒ Visit the Official Website of FINVIZ
Factors We Considered to Create This List of Platforms for Penny Stock Trades
For investors, the best stock trading platforms make it simple to trade securities without charging a fortune for their services. According to our criteria, the companies on our list excelled in the following:
Fees
For subscriptions or platform use, some brokers charge fees. Deposits, withdrawals, and other transactions are also subject to various fees. You may find yourself with higher monthly fees and, as a result, a smaller profit margin. Withdrawals and deposits are expensive, so we ensured the brokers we collaborated with had low fees. To top it all off, we make sure these brokers do not charge for using their software.
Platform
Some people prefer to conduct business from the comfort of their own home, while others prefer to conduct business while on the go. Our primary goal was to compile a list of brokers that support various platforms. Access to the trading platform is ensured at all times by this method.
Training
We want new investors to be able to profit handsomely from their stock purchases. As a result, we give special consideration to online brokers who provide their clients with easy access to high-quality educational materials.
Customer Support
We also looked into customer service as part of our research. When you have a concern or a problem with your account, you do not want to wait two weeks for assistance. Companies that can provide customers with quick, efficient, and knowledgeable service were the focus of our search.
Brokers on our list even offer live chat, which allows you to speak with a representative immediately rather than waiting for a response that could take hours.
Authenticity
In addition to the factors above, we also look at authenticity. Licensed brokers are required to offer their services to clients, and these businesses should also be subject to regulation. Our options are licensed and regulated, so you can rest assured your money is safe while investing in the stock market.
Country Restrictions
We also looked into any country-specific restrictions that these businesses may have faced. Some companies are not allowed to operate in the United States for various reasons, so they are not necessarily the best option. We could get a better sense of how open these sites were. As a result, we opted for platforms that strictly adhered to all applicable laws and regulations.
Safety and Security
We will put all of our efforts into protecting your money at any broker system. That will always be your primary concern since you cannot afford to lose your money to scams or frauds. We have vetted the listed brokers to ensure your money and personal information are safe. Because they are governed, these locations provide the highest level of security.
Factors You Should Consider While Choosing These Active Traders
Finding a penny stock broker can take some time because there are so many available. Here are some suggestions to help you get things done more quickly.
Safety
Your choice of trading broker should take into account the safety options they provide. The majority of trading platforms require a two-step verification process to log in, and hackers cannot access your account or your personal information because of this. We recommend using a broker that offers cold storage if you want additional security.
Regulation
When looking for a trading platform, the most critical factor to consider is whether or not the broker is licensed and regulated. It is also a good idea to see who regulates them.
Keep in mind that not all regulatory bodies are alike, so make sure the regulatory bodies are credible before you get involved. But, you have some protection from the law. Additionally, you can rest assured the broker you select is real.
Education and Research
An essential part of any trading platform is educational and research content. This is an important thing to look for, regardless of your skill level. Especially for newcomers, high-quality educational content is essential.
Paper trading accounts are a great educational tool to get a feel for the trading platform before signing up.
Customer Service
When it comes to penny stock trading, customer service is critical. A variety of services are available to assist customers in making the most cost-effective and appropriate use of brokers’ services.
Customer support services are all examples: installing, configuring, training, troubleshooting, upgrading, and terminating products and services. Customer service options for penny stock trading include live chat, phone answering, and email.
Research Fees
The purchase or sale of stocks may result in additional fees. Even if a broker claims to be commission-free, additional fees may be associated with using the broker. Because broker commissions can reduce profits, it is important to factor them in when evaluating trades.
There are many advantages to flat fees, such as that they do not change based on how many shares you buy, which can significantly impact your bottom line.
Furthermore, the lack of liquidity in some penny stocks can cause spreads to fluctuate and rise. As a result of penny stocks’ small market capitalization and low liquidity, brokers must charge a widespread fee for their services.
Advantage of Trade Stocks
The penny stock market is a great place to start if you are a novice investor. In general, penny stocks have a low value, so you will not have to spend much money. Investing in penny stocks has its benefits, and the following are some essential things you need to know before investing in these shares.
You Do Not Need a Big Account
Penny stock trading has yet another significant benefit — small investors can trade penny stocks because of their low prices. As such, investing in penny stocks does not necessitate a large amount of money.
Easy Entry
For the most part, it is a breeze to get started trading penny stocks. There are no prerequisites for this position, and internet access and an online brokerage account are only needed to get started.
Generate High Returns
It is not a given that all penny stocks will fail. Companies with solid financials and growth potential can be traded for penny stocks, and there are plenty of them. The best way to identify these platforms is to research and invest in them.
Low Cost
As we have already mentioned, penny stocks can be purchased for a very low price. These stocks are frequently available for less than Rs 10 per share on the U.S. market. With today’s low share prices, even those with limited funds can buy many shares.
Penny Stock Trade Characteristics
A good penny stock broker has a wide range of qualities. Look at each broker in greater detail once you have compiled a list of safe and regulated brokers to use in your trading.
Easy Navigation
Choosing a broker with a user-friendly platform may not seem important at first, but it will save you a lot of time and effort in the long run. Make sure you select a trading platform that makes it simple to place orders, monitor your account, and get support when you run into difficulties. An easy-to-use and managed platform can save you a lot of time and effort in the long run.
