Best Brokers For Penny Stocks 2026

Your capital is at risk. Trade only with funds you can afford to lose.

Tested with a live trading account Accept traders from United States

Our Top Pick in USA 1 Interactive Brokers 4.3/5 Visit

2 eToro USA 3.4/5 Visit

3 NinjaTrader 4.5/5 Visit

4 FOREX.com 4.3/5 Visit

Compare Interactive Brokers and eToro USA Details

Brokers With: Stocks ×

Showing 5 of 7 matching brokers

Filters Order By ... Overall Rating Latest Trust & Regulation Banking & Accounts Assets & Markets Fees & Costs Platforms & Tools Research Education Customer Support iOS App Android App Most Clients Trustpilot Score

1. 1

   Interactive Brokers

   4.3/5 our rating
   Available in United States Not available in United States
   Rating breakdown

   Regulation & Trust 4.5

   Assets & Markets 4.7

   Fees & Costs 4.3

   Platforms & Tools 3.3

   Customer Support 3.0

   Education 4.3

   Research 4.4

   Accounts & Banking 3.5
   Visit Interactive Brokers Read Review

   IBKR offers equity products from 24 countries. Invest directly in stocks for growth, dividends, or voting rights. Trade price movements through CFDs, futures, and over 13,000 ETFs. In 2024, IBKR added CBOE Europe Derivatives (CEDX) to its European equity derivatives offering.

   Stock Exchanges

   Interactive Brokers offers trading on 18 stock exchanges:

   • Abu Dhabi Securities Exchange
   • Borsa Italiana
   • CAC 40 Index France
   • Chicago Mercantile Exchange
   • Euronext
   • IBEX 35
   • Japan Exchange Group
   • Korea Exchange
   • London Metal Exchange
   • London Stock Exchange
   • Nairobi Securities Exchange
   • Nasdaq
   • Nasdaq Nordic & Baltics
   • New York Stock Exchange
   • Russell 2000
   • Shenzhen Stock Exchange
   • Tadawul
   • Toronto Stock Exchange
   • +6 more

   Fractional Shares

   ✓

   Stock Baskets

   ✗

   Automation

   ✓

   Demo Account

   ✓

   Minimum Deposit

   $0

   Minimum Trade

   $1

   Leverage

   1:50 (major forex pairs), 1:2-1:4 (equities)

   Copy Trading

   ✗

   Regulator

   SEC, FINRA, CFTC, NFA, CIRO, FCA, CBI, ASIC, SFC, SEBI, JFSA, MAS

   Instruments

   Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, Cryptocurrencies, CFDs Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, Cryptocurrencies

   Platforms

   Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower

   Account Currencies

   USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF

2. 2

   eToro USA

   3.4/5 our rating
   Available in United States Not available in United States
   Rating breakdown

   Regulation & Trust 4.0

   Assets & Markets 2.9

   Fees & Costs 3.4

   Platforms & Tools 3.5

   Customer Support 3.0

   Education 3.0

   Research 3.5

   Accounts & Banking 3.0
   Visit eToro USA Read Review

   Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk. This site is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD.

   eToro US allows you to trade over 3000 renowned US stocks and ETFs without any commissions. You also have the option to trade with fractional shares. The broker is especially suitable for novice traders due to its extensive eToro Academy and easy-to-use stock market research tools.

   Stock Exchanges

   eToro USA offers trading on 3 stock exchanges:

   • Dow Jones
   • New York Stock Exchange
   • S&P 500

   Fractional Shares

   ✓

   Stock Baskets

   ✗

   Automation

   ✓

   Demo Account

   ✓

   Minimum Deposit

   $50

   Minimum Trade

   $10

   Leverage

   ✗

   Copy Trading

   ✓

   Regulator

   SEC, FINRA

   Instruments

   Stocks, Options, ETFs, Crypto

   Platforms

   eToro Trading Platform & CopyTrader

   Account Currencies

   USD

3. 3

   NinjaTrader

   4.5/5 our rating
   Available in United States Not available in United States
   Rating breakdown

   Regulation & Trust 4.1

   Assets & Markets 3.5

   Fees & Costs 4.3

   Platforms & Tools 4.5

   Customer Support 4.0

   Education 4.0

   Research 4.0

   Accounts & Banking 3.3
   Visit NinjaTrader Read Review

   You can trade stocks using the NinjaTrader platform with supported brokers. The company also offers various index futures through regular and micro contracts, such as the E-Mini S&P 500 Index Futures and E-Mini Russell 2000 Index Futures.

