Best Penny Stock Brokers

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Andrew Hayward

You have many different trading platforms to choose from when it comes to trading penny stocks. So, my guide will tell you about some of the best penny stock brokers in the US, and what you need to know about investing in penny stocks before you start trading.

Also consider: Best Stocks and Shares to Buy Now

Top penny stock brokers for May 2023

Browse my list of the best penny stock platforms for US investors below

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Interactive Brokers

You can trade penny Stocks on Interactive Brokers, but you will need to additional permissions to be granted access to trade penny stocks. Before you can trade penny stocks, you must request penny stock trading permission in your account, by selecting penny stocks in the trade configuration settings.

Interactive Brokers have placed themselves in the market as an app that caters to those who want international and advanced trading capabilities. A host of extremely useful tools and resources round-out this impressive app.

In terms of fees, Interactive Brokers charges low commissions with no added spreads, ticket charges, platform fees, or account minimums. For new traders this lack of an account minimum is great as it lets you test the waters and explore trading and indeed the app without taking any outsized financial hit.

eToro logo


Whilst eToro is primarily an online Trading Platform, they also provide users with a robo-advice service.

Whilst eToro does not offer penny stocks trading,  it does offer extensive choices for traders in stock trading.

In 2010 eToro launched OpenBook, the first social trading platform in the world, revolutionizing trading by making it possible for traders to imitate the trading of successful traders using CopyTrader.

Following on from the success of CopyTrader, eToro introduced CopyPortfolios in 2016, a series of managed portfolios that are professionally managed by eToro’s investment experts. The main focus for CopyPortfolios is to continuously rebalance the portfolios, using powerful machine-learning engines in order to maximize returns while simultaneously minimizing risk as much as possible.

When it comes to your attitude to risk, eToro offers a Risk Score, a feature that allows investors to manage their risk and understand the risk undertaken by other traders they are considering copying.

One of the best features of eToro is their lack of platform and management fees, this coupled to the fact that you can expect to pay 0% commission on stock investment makes for a great deal. The only fees to be aware of is the inactivity fee of $10 per month which is charged after one year in inactivity. There are also low withdrawal fees of $5.

Firstrade logo


Another great online discount broker is Firstrade, with free commissions on trades—including penny stocks—and a $0 account minimum.

The platform has a huge variety of different penny stocks; has no charges for buying regular stocks, penny stocks, over-the-counter bulletin board (OTCBB) stocks, and pink sheet stocks; and only minimal charges for selling stocks.

The Firstrade mobile app is an extremely easy-to-use and robust platform, which makes navigating its many useful features and filters a breeze.

Tradestation logo


TradeStation is another fantastic broker that lets you trade penny stocks.

The platform is renowned for its speedy execution of trades and for this reason, is the best platform for active traders looking to deal with penny stocks.

Better yet, there is no minimum deposit required when you first open an account, and the pricing model is extremely appealing.

Also, new users, upon signing up, are given access to several training resources, including webinars, market insights, and the platform’s vibrant community-driven forums. Best of all is the simulated training option, where you can safely test out trading strategies in real-time or using historical data.

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TD Ameritrade logo

TD Ameritrade

If you’re looking for a well-designed platform that is easy to use and provides a smooth user experience then TD Ameritrade may be the one for you.

The broker offers penny stock trading, though you may find trading fees to be on the higher side as the fee for trading OTC penny stocks is $6.95 per trade.

On the other hand, the TD Ameritrade platform offers an incredible range of tools and functions for serious traders. And if you want your platform to combine analysis tools and research materials then this should be your go-to.

It should be noted that in 2020, TD Ameritrade merged with Charles Schwab and, as such, it is not certain what, if any, developments are likely regarding the TD Ameritrade platforms.

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Charles Schwab logo

Charles Schwab

A great broker for trading penny stocks, and a great all-around choice for trading in general, is the Charles Schwab platform.

This is a great trading app, and Charles Schwab is a well-established leading US brand that has millions of satisfied customers. Thanks to its top-class insight tools, zero commissions, and no account minimum, the app is a great choice for all sorts of trading.

That said, it also has a great choice of penny stocks trading on multiple exchanges, including over-the-counter (OTC) and pink sheets.

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Robinhood logo


Robinhood is a new brokerage platform that puts an emphasis on being user-friendly and, for that reason, is a great choice for new investors looking to trade penny stocks.

The Robinhood app is free and offers customers commission-free trading in stocks, ETFs, options, and alternative investments, including cryptocurrency.

This streamlined app delivers a smooth and easy-to-use experience and offers a great choice of penny stocks.

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Fidelity Investments logo


One of the great things about trading penny stocks on Fidelity’s platform is the low charges.

Indeed, the broker has no trading fees involved when you invest in penny stocks, and you aren’t required to make a minimum deposit when you open your account.

Better yet, you won’t be charged an inactivity fee if you don’t use your account for some time, so if you’re more of a casual investor, this could be the right account for you.

Also, there is extra functionality thanks to the Fidelity Stock Screener, a search tool that lets users search for stocks that trade on OTC exchanges and comes with other useful search filters that help you find what you want.