Technical Tools
Traders and investors alike depend on thorough investigation and analysis. Learn more, test new trading strategies, and put what you learn into practice with additional technical analysis tools. Technical analysis is not for everyone, but having various tools at their disposal can be a huge asset for those who do.
Large Selection of Stocks with Cheap Fees
You should look for a broker that offers a wide selection of penny stocks and charges reasonable commissions if you plan to trade in this type of stock.
Outside Access
Integrating third-party platforms with your brokerage account can make it easier to keep track of your portfolio, charts, and any other additional research. When managing a large number of investments, this quality can be crucial.
FAQs: Penny Stocks Trading
Q1. What is the difference between regular and penny stocks?
There are many different types of “penny stocks.” Due to the lack of proven or experienced businesses selling at these rates, many experts believe these stocks to be riskier. There is a lot less information available to investors regarding penny stocks, which means that if you buy and later decide to sell, you may not be able to find a buyer.
The normal course for valuable stock tends to be the proof of the business model a company makes before entering the public markets. On the other hand, most penny stocks go public before they have reached their optimistic growth stage, resulting in fewer of these companies becoming successful in the future.
Q2. Why do you need a penny stock broker?
Finding a safe and dependable broker is critical, and it should never be taken for granted. Because of the stringent requirements for listing on major exchanges, most penny stocks are traded over-the-counter (OTC).
If you choose a broker, commissions and fee structures will vary, and the bid-ask spreads of penny stocks will also be affected by the different brokers and stocks. Because of this, you must choose a regulated broker that meets your needs.
As a bonus, some penny stock brokers offer additional benefits and educational resources that can benefit everyone. It is vital to do your study on the broker before signing on the dotted line.
Q3. Are online brokers safe?
On the other hand, there is still a widespread misconception that online stock trading is less secure than traditional stock trading. The top brokers have so much at stake that they now use high-end 128-bit encryption to safeguard customer data and privacy. As far as U.S. law is concerned, this is the highest level of security that can currently be implemented.
In addition, the best online brokerage firms employ additional security measures, such as using secure servers and sorting data behind secure and monitored firewalls in fully secured facilities — some of the biggest names in the business use a two-step authentication process. Your security is bolstered by the feature that logs you out after ten minutes of inactivity.
If you want to be safe, only work with firms covered by the Securities Investor Protection Corporation (SIPC), which offers up to $500,000 in insurance coverage for investors.
Q4. What are penny stocks?
“Penny stock” refers to any stock less than $5.00. As the name implies, this was formerly any stock trading at or below $1.00. Investing in a penny stock might seem like a risky proposition because of the uncertainty surrounding the company’s future.
Still, it can be an excellent opportunity for those who see it as a way to get in on the ground floor of a promising new industry. Bulk purchases of penny stocks are more common, and these are then sold at a profit after a small increase in price, sometimes as small as $0.01.
Because you can make thousands of dollars in a single transaction while on your lunch break by moving 100,000+ shares at the high nickel price, these profits come from volume rather than price increases. Of course, this is not a reality for everyone, but it has been documented.
Q5. How many funds do you need to trade penny stocks?
You do not need a lot of money to get started. Buy 100 shares at a penny and sell them at two cents each, then reinvest the proceeds in more shares. As you diversify your investments, you can take different risk factors and re-invest small amounts of money in different stocks, increasing your chances of doubling or even quadrupling your money.
Before investing $1,000, it is good to start with at least $100 and try out a few different stocks to feel the market. However, you can get started with just a single dollar. Many low-budget investors are attracted to penny stock trading because of this. Just make sure you play it correctly and remember, again is again.
Q6. Can you make money on penny stocks?
Penny stocks can be a profitable investment. It is possible to make money with any stock, but that does not mean you should. As a rule of thumb, successful investors focus on the long-term potential of their stock picks, regardless of their current price.
It is a smart move to put your money into a small business. Those who buy stock in rapidly expanding companies while still small enjoy a much greater share price appreciation than those who wait to buy stock in giants. The problem is that penny stocks are rarely a bargain, and there is a good reason why their stock is so cheap. There is little to no long-term value in investing in penny stock companies.
Q7. What are the risks of online stock trading?
Online brokerage is generally safe, but everyone should know a few risks and issues. Anyone, even a close friend or acquaintance, can access your personal information and financial resources to commit identity theft. In light of recent data breaches, this is also an important issue, and financial institutions are the primary targets of large attacks.
As an individual, it is important to know that the computer or device you are using to access your online broker service must be as clean and safe to use as possible. Spyware can be installed on your PC by viruses and malware, giving thieves access to your data by monitoring your keystrokes.
These criminals also use phishing scams to target consumers. An email that appears to be from your broker but is a copy redirecting you to a website designed to steal your login information can appear from your broker.
Conclusion: Which Penny Stocks to Invest In?
Now, you can choose the best brokers for penny stock trading from the top selected brokerage firms. Whether you are a rookie or an expert, all of the brokerage firms we have analyzed have the potential to become your go-to choice. As a result, the final decision is yours.