   Stock Exchanges

   NinjaTrader offers trading on 2 stock exchanges:

   • Chicago Mercantile Exchange
   • New York Stock Exchange

   Fractional Shares

   ✗

   Stock Baskets

   ✗

   Automation

   ✓

   Demo Account

   ✓

   Minimum Deposit

   $0 (live trades must meet intraday margin minimums, e.g., $50 to trade micro contracts)

   Minimum Trade

   1 contract

   Leverage

   $50 intraday margins for Micro contracts and $500 for popular E-mini contracts

   Copy Trading

   ✗

   Regulator

   NFA, CFTC, CySEC

   Instruments

   Futures, Forex, Stocks, Options, Commodities, Futures, Crypto (non-futures depend on provider)

   Platforms

   NinjaTrader Desktop, Web & Mobile, eSignal

   Account Currencies

   USD, EUR, GBP, CAD, AUD

4. 4

   FOREX.com

   4.3/5 our rating
   Available in United States Not available in United States
   Rating breakdown

   Regulation & Trust 4.5

   Assets & Markets 4.0

   Fees & Costs 4.2

   Platforms & Tools 4.6

   Customer Support 3.9

   Education 3.9

   Research 4.8

   Accounts & Banking 4.0
   Visit FOREX.com Read Review

   74% of retail accounts lose money with this provider.

   FOREX.com offers numerous US, EU, and UK stock CFDs with tight spreads starting from 1 point. You can trade in well-known companies as well as upcoming IPOs, promoting variety in your stock portfolio. You can access US stocks for a minimal cost of 1.8 cents per share.

   Stock Exchanges

   FOREX.com offers trading on 14 stock exchanges:

   • Australian Securities Exchange (ASX)
   • Borsa Italiana
   • CAC 40 Index France
   • DAX GER 40 Index
   • Dow Jones
   • Euronext
   • FTSE UK Index
   • Hang Seng
   • Hong Kong Stock Exchange
   • IBEX 35
   • Japan Exchange Group
   • Nasdaq
   • S&P 500
   • SIX Swiss Exchange

   Fractional Shares

   ✗

   Stock Baskets

   ✗

   Automation

   ✓

   Demo Account

   ✓

   Minimum Deposit

   $100

   Minimum Trade

   0.01 Lots

   Leverage

   1:50

   Copy Trading

   ✗

   Regulator

   NFA, CFTC

   Instruments

   Forex, Futures and Options on Metals, Energies, Commodities, Indices, Bonds Forex, CFDs, Stock CFDs, Indices, Commodities, Futures, Options, Crypto

   Platforms

   WebTrader, Mobile, MT4, MT5, TradingView

   Account Currencies

   USD, EUR, GBP, CAD, AUD, JPY, CHF, PLN

5. 5

   Crypto.com

   3.5/5 our rating
   Available in United States Not available in United States
   Rating breakdown

   Regulation & Trust 3.9

   Assets & Markets 4.0

   Fees & Costs 3.3

   Platforms & Tools 4.0

   Customer Support 2.5

   Education 3.8

   Research 3.8

   Accounts & Banking 3.8
   Visit Crypto.com Read Review

   Crypto.com is a leading cryptocurrency exchange focused on advancing DeFi technologies. It provides token lending, prepaid cards, NFTs, and more. Founded in Hong Kong in 2016, it serves 150 million users.

   Stock Exchanges

   Crypto.com offers trading on 0 stock exchanges:

   Fractional Shares

   ✗

   Stock Baskets

   ✗

   Automation

   ✓

   Demo Account

   ✗

   Minimum Deposit

   Varies by payment method

   Minimum Trade

   $1

   Leverage

   ✗

   Copy Trading

   ✗

   Regulator

   MAS, AMF, CySEC, CBI, ASIC, FINTRAC, CIMA, VARA, OAM, HCMC, CFTC, OSC, KoFIU, FCA (registered for MLR only), SEC (securities only)

   Instruments

   Crypto, Stocks, ETFs, OTC Options, Tokenized Stocks, Prediction Markets and Strike Options (US only)

   Platforms

   Own, TradingView

   Account Currencies

   USD, EUR, GBP, CAD, AUD, NZD, ZAR, TRY, SEK, NOK, DKK, CHF, HKD, PLN, CZK, AED, SAR, HUF, BRL, KES

Comparison of Best Penny Stock Brokers

Broker		USD Account	Fractional Shares	Extended Hours	Margin Trading
		✓	✓	✓	✓
		✓	✓	✓	✓
		✓	✗	✗	✓
		✓	✗	✗	✓
		✓	✗	✗	✓
Broker		USD Account	Fractional Shares	Extended Hours	Margin Trading

