Last updated: 26 January 2017
There are many discount online brokers to chose from and it is important you find the right broker to buy stocks online with – one with low commissions, fast executions and the ability to trade stocks under $1 is absolutely essential.
Generally, an individual cannot buy stocks directly from companies, so it is important to have a good online stock broker.
Here is our selection criteria for choosing the right broker to buy stocks online with:
- Low commissions (under $5 per round trip trade)
- Fast executions – especially important for penny stocks as they can be fast moving
- Ability to trade pre-market (not essential, but can be helpful)
- Access to all markets, including NYSE, NASDAQ, AMEX, OTCQX and Pink Sheets
- Ability to trade penny stocks under $5 (some brokers do not allow stocks under $1 to be traded)
- Free (or discounted) Level 2 stock quotes (not essential but very helpful – third party level 2 quotes can be purchased)
- Access to live streaming stock related news (helpful but not essential – there are many third party providers of stock related news). This helps you find the best penny stocks to watch.
- Access to margin (while we generally advise to limit the amount of margin used at any one time, having the ability to trade on margin is very helpful in some circumstances)
- Stable, reliable and fast web-based and/or standalone trading platform, preferably with mobile phone access
- Friendly & helpful customer service
- The ability to deposit and withdrawal funds without restrictions
- For residents outside of the USA, you will need to find a broker who will allow international clients to sign up for an account
Many of the brokers you will come across will offer you some, but not all of the above. There are some criteria that are absolutely necessary, such as fast trade executions, low commissions and a stable, reliable trading platform.
Level 2 quotes are also critically important when you buy penny stocks online, as they assist you in knowing what penny stocks to buy at the right time, however there are many third parties that offer real-time level 2 quotes.
Our preferred Stock Broker is….
Everyone who wants to buy stocks online will have their own preferences, based on what’s important to them, however here are our three preferred online discount penny stock brokers to buy stocks online with:
- Interactive Brokers
- TD Ameritrade / ThinkorSwim (different brokers but same owners)