Low-priced securities cannot be held in custody at the Depository Trust Company (DTC) and, may carry pass-through charges that can be as high as 10 times the value of the trade itself. Non-DTC eligible securities cannot be cleared electronically. Exchanges such as NYSE and Nasdaq require DTC-eligibility, but it’s up to you to determine the eligibility of penny stocks trading on the OTC Bulletin Board and OTC Markets Group (a current list can be found on the ).
Our criteria for putting a broker on this list include access to the OTC markets, low account minimums, $0 or flat rate per-trade commissions with no additional charge for low-cost stocks. We also look for real-time margin calculations so you're aware of your buying power. While many brokers offer penny stocks, some add a surcharge to stocks that trade below a certain dollar level or volume restrictions that bump up the price for large orders. Many brokers are charging commissions for trading penny stocks in spite of cutting commissions to $0 on exchange-traded stocks and ETFs.Best brokers for penny stocks:
Interactive Brokers
- Account Minimum: $0.00
- Fees: $0.00 commissions for equities/ETFs available on IBKR’s TWS Lite, or low costs scaled by volume for active traders that want access to advanced functionality such as order routing. $0.65 per contract for options on TWS Lite; that is also the base rate for TWS Pro users, with scaled rates based on volume. $0.85 per contract for futures.
Interactive Brokers' very low per-share trading commission of $.005 ($1 minimum per trade) and up-to-the-split-second real-time margin calculations are ideal for penny stock traders. IBKR Lite clients can trade penny stocks for $0.
- Low commissions, maximum 1% of trade value for IBKR Pro, $0 for IBKR Lite
- Streaming real-time data, including account information
- IBot, IB’s AI-powered online assistant, can help find features
- Data streams on only one device at a time
- Traders Workstation puts up a steep learning curve
- IBKR Pro customers are charged fees to trade, though they are low
Charles Schwab
- Account Minimum: $0
- Fees: $0 for stock/ETF trades, $0.65 per contract for options
- Excellent screeners available on StreetSmart Edge
- Free access to a wide array of news feeds
- Customization and personalization options on StreetSmart Edge are terrific
- The sheer number of features and reports available can feel overwhelming
- Schwab maintains transaction history for just 24 months online
- Schwab does not sweep uninvested cash into a money market fund
Fidelity Investments
- Account Minimum: $0
- Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trades
- Access to Active Trader Pro for all customers
- Excellent trade executions on listed stocks
- Stock screeners help you find potential trades
- Non-U.S. citizens and residents cannot open an account
- Finding a tool may require using more than one platform
- Data must be manually refreshed on the website
TradeStation
- Account Minimum: $0
- Fees: $0 stocks and ETFs. Options are $0.60/contract and futures are $1.50/contract ($0.50 for micro e-minis)
- Flexible and customizable real-time market scanners
- Excellent charting and technical analysis capabilities
- Per-share fees drop as you trade more shares
- Steep learning curve for setting up trading strategies
- Multiple pricing plans offered may be confusing
Regarding the other brokers we surveyed, Robinhood does not allow OTCBB trades. Ally Invest apply surcharges to trades of stocks of under $2 per share and SogoTrade for trades under $1 per share, which can significantly add to your trading costs.
Interested in making penny stocks a part of your portfolio? Check out our guide to trading penny stocks before you jump in.
Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read. Supporting documentation for any claims, if applicable, will be furnished upon request.
There is an Options Regulatory Fee that applies to both option buy and sell transactions. The fee is subject to change. See for details.