Broker Details Comparison

Broker	Demo Account	Minimum Deposit	Minimum Trade	Leverage	Assets	Platforms
	✓	$0	$1	1:50 (major forex pairs), 1:2-1:4 (equities)	Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, Cryptocurrencies, CFDs Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, Cryptocurrencies	Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower
	✓	$50	$10	✗	Stocks, Options, ETFs, Crypto	eToro Trading Platform & CopyTrader
	✓	$0 (live trades must meet intraday margin minimums, e.g., $50 to trade micro contracts)	1 contract	$50 intraday margins for Micro contracts and $500 for popular E-mini contracts	Futures, Forex, Stocks, Options, Commodities, Futures, Crypto (non-futures depend on provider)	NinjaTrader Desktop, Web & Mobile, eSignal
	✓	$100	0.01 Lots	1:50	Forex, Futures and Options on Metals, Energies, Commodities, Indices, Bonds Forex, CFDs, Stock CFDs, Indices, Commodities, Futures, Options, Crypto	WebTrader, Mobile, MT4, MT5, TradingView
	✗	Varies by payment method	$1	✗	Crypto, Stocks, ETFs, OTC Options, Tokenized Stocks, Prediction Markets and Strike Options (US only)	Own, TradingView
Broker	Demo Account	Minimum Deposit	Minimum Trade	Leverage	Assets	Platforms

Safety Comparison

Compare how safe the Best Brokers For Penny Stocks 2026 are.

Broker	Trust Rating	Guaranteed Stop Loss	Negative Balance Protection	Segregated Accounts
	4.5	✗	✗	✓
	4.0	✗	✗	✓
	4.1	✗	✗	✓
	4.5	✗	✗	✓
	3.9	✗	✗	✓
Broker	Trust Rating	Guaranteed Stop Loss	Negative Balance Protection	Segregated Accounts

Mobile Trading Comparison

Compare the mobile trading features of the Best Brokers For Penny Stocks 2026.

Broker	Mobile Apps	iOS Rating	Android Rating	Smart Watch App
	iOS & Android	4.3	4.5	✓
	iOS & Android	4.3	4.0	✗
	iOS & Android	3.0	3.2	✗
	iOS & Android	3.6	3.8	✗
	iOS & Android	4.7	4.5	✗
Broker	Mobile Apps	iOS Rating	Android Rating	Smart Watch App

Comparison for Beginners

Compare how suitable the Best Brokers For Penny Stocks 2026 are for beginners.

Broker	Demo Account	Minimum Deposit	Minimum Trade	Education Rating	Support Rating	Fractional Shares	Demo Competitions
	✓	$0	$1	4.3	3.0	✓	✗
	✓	$50	$10	3.0	3.0	✓	✗
	✓	$0 (live trades must meet intraday margin minimums, e.g., $50 to trade micro contracts)	1 contract	4.0	4.0	✗	✗
	✓	$100	0.01 Lots	3.9	3.9	✗	✗
	✗	Varies by payment method	$1	3.8	2.5	✗	✗
Broker	Demo Account	Minimum Deposit	Minimum Trade	Education Rating	Support Rating	Fractional Shares	Demo Competitions

Comparison for Advanced Traders

Compare how suitable the Best Brokers For Penny Stocks 2026 are for advanced or professional traders.

Broker	Automated Trading	VPS	API	AI	Pro Account	Leverage	Low Latency	Extended Hours
	TWS API	✗	✓	✓	✗	1:50 (major forex pairs), 1:2-1:4 (equities)	✓	✓
	✗	✗	✓	✓	✗	✗	✓	✓
	NinjaScript or via Automated Trading Interface	✗	✗	✗	✗	$50 intraday margins for Micro contracts and $500 for popular E-mini contracts	✓	✗
	Expert Advisors (EAs) on MetaTrader	✓	✓	✓	✗	1:50	✓	✗
	DCA Auto-Staking	✗	✗	✗	✗	✗	✗	✗
Broker	Automated Trading	VPS	API	AI	Pro Account	Leverage	Low Latency	Extended Hours

Accounts Comparison

Compare the trading accounts offered by Best Brokers For Penny Stocks 2026.

