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Best Brokers for Penny Stock Trading 2023

September 26, 2023

The best online brokers 2023 review, our 13th annual, took three months to complete and produced over 40,000 words of research. Here's how we tested. Our editorial content is independent and unbiased; here's how we make money.

Penny stocks are shares that trade for under $5 and trade over the counter, or OTC, though there’s not really an industry-wide definition for them.

Penny stocks are risky investments. They’re often illiquid — meaning difficult to quickly convert into cash — and have loose financial disclosure requirements, which makes them subject to scams and market manipulation. Their low prices, however, can tempt some investors with the possibility of very high returns.

If you’re one of those investors, we researched which brokers are best for buying OTC stocks while conducting our 2023 Annual Stockbroker Review, in which we compared the pricing and trading platforms of 17 brokers. Our top pick for 2023, Fidelity, combines zero-commission penny stock trading with excellent trading tools and research capabilities.

Best Online Brokers for Trading Penny Stocks

Here are the best brokers for trading penny stocks, based on 29 variables.

  • Fidelity
    - $0 OTC trades
  • Firstrade - $0 OTC trades
  • TradeStation
    - $0 per OTC trade (up to 10,000 shares)
  • TD Ameritrade - $6.95 per OTC trade
    - $6.95 flat fee per OTC trade
5/5 Stars 5.0 Overall

$0 OTC trades

Minimum Deposit$0.00
Stock Trades$0.00
Options (Per Contract)$0.65

Fidelity is a value-driven online broker offering $0 trades — including penny stocks, unlike many of its competitors. Combined with industry-leading research, excellent trading tools, an easy-to-use mobile app, and comprehensive retirement services, Fidelity is a winner for everyday investors. Read full review

  • Excellent research and mobile app
  • Top-notch education
  • Decades of reliable client service
  • No dedicated mobile app for active trading
Visit Site

Trade at Fidelity. 1

4.5/5 Stars 4.5 Overall

$0 OTC trades

Minimum Deposit$0.00
Stock Trades$0.00
Options (Per Contract)$0.00

Firstrade offers no-commission stock and ETF trades, including penny stocks. Though it trails industry leaders in some core categories, it’s a particularly attractive option for Chinese-speaking investors and scored well for ease of use in our 2023 annual review. Read full review

  • Excellent for Chinese-speaking investors
  • Has bolstered its options education and trading capabilities
  • Easy-to-use mobile app
  • Trading platform and tools trail the best brokers for 2023
  • Investor education is thin
4/5 Stars 4.0 Overall

$0 per OTC trade (up to 10,000 shares)

Minimum Deposit$0.00
Stock Trades$0.00
Options (Per Contract)$0.60

When using TradeStation for trading OTC penny stocks, the cost under the TS Select and TS Go pricing plans is $0 per trade up to 10,000 shares ($0.005 per share thereafter). TradeStation ranked among Best in Class in our Commissions and Fees and Investment Options categories for 2023. Read full review

  • Web trading platform is well thought-out
  • TradeStation Crypto is powerful and intuitive
  • User experience can be frustrating
  • No third-party fundamental research
Visit Site

Trade Stocks, Options, Futures, & Crypto.

TD Ameritrade
5/5 Stars 5.0 Overall

$6.95 per OTC trade

Minimum Deposit$0.00
Stock Trades$0.00
Options (Per Contract)$0.65

Despite charging $6.95 for penny stock trades (regular stock trades are $0), TD Ameritrade offers a comprehensive selection of trading tools through the thinkorswim trading platform. While not our top pick for trading penny stocks, TD Ameritrade took our annual award for best trader app and placed second overall among top brokers. Read full review

  • Has a platform for any type of investor
  • Wealth of research
  • Excellent and thorough educational content
  • Other brokers have friendlier design and writing
  • No fractional shares or crypto
5/5 Stars 5.0 Overall

$6.95 flat fee per OTC trade

Minimum Deposit$0.00
Stock Trades$0.00
Options (Per Contract)$0.65

Though it charges $6.95 for penny stocks, E*TRADE was a top-performing broker for our 2023 annual review and offers standout platforms — including an impressive mobile app — that are feature-rich and easy to use. Read full review

  • Watch lists are the best in the business
  • Smooth mobile navigation
  • High-quality high-net-worth Morgan Stanley proprietary research
  • Cryptocurrencies not currently available
  • Margin rates are high compared to other brokers
Visit Site

$0 Commissions* for ETF, stocks & more


Fidelity won Best Overall in our Annual Stockbroker Review because it has almost everything everyday investors could want while being easy to use and attractively priced. While most other brokers either charge extra for penny stocks or refuse to trade them at all, Fidelity charges nothing. Read full review.

