Understanding the penny stock broker and their main features is what allows you to choose the best broker to suit your needs. As important as it is to choose the right stocks, it is equally as important to choose the right penny stock broker to carry out your investing activity.
What Is a Penny Stock Broker?
A penny stock broker is an individual or on online platform used by a trader to engage in the buying and selling of penny stocks. There are as many stock brokers out there as there are penny stocks. Well, maybe not exactly, but it sure does feel like it. Their main purpose is to provide a means to facilitate the process of trading stocks.
Your broker can also act as an advisor in certain situations and therefore can have an impact on your trading decisions. Ultimately, each penny stock broker is unique with its own advantages and offerings. What is important is to do your research to select the best broker to fit your needs.
What To Look For In a Penny Stock Broker?
A penny stock can offer two ways of making trades. They can either have traders call in to place their buy and sell orders with a live broker or they can use the broker’s online trading platform. Almost all brokers today offer an online trading platform of which most traders have become accustomed to using. Having a fast, easy and secure means to placing trades is a significant asset when looking for a broker. While the call and trade approach does offer the convenience of speaking to another person to place a trade, lengthy waiting times can affect trading prices and significantly impact returns. Additionally, brokers sometimes charge for the ability to speak to a person, the fee commonly built into the transaction cost. For the most part, using do-it-yourself options online are a preferential choice for conducting trades.
The fee structure is another important concern when choosing a broker. Fee structures can vary from broker to broker. Choosing the right fee structure is dependent on the nature of your trading activity. A flat commission charged off of each buy and sell transaction or a charge on each individual share purchased are two common fee structures. If you commonly purchase penny stocks at very cheap prices per share, you may want to avoid the per-share fee structure as it can render it difficult to make a profit. Buying a penny stock at $0.20 per share with a $0.05 per share transaction fee can eat away at your profit margin. When choosing a broker, it is also important to consider minimum opening balances, withdrawal, inactivity, maintenance and potential hidden fees.
Finding A Penny Stock Broker
Before you can begin to trade penny stocks, you must find the right broker and fits your strategy. There is no one size fits all when it comes to choosing your stock broker and the process often requires lots of tedious research. Websites such a stockbrokers.com are often a good place to start as they offer tools to evaluate and compare among the many available brokers.
Some of the more popular stock brokers include:
- TD Ameritrade
- E-Trade
- Interactive Brokers
To see more options for brokers, check out our article on the Best Stock Brokers for Beginners!
Like any other part of investing, the more preparation the better. Be prepared and learn more about the choosing the right stock broker with Wall Street Survivor’s course Basics Of The Stock Market.
The Best Stock Newsletters as of January 3, 2025
Ranking of Top Stock Newsletters Based on Last 3 Years of Stock Picks
We are paid subscribers to dozens of stock and option newsletters. We actively track every recommendation from all of these services, calculate performance, and share our results of the top performing stock newsletters whose subscriptions fees are under $500. The main metric to look for is "Excess Return" which is their return above that of the S&P500. So, based on January 3, 2025 prices:
| Rank | Stock Newsletter | Stock Picks | Average Return | S&P500 Return | Excess Return | Percent Profitable | Max % Return | Min % Return |
|---|---|---|---|---|---|---|---|---|
| 1. |  Alpha Picks | 64 | 71.7% | 23.9% | 47.8% | 77% | 969% | -47% |
| Summary: 2 picks/month based on Seeking Alpha's Quant Rating; Retail Price is $499/yr. See details in our Alpha Picks Review. | MARCH PROMOTION: Save $50 | |||||||
| 2. |  Value Investor | 39 | 26.8% | 13.9% | 12.8% | 51% | 494% | -41% |
| Summary: 10-25 stock picks per year based on Zacks' Quant Rating; Retail Price is $495/yr. Read our Zacks Review. | MARCH PROMOTION:$1, then $495/yr | |||||||
| 3. | Top 10 | 33 | 21.2% | 8.4% | 12.8% | 52% | 170% | -56% |
| Summary: 10 stock picks released on January 1st of each year based on Zacks' Quant Rating & maybe 1 or 2 changes a year; Retail Price is $495/yr. Read our Zacks Review. | MARCH PROMOTION:$1, then $495/yr | |||||||
| 4. |  Moby.co | 311 | 42.1% | 31.4% | 10.7% | 74% | 1030% | -95% |
| Summary: 60-150 stock picks per year, segmented by industry; Retail Price is $199/yr. Read our Moby Review. | MARCH PROMOTION:Get 1 pick free! | |||||||
| 5. |  Stock Advisor Canada | 36 | 31.8% | 25.3% | 6.5% | 81% | 216% | -68% |
| Summary: 1 pick/month from the Toronto stock exchange; Retail Price is CD$199/yr. Read our Motley Fool Canada Stock Advisor Review. | MARCH Promotion: Get $100 Coupon | |||||||
| 6. | Hidden Gems | 76 | 38.1% | 32.9% | 5.2% | 71% | 258% | -100% |
| Summary: Sold as part of Epic service that includes Hidden Gems, Stock Advisor, Rule Breakers; 5 picks/month; Retail Price is $499/yr. Read our Epic Review. | MARCH Promotion: Get $200 Coupon | |||||||
| 7. |  Action Alerts Plus | 378 | 20.8% | 16.7% | 4.1% | 56% | 220% | -77% |
| Summary: 2100-150 trades per year, lots of buying and selling and short term trades. Read our Jim Cramer Review. | Current Promotion: None | |||||||
| 8. |  TipRanks SmartInvestor | 124 | 10.3% | 7.2% | 3.1% | 60% | 269% | -48% |
| Summary: About 1 pick/week focusing on short term trades; Lifetime average return of 355% vs S&P500's 149% since 2015. Retail Price is $379/yr. Read our TipRanks Review. | Current Promotion: Save $180 | |||||||
| 9. | Rule Breakers | 66 | 36.2% | 35.4% | 0.8% | 65% | 344% | -81% |
| Summary: 2 picks/month focusing on disruptive technology and business models; Lifetime average return of 355% vs S&P500's 149% since 2005; Now part of Motley Fool Epic. Read our Motley Fool Epic Review. | Current Promotion: Save $200 | |||||||
| 10. | Stock Advisor Canada | 71 | 25.2% | 24.8% | 0.5% | 73% | 216% | -93% |
| Summary: 2 pick/month from the TSX and U.S. markets; Retail Price is CD$199/yr. Read our Motley Fool Canada Stock Advisor Review. | MARCH Promotion: Get $100 Coupon | |||||||
| Top Ranking Stock Newsletters based on their 2024, 2023, 2022 stock picks' performance as compared to S&P500. S&P500's return is based on average return of S&P500 from date each stock pick is released. NOTE: To get these results you must buy equal dollar amounts of each pick on the date the stock pick is released. Investor Business Daily Top 50 based on performance of FFTY ETF. Performance as of January 3, 2025. | ||||||||
Build your wealth faster with best stock picks: See our current ranking of the BEST STOCK NEWSLETTERS.