Broker	Demo Account	Interest on Cash	Islamic Account	Joint Account	Managed Account	PAMM	MAM	LAMM	Pro Account
	✓	USD: 3.14%, GBP: 3.24%	✗	✓	✓	✗	✓	✗	✗
	✓	USD: 4.05%	✗	✗	✓	✗	✗	✗	✗
	✓	✗	✗	✓	✗	✗	✗	✗	✗
	✓	✗	✓	✗	✗	✗	✗	✗	✗
	✗	USD: 5%	✗	✗	✗	✗	✗	✗	✗
Broker	Demo Account	Interest on Cash	Islamic Account	Joint Account	Managed Account	PAMM	MAM	LAMM	Pro Account

Detailed Rating Comparison

Compare how we rated the Best Brokers For Penny Stocks 2026 in key areas.

Broker	Trust	Platforms	Assets	Mobile	Fees	Accounts	Research	Education	Support
	4.5	3.3	4.7	4.4	4.3	3.5	4.4	4.3	3.0
	4.0	3.5	2.9	4.2	3.4	3.0	3.5	3.0	3.0
	4.1	4.5	3.5	3.1	4.3	3.3	4.0	4.0	4.0
	4.5	4.6	4.0	3.7	4.2	4.0	4.8	3.9	3.9
	3.9	4.0	4.0	4.6	3.3	3.8	3.8	3.8	2.5
Broker	Trust	Platforms	Assets	Mobile	Fees	Accounts	Research	Education	Support

Fee and Cost Comparison

Compare the cost of trading with the Best Brokers For Penny Stocks 2026.

Broker	Cost Rating	Fixed Spreads	Inactivity Fee	EUR/USD Spread	Crypto Spread
	4.3	✗	$0	0.08-0.20 bps x trade value	0.12%-0.18%
	3.4	✓	$10	✗	BTC 0.75%
	4.3	✗	$35	1.3	Floating
	4.2	✗	$15	1.2	BTC 1.4%, ETH 2%
	3.3	✗	$5	✗	0.075% (spot), 0.034% (derivatives)
Broker	Cost Rating	Fixed Spreads	Inactivity Fee	EUR/USD Spread	Crypto Spread

Customer Ratings

Compare how customers of these brokers feel about them, with real user ratings from Trustpilot, the Apple App Store and Google Play.

Broker	Customers	Trustpilot Score	Trustpilot Reviews	Android App Rating	iOS App Rating
	4,300,000	3.0	5,531	4.5	4.3
	3,200,000	4.0	32,244	4.0	4.3
	1,800,000	3.8	1,251	3.2	3.0
	450,000	4.6	2,541	3.8	3.6
	150,000,000	2.0	9,458	4.5	4.7
Broker	Customers	Trustpilot Score	Trustpilot Reviews	Android App Rating	iOS App Rating

Broker Popularity

See how popular the Best Brokers For Penny Stocks 2026 are in terms of number of clients.

Broker	Popularity
Crypto.com	150,000,000
Interactive Brokers	4,300,000
eToro USA	3,200,000
NinjaTrader	1,800,000
FOREX.com	450,000

Why Trade With Interactive Brokers?

4.3/5

Interactive Brokers is ideal for seasoned traders due to its robust charting platforms, updated data, and adaptability, especially with the IBKR Desktop application. Its exceptional pricing and advanced order features appeal to traders, and its variety of stocks remains unmatched in the market.

Pros

• IBKR is a highly regarded brokerage, regulated by multiple respected authorities. This speaks to its legitimacy and standing within the online trading industry, providing peace of mind.
• There's a large selection of free or paid research subscriptions available to all traders. If you subscribe to Toggle AI, you will also receive commission refunds from IBKR.
• IBKR offers exceptional access to global stocks, with thousands of equities available from over 100 market centers in 24 countries, including the recent addition of the Saudi Stock Exchange.

Cons

• Customer service may take time to respond, and there may be delays in fixing problems based on tests. It could be difficult to reach the customer service promptly.
• In 2025, IBKR was fined $11.8 million by the US OFAC for offering services in restricted areas. It also faced a $125,000 fine from FINRA in 2025 for failing to disclose municipal bond information.
• IBKR offers many research tools. However, the tools are not uniformly distributed across trading platforms and the web-based 'Account Management' page, causing confusion for the users.

Visit Interactive Brokers Read Review

Why Trade With eToro USA?

3.4/5

eToro is a strong choice for traders seeking social investing and copy trading. Its low deposit, zero commissions, and easy-to-use platform suit new traders.