Fidelity mobile app gallery

Fidelity website gallery


Firstrade, like Fidelity and TradeStation, offers $0 penny stock trading. It doesn’t have the breadth of services of Fidelity (few do), but speculative investors may find Firstrade a great fit, as it also doesn’t charge contract fees for options trading. Native Chinese speakers will appreciate Firstrade’s content and Chinese-speaking support staff. Read full review.

Firstrade mobile app gallery

Firstrade website gallery


TradeStation’s TS Select pricing charges $0 for penny stock trading up to 10,000 shares. Beyond that, the charge is a half cent per share, which is the same as what they charge for non-penny stock trades. We also like TradeStation’s extensive desktop application and — if crypto is also your thing — an amazing cryptocurrency platform. Read full review.

TradeStation mobile app gallery

TradeStation website

TD Ameritrade

TD Ameritrade, acquired by Charles Schwab in 2020, runs neck-and-neck with Fidelity in almost every category and excels at stock trading. Though we expect significant changes to both TD Ameritrade and Schwab as the two brokers continue to combine, we do expect TDA’s excellent thinkorswim trading platforms to continue at Schwab. Read full review.

TD Ameritrade mobile app gallery

TD Ameritrade website gallery


E*TRADE, like TD Ameritrade, charges $6.95 for a penny stock trade, which drops to $4.95 after 30 trades in a quarter. Its web-based Power E*TRADE trading platform is easy to use. Penny stock investors who also invest in open-end mutual funds will appreciate the no-fee mutual fund trading, too. Read full review.

E*TRADE mobile app gallery

E*TRADE website gallery

Other brokers tested

In addition to our top five trading platforms for penny stock trading in 2023, we reviewed 12 others: Ally Invest, Charles Schwab, eToro, Interactive Brokers, J.P. Morgan Self-Directed Investing, Merrill Edge, SoFi Invest , Tradier, Robinhood, tastytrade, Vanguard and Webull.

To dive deeper, read our full reviews.

What are penny stocks?

Definitions of penny stocks vary. According to the U.S. Securities and Exchange Commission, or SEC, "penny stock" generally refers to a security issued by a very small company (i.e., micro-cap) that trades at less than $5 per share. The most common penny stocks are companies that trade for pennies per share (less than $1). We think of penny stocks as microcap companies with prices under $5 that only trade over the counter.

What are OTC brokers?

An OTC broker can execute trades of unlisted securities through the “over-the-counter” market. The most popular stocks trade on stock exchanges, and any stockbroker can trade a stock listed on an exchange. But some stocks can also be traded away from an exchange through the OTC market, which consists of broker-dealers who trade directly with each other. You should be very wary of a penny stock broker that only offers penny stocks.

Do you need a broker to buy penny stocks?

You need a brokerage account, but you don’t need the advice of a commissioned stockbroker on which ones to buy or how to buy penny stocks. Brokerage firms act as agents to buy shares on your behalf from any shareholders willing to sell their shares. Brokerages also maintain account records and report required information to the government and other market regulators.

Who is the best broker to buy penny stocks from?

Based on our analysis of top U.S. online brokers, these are the best brokers for penny stock trading:

  • Fidelity
  • Firstrade
  • TradeStation
  • TD Ameritrade

Is it illegal to buy penny stocks?

No. It's perfectly legal to trade penny stocks — or any listed security — with a regulated broker. However, it is illegal to do so with any non-public data (also known as insider information), and penny stocks are more susceptible to insider trading and market manipulation than larger-cap companies.

As an example of the risks involved, penny stocks are often targeted for so-called pump-and-dump schemes. Promoters of such schemes lure in investors with the goal of driving up the share price, before dumping their shares and leaving other shareholders with big losses.

Is it a good idea to buy penny stocks?

Investing in penny stocks shouldn't be entered into without some forethought. Here are five tips to remember when buying penny stocks:

  • They are risky. Penny stocks trade for less than $1 per share for a reason.
  • Be wary of fraud. Watch out for pump and dump schemes.
  • Be mindful of paid promotions. Ignore emails claiming big returns. They are most likely scams.
  • Do your own homework. Thoroughly research the company before you buy.
  • Be aware of costs. Select a broker with flat-fee or $0 trades.

Why are OTC stocks risky?

Companies that trade over-the-counter (OTC) are not as closely regulated as exchange-listed stocks and are subject to less stringent disclosure requirements. OTC companies do not have to meet the same level of disclosure with specific compliance and reporting requirements as companies that trade on the NASDAQ or NYSE exchanges. As a result, OTC stocks are difficult to research, making them risky investments. They are also usually less liquid, making them difficult to trade and subject to market manipulation.

Can you make money with penny stocks?

Yes, you can make money on penny stocks, just as you can with any stock. Penny stocks carry more risk because they are less liquid and often the target of investing scams. Do careful research before investing in a penny stock.

Are penny stocks hard to trade?

Yes, penny stocks are hard to trade, as they are volatile and illiquid, which can have a negative impact on the bid-ask spreads and your ability to get into and out of your positions. Penny stocks are also hard to research, which further compounds the difficulties of making money trading them.

How much does it cost to trade penny stocks?

The cost of trading penny stocks depends on the online broker you use. If you use a broker that offers flat-fee trades instead of per-share rates, trading penny stocks is not expensive. We also recommend avoiding brokers that charge a monthly platform fee, data fees, or monthly minimums, as those costs quickly add up.

Example 1 (flat-fee): TD Ameritrade charges a flat-rate $6.95 per OTC trade, while Fidelity charges $0 (no charge). Thus, your cost to buy OTC shares is just $6.95 and $0, respectively.

Example 2 (per share): Interactive Brokers charges $.0035 per share with a max cost of 0.5% of the trade value. You buy 20,000 shares of penny stock XYZ at a price of $.13 per share ($2,600). 20,000 shares x $.0035 per share is $70, while $2,600 x .5% is $13. Thus, your cost to buy the shares is $13 (0.5% of trade value).

What is the minimum to buy penny stocks?

There is no government-mandated minimum to buy penny stocks, and many U.S. brokers do not have account minimums to open an account or execute a trade. Some brokers, however, may not permit penny stock trading as a matter of policy or because you do not meet that broker’s financial requirements.

Can you get rich off penny stocks?

You might get rich off penny stocks, but it’s very unlikely. There’s a reason why U.S. regulators discourage investors from investing in them. The majority of investors who trade penny stocks lose money and most success stories come from social media, where profit claims are unaudited.

Penny stock scammers will advertise guaranteed or low-risk profits as a way to lure beginner traders into paying for expensive monthly subscriptions or lessons. Chat rooms, newsletters, and live streams are typical subscription offerings that beginners should review with great caution to avoid scams.

How do beginners buy penny stocks?

For beginners who want to buy penny stocks, the following checklist can help improve your experience buying and trading.

  1. Choose a reputable broker: Pick a trustworthy firm to open an online brokerage account.
  2. Analyze details: Research the penny stocks you are considering as much as possible, which will probably be difficult given the lack of reporting required by OTC exchanges.
  3. Don’t get scammed: Avoid penny stocks that are susceptible to market manipulation such as those targeted by "pump-and-dump" schemes, or that you may have heard about on online forums and in chat groups.

phone_iphone Phoning it in

If you're interested in trading on the go, see our picks for best mobile apps for stock trading.

Where is the best place to find penny stocks?

If you want to know where to buy penny stocks or just want to do some research, you can use an online stockbroker; most offer penny stock trading. The best penny stock brokers in our analysis include the following:

  • Fidelity
  • Firstrade
  • TradeStation
  • TD Ameritrade

For additional tools to find penny stocks to trade, you can start with a penny stock screener or market mover list. For example, Yahoo Finance's Trending Tickers and Small Cap Gainers pages both list companies that have jumped in price for the day. Ideal for day trading, the best time to trade momentum stocks is after the market opens at 9:30 a.m. Eastern.

What app can I use to buy OTC stocks?

Based on our research and analysis, here are the best mobile trading apps for buying OTC stocks:

  • Fidelity
  • Firstrade
  • TradeStation
  • TD Ameritrade

Once you find the stock symbol you want to trade and create an order, you may need to fill out a questionnaire and accept a risk disclaimer related to the increased risk that comes with trading stocks that are not listed on a primary venue, such as the NYSE or NASDAQ.

Best brokers for penny stocks gallery

Can penny stock prices be manipulated?

Since most penny stocks have a low number of shares traded each day (low liquidity), prices are easy to manipulate. This makes penny stocks prime candidates for pump and dump investment schemes.

What is a common penny stock myth?

When trading penny stocks, beginners often think they are getting "more for their money" because they can buy more shares in total. This is a myth. Stocks that trade for pennies are far more risky because they trade OTC and do not meet the strict financial requirements to be listed on a major stock exchange like the NASDAQ or NYSE.

Can you buy penny stocks on Robinhood?

Robinhood does not support trading OTC stocks. The only penny stocks supported by Robinhood are stocks that trade on either the NASDAQ or NYSE. If a company listed on the NASDAQ or NYSE trades below $1 for a certain period of time (or fails to meet other minