In buying stocks, you will need the help of a licensed stockbroker to acquire securities on your behalf. But, before you go searching in online directories or telephone to contact a broker-dealer, you need to determine first what type of stockbroker will fit your needs and requirements.
Buying Penny Stocks
If you plan to trade in penny stocks, you must pay attention to the penny stock brokers commissions and transactions fees since they will eat away at your returns.
Here is our list of the Top 3 recommended penny stock brokers:
For over 25 years, Scottrade has been the leader in the stock brokerage industry – and it’s for a reason. Scottrade provides a wide range of investment products to meet your investment needs and financial goals. Their fee per stock trade may be higher compared to others, but their service and support is great for beginners and have local branches you can visit to receive help and guidance.
- Commission per stock/ETF trade: $7
- $500 to open account
- 400+ local branches
- Great support for beginner investors
- Open your Scottrade account today
TradeKing is an online broker providing low flat trading fees with no minimum account requirements and no hidden fees. TradeKing online brokerage accounts offer easy-to-use investment tools with low flat trading fees and no minimum account requirements.
- Commission per stock/ETF trade: $4.95
- Low commissions
- No minimums or hidden fees
- Great investor community to watch and interact
- Open a trading account with TradeKing
OptionsHouse is an online stock and options broker that provides a professional trading platform with a flat-rate commission structure for low-priced stock and options trades.
- Commission per stock/ETF trade: $2.95
- Lowest flat-rate commissions
- No account minimums (minimum opening deposit is $1,000 for a cash account and $2,000 for a margin account)
- No surcharges for large orders, penny stocks and extended hours trading
- Open an OptionHouse account
Types of Stockbrokers
Generally, there are four groups of stockbrokers in the market today, from reasonably priced and simple order-takers to the more costly brokers who furnish in-depth financial analysis, recommendations, and advice. You can come across with discount brokers with assistance, online/discount brokers, money managers, and full-service brokers.
Online/discount stockbrokers are merely order-takers. They grant the most economical way to begin investing since there is normally no necessary office visit and no certified advisors or financial planners to assist you on how to pick stocks. You typically interact with an online broker over the phone or via web. The charges are generally based on every transaction or per share basis, permitting you to open an account even with small amount of money.
Stock buying with an online stockbroker lets you purchase and sell options and stocks immediately with just a few clicks on your pc. Because these kinds of brokers will not give you advice on stocks to buy, investment recommendations, or any type of stock tips, you are absolutely on your own. The primary assistance that you will receive is the technical support for online trading program.
Discount brokers on the other hand furnish almost the same services that online brokers give. The significant distinction is that you will have to pay additional fees for extra services or assistance that will be provided to you. The assistance, however, is commonly nothing more than just little details and resources to assist you with your investing.
You can buy cheap stock with full-service brokers who are professionals taking time to assess your situation financially and personally. They look at your way of living, marital status, risk tolerance, personality, time horizon, assets, income, debts, and many more.
Full-service brokers will develop a custom financial plan that suits your investing goals and objectives. They can help in estate planning, retirement planning, tax advice, investment budgeting, as well as other types of financial services like giving tips on how to buy penny stocks, thus the term “full service”.
Money managers work like financial advisors, though they take full prudence and control of your account. They are skilled and experienced investment professionals who normally manage very large investment portfolios of funds. Therefore, they charge hefty overhead and management fees based on the investments they handle and not for every transaction. These services are most beneficial for investors generating substantial earnings, who would rather recompense someone to manage their investments entirely while they are on vacation.
If you are eager to learn about buying stocks without spending a fortune, make sure you sign up for simulator accounts online. These accounts will give you a specific amount of pretend money to practice your investing techniques and systems or to become skilled at trading options and stocks in the stock market.