Pros

• A free demo account enables new users and potential traders to test the broker without risk.
• The eToro App Store launched in 2026, offering algorithmic trading tools and social analytics. In July, it introduced an AI-powered app for autonomous trading.
• The broker's Academy provides extensive educational resources for traders, ranging from beginners to advanced levels.

Cons

• The range of trading instruments is limited compared to some competitors, offering mainly stocks, ETFs, a large selection of options, and cryptocurrencies.
• eToro USA was fined $1.5 million by the SEC in 2024 for unregistered crypto offerings.
• Average fees may reduce active traders' profit margins.

Visit eToro USA Read Review

Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk. This site is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD.

Why Trade With NinjaTrader?

4.5/5

NinjaTrader consistently satisfies active futures traders with its low-cost service and high-quality analysis tools. It offers superior charting features, including hundreds of indicators and over 10 chart types.

Pros

• In July 2026, NinjaTrader introduced CME Group Single Stock futures. This allows traders to take directional positions in major U.S. companies such as Nvidia and Amazon without using options.
• Nano contracts, which are one-hundredth the size of standard contracts, let traders adjust positions precisely and manage risks on a smaller scale. This is beneficial for those who build positions gradually.
• The market replay feature lets you download tick-by-tick historical data, go back to any date, and interact with it as if trading live. It's useful for strategy testing and real-world practice.

Cons

• NinjaTrader was fined $250,000 in 2025 for not implementing a sufficient anti-money laundering program and for supervisory failures.
• NinjaTrader was bought by Kraken in May 2025. Although it still operates independently, traders concerned about long-term stability may worry about changes in the platform's direction and pricing under new ownership.
• Intraday margin requirements can rise up to four times in the 15 minutes before major economic news and remain high for several minutes after volatility decreases.

Visit NinjaTrader Read Review

Why Trade With FOREX.com?

4.3/5

FOREX.com is a top-tier brokerage suitable for forex traders of all skill levels. It offers more than 80 currency pairs, has small spreads starting from 0.0 pips, and features low fees. The platform provides powerful charting tools that include over 100 technical indicators and multiple research aids.

Pros

• FOREX.com has over 20 years of experience with strong regulatory oversight, and has received multiple awards, including second place in our 'Best Forex Broker' awards. As such, FOREX.com is globally reputed as a reliable trading brokerage.
• The in-house Web Trader is a top platform for new traders, featuring a sleek design and over 80 technical indicators for market analysis.
• FOREX.com provides top-tier forex pricing beginning at 0.0 pips. They also offer competitive cashback rebates up to 15% for dedicated traders.

Cons

• US clients do not have negative balance protection, so you can potentially owe more than your original account deposit.
• FOREX.com’s group, GAIN Capital Group LLC, paid a $700,000 NFA fine for improperly managing some client accounts.
• FOREX.com's MT4 platform provides around 600 instruments for trading, which is considerably less than the 5,500+ options accessible on its other platforms.

Visit FOREX.com Read Review

74% of retail accounts lose money with this provider.

Why Trade With Crypto.com?

3.5/5

Crypto.com is ideal for new crypto traders looking to buy, sell, and trade over 400 digital tokens. Its strike options and prediction markets cover financial, economic, election, sport, and cultural events. As a CFTC-regulated platform, it provides a secure choice for US traders interested in binary-style contracts using an easy-to-use app.

Pros

• In 2026, Crypto.com introduced BTC Rewards for the Crypto.com Visa Signature® Credit Card, targeting crypto enthusiasts who trade and spend in cryptocurrency.
• Crypto.com uses a cold wallet system with multi-signature technology and geographic distribution to improve security. This method ensures strong protection of user assets with secure offline storage.
• The Crypto.com Exchange platform provides advanced bots like Dollar Cost Averaging (DCA), Time-Weighted Average Price (TWAP), and Grid Trading bots. Traders can automate strategies, including leveraged perpetual trades, reducing manual work and slippage.

Cons

• Customer support mainly uses chatbots and email, with limited reliable phone support from our testing. This may cause delays in solving urgent issues like account access or transaction problems, which can be frustrating for crypto traders needing quick help.
• The app has high bid-ask spreads on many coins, which can be expensive for traders using market orders. Wide spreads mean the buying price is significantly higher than the selling price, reducing profits, especially in low-volume trades.
• Fees apply to crypto and fiat withdrawals, which can be significant for active traders making smaller transfers. The minimum withdrawal limits are also high, limiting flexibility in managing smaller portfolios or immediate liquidity needs.