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etrade logo


E*Trade is a pioneering provider of online brokerage services and an excellent choice for trading penny stocks.

The E*Trade brokerage app is packed with useful tools and features and provides a streamlined desktop and mobile trading experience.

It features some of the very best research tools along with a low-cost pricing model and zero commission on all penny stocks, excluding OTC, with no account minimum.

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Webull logo

Webull Trading

Webull is another broker that offers access to penny stocks.

There is no minimum amount required to open an account with Webull. Also, this broker offers a simple and clear pricing model and charges an annual margin rate from 3.99% to 6.99%.

Signing up is fast and easy, and new users have a chance to receive a signup bonus.

Powerful analysis tools complete the Webull offering and make for a solution that is ideal for new to intermediate traders.

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What are penny stocks?

A penny stock is a company that trades for less than $5 a share, or a similar low unit price in foreign countries, such as the UK.

Just because these penny stock companies have low share prices, it doesn’t mean that all of them perform poorly – many drive the price down by issuing new shares as the price climbs.

Since shares represent control over a company, a business can prevent itself from being taken over by a majority shareholder by issuing new shares.

However, some penny stock companies can be smaller and less frequently traded, which can sometimes result in less liquidity. That means you could potentially have a harder time offloading shares when you come to sell them.

For these reasons, it’s important that you keep an eye on the liquidity of a penny stock company if you want to invest in it. Wider bid spreads—the value by which the asking price of shares exceeds the bidding price—are typically more common with penny stocks thanks to this liquidity.

In the US, some penny stocks trade on large exchanges such as the New York Stock Exchange (NYSE). The vast majority, however, trade via over-the-counter (OTC) transactions through the electronic OTC Bulletin Board (OTCBB) or through the privately-owned OTC Markets Group.

Some of the best penny stocks are household names, such as GameStop, while others you may not have heard of, such as Borr Drilling Ltd or ADMA Biologics Inc.

You can find out more about some of the best penny stocks you should keep an eye on later in my guide.

What risks are involved with penny stock trading?

Penny stock trades are usually considered high-risk investments compared to other, more traditional forms of investing.

Lower liquidity and higher volatility can cause investors to potentially lose their entire investment due to swings in stock prices.

This is why penny stock traders will often use stop-loss limits on their orders. Stop-loss orders allow you to input a particular value for how low you’re willing to let your investment fall in value. If your penny stock then reaches this value, it will automatically be sold to limit your losses.

You should also keep in mind that there’s typically less information available about penny stock companies. Unlike a well-established blue-chip company, it can be a lot harder to find reliable industry news or corporate performance information about the company.

Without adequate information about a company, you may find it difficult to gauge how its price could move on the stock market. This lack of insight over possible upcoming important milestones that could influence the stock price, like the release of a new product, make it harder to predict developments.

As mentioned, penny stocks tend to have lower liquidity, which can open them up to manipulation. For example, the “pump and dump” scheme involves tricking investors into buying large quantities of shares, which drives the price up on the stock market, attracting more investors. Once the stock price has been artificially increased, the scammer will then sell all their shares for a good price.

The different ways you can invest in penny stocks

When you first think of investing in penny stocks, chances are the first thing that comes to mind is the buying and selling of shares on the stock exchange.

Although, you may be surprised to hear that there are several different ways you can invest in both US and international stocks. So, continue reading my guide to find out the various ways you can invest, and which would best suit you.

Purchase shares individually

As the name suggests, purchasing shares individually involves buying particular penny stocks through your broker.

You can then sell these shares at a later date when the price has increased and, by doing so, leave with a nice little profit. Or, if the company offers dividends, you can hold onto your penny stocks and rely on dividend payments.

However, it’s worth noting that not all penny stock companies offer dividend payments. This is primarily due to their smaller size and lower revenues, or if it’s a larger company then they will most likely be undergoing restructuring or possible financial issues.

Gain exposure through a fund

You can also get exposure to a variety of different penny stocks through a fund.

A fund is a type of pooled investment in which money is accumulated from investors and subsequently reinvested in many different companies.

Funds are usually overseen by fund managers, who are typically experts in their field. Since fund managers will try to spread risk by diversifying funds, you are gaining instant diversification by investing in one.

The share value of the fund then depends on the performance of its constituent companies. If the value of its investments increases, so does the value of the fund.

Much like trading individual shares, you can either invest in a fund, wait until the price has increased, and then sell your units, or you can hold onto them and rely on dividend payments.

You typically have two options when you’re looking to invest in a penny stock fund: you can either find a fund that includes your desired company or one that specifically tracks penny stock companies.

Some examples of specific penny stock funds could be the iShares Micro-Cap ETF or the First Trust Dow Jones Select MicroCap Index Fund.

You should keep in mind that when you invest in a fund, you may face higher costs and charges. And, since penny stock funds are usually actively managed, you are compensating the work of the fund managers who are overseeing the fund.

What is the best way to invest in penny stocks?

The best way to day-trade penny stocks will depend on what your reasons for investing are, and also how experienced you are in trading in general.

For example, if you’re still new to penny stock trading, you may want to consider gaining exposure to them through a fund. Conversely, if you are comfortable with trading and have the time to devote to the rather fast-paced nature of penny stocks then you may prefer to invest directly in penny stock shares.

Similarly, if you are investing for an income rather than growth over a longer period of time, individual shares or funds may be the option for you.

How to start investing in penny stocks

So, now that you know exactly what penny stocks are, and some of the best trading platforms available, you may be wondering how you actually go about day-trading penny stocks.

The process is simple enough, so continue reading my guide to find out how to invest in penny stocks.

1. Decide which broker you want to use

First off, you need to decide which penny stock trading brokers you want to open a trading account with.

Using the information above in my guide, you ideally want to compare the different penny stock trading platforms and figure out which best suits your needs.

For example, when beginners buy penny stocks, they may want to consider trading platforms that offer in-depth research, analysis, and trading tools.

Or, if you were planning on trading large volumes of shares, you may want to think about opening an account with the cheapest penny stock broker with lower trading fees.

2. Set up an account with your broker

Now that you’ve decided which penny stock broker you want to use, the next step is opening an account with that broker.

This process is simple enough—usually you will be required to input your information, and potentially upload any relevant financial documents the penny stock broker needs to confirm your identity.

3. Make a deposit to your brokerage account

Now you’re ready to make a deposit to your penny stock broker account.

Again, this is a simple enough process. All you need to do is input the value of the money you wish to deposit and make sure it enters your account, typically using a credit or debit card.

Be mindful of inflation

One thing you should be wary of is how much money you deposit into your broker account.

You ideally only want to deposit the amount of money you are planning on investing in penny stocks.

When you deposit money into an investment account, it’s unlikely that you will earn interest on any uninvested money. And, with inflation currently so high, there’s a chance your savings’ purchasing power will be eroded in real terms.

You should also only deposit and invest what you can afford. If you end up losing money, you may end up unable to pay your bills or afford your current lifestyle.

4. Decide how you want to invest in penny stocks

Next, you’ll need to figure out how you want to invest in penny stocks in the first place.

If you’re still a beginner to penny stock trading, you may want to consider either trading shares traditionally, or gaining exposure to them through a fund.

5. Make the investment

When all of the above steps have been followed, you’re finally ready to start trading on penny stock markets.

Simply search for the company or fund you wish to invest in, decide how many shares you’re going to buy, and then make the purchase.

The work doesn’t stop when you buy penny stocks though – you need to ensure you keep an eye on any price fluctuations with your penny stocks.

You may want to set up a stop-loss limit on your position to ensure that, if prices drop too much while you aren’t monitoring your order, you won’t lose too much money.

Penny stocks vs regular shares: which are better?

Now that you know what penny stocks are and how to invest in them, you may be asking yourself: what are the benefits of trading penny stocks over regular shares?

Well, like most things, penny stocks come with benefits and disadvantages. Continue reading to discover what these are, and the big differences between penny stocks and traditional shares.

Pros of penny stocks

Typically low cost

As the name suggests, penny stocks typically trade for lower prices than other investments.

This means that you don’t have to put forward as much initial capital to get on board and buy penny stocks as you would with a traditional blue-chip company.

This can be great for beginner investors—large companies with high share prices can often seem daunting for newcomers.

Chance of higher returns

Penny stock companies can be smaller and less established than their traditional counterparts.

This attracts investors, as it brings the opportunity for higher returns if the company does indeed become larger.

If the company you invest in ends up becoming a higher-valued business, you could turn a profit on your initial investment if share values increase by a decent amount.

Cons of penny stocks

There is sometimes less information available

Some of the penny stock companies you may be considering investing in could have less information available to investors.

This is because many of these penny stock companies are lesser-known compared to blue-chip companies.

You may find it tricky to find historic information or corporate earnings figures surrounding a penny stock company, which could make it difficult to properly predict penny stock prices.

Less liquidity

Many penny stock companies are less established or known to personal investors. This can often result in lower liquidity for investors since there are fewer people to trade stocks.

Investors may find themselves “locked in” to a particular penny stock if they can’t sell them due to low liquidity, and you could end up losing money rapidly.

Can be unpredictable

Since there is typically more volatility and less liquidity involved with penny stock companies and the stock exchanges they’re listed on, you may find it difficult to predict the prices of these companies.

There may be more fraudulent activity involved with penny stocks too, such as pump and dump schemes, which can also influence share prices.

While retail investors could make profits by trading stocks, there’s also a chance that they could lose large sums of money just as quickly.

Penny Stocks FAQs

Can I trade penny stocks in the US?

Yes, you can trade penny stocks in the US. Before opening a trading account with penny stock brokers, you first need to ensure that it operates within the US.

What’s the best penny stock broker for beginners?

The best penny stock broker for beginners in the US will usually be one that offers lots of research and educational materials. TD Ameritrade and Interactive Brokers are two trading platforms that both offer access to great research suites.

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