Visit Crypto.com Read Review

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How We Chose the Best Brokers for Trading Penny Stocks

To list the top brokers for trading penny stocks, we evaluated over 200 key metrics across our extensive brokerage directory.

Our analysis focused on critical factors such as trading fees, platform usability, and access to niche markets like penny stocks.

After in-depth hands-on testing of each broker’s software, we assigned overall scores and ranked them to help traders find the best platforms for trading penny stocks.

What to Consider When Searching For a Top Penny Stock Broker

Important factors to think about when selecting a platform for penny stock trading include:

Regulatory Status

Whether considering a bog-standard stock brokerage or specialist firm like a penny stock broker, it’s important to check that the firm you choose is licensed to deal by a reputable financial regulator, such as the SEC in the US, FCA in the UK, or ASIC in Australia.

This can stop a fraudulent operator from running off with your money and personal details. It can also shield you from bad trading practices, like poor price transparency and inadequate customer service.

Unfortunately, OTC and ‘pink sheet’ trading involves far less oversight than share dealing on major exchanges. This in turn can attract a higher proportion of scam operators versus the broader brokerage industry, meaning penny stock traders should be especially vigilant.

Range of Penny Stocks

We’ve found the spectrum of tradable penny stocks can differ substantially across trading platforms.

For instance, while Interactive Brokers provides access to a huge number of exchange-listed shares, it provides limited exposure to OTC markets.

By contrast, Firstrade is renowned for being an excellent gateway to OTC stocks, although it only allows the purchase and sale of US companies.

In addition, some brokers don’t provide direct access to penny shares themselves. Admiral Markets, for instance, only allows traders to speculate on these small caps through contracts for difference (CFDs), a form of financial derivative.

Resources

All brokers try to attract customers with extra resources and tools that effectively inform their trading decisions. This can range from general guides to share trading, all the way through to specific research on penny stocks.

In our tests, we discovered that Interactive Brokers provides quality market analysis for penny share traders, though largely speaking, finding information on smaller companies is typically more scarce than research covering large-cap businesses.

Trading Costs

As with any broker, trading costs can differ significantly amongst these penny stock specialists. Traders need to keep a close eye on transaction fees, bid and ask spreads, account management fees, and trading inactivity fees.

When it comes to penny stocks, many brokerages charge low trade commissions. Some – like Firstrade – even offer zero commission on trading this asset class.

Expert take: Trading OTC penny stocks usually incurs higher transaction costs than dealing in those listed on large exchanges.

Trading Platform

It’s important to find a broker whose platform you like to use. Easy navigation, a wide range of tools, and reliable execution speeds are essential features.

What does or doesn’t make a good trading platform can be a very individual thing. So it can be a great idea to ‘road test’ a broker’s software with the use of a demo trading account before one begins trading for real.

IG is well known for its easy-to-use trading interface and rapid execution speeds. Meanwhile, Interactive Brokers is a popular choice with more experienced investors thanks to its more advanced platforms (like IBKR Desktop).

Expert take: If I’m hoping to trade penny stocks ‘on the go,’ I would ensure that the broker I use also provides a top mobile trading app.

FAQ

What Is a Penny Stock?

Broadly speaking, a penny share is one that changes hands at below £1 in the UK, or $5 in the US.

Penny shares can deliver substantial capital gains if their earnings take off. Tesla, Ford and Monster Energy are a few former penny stocks whose stratospheric price gains have made investors rich over the years.

However, they are also high-risk – you could lose any money you invest.

What Is a Penny Stock Broker?

Major global exchanges (like the London Stock Exchange (LSE) or New York Stock Exchange (NYSE) offer a wide spectrum of penny shares that investors can typically buy or sell with standard trading platforms.

However, strict listing requirements mean that a considerable number of these small-cap companies are excluded from highly regulated exchanges. Instead, their shares are traded on smaller exchanges and/or in over-the-counter (OTC) markets.

Many penny stock brokers specialize in helping traders reach these harder-to-reach businesses.

Should I Trade Penny Stocks?

Trading penny stocks is a high-risk trading strategy due to frequent market volatility and the greater chance of company failure.

What’s more, the world of penny shares is replete with so-called pump-and-dump schemes, price manipulation by bad actors and bogus companies.

For these reasons, dealing in these smaller companies should be avoided by novice investors. Traders in these small-cap securities should also put in place proper risk management strategies (like using stop loss orders and take profit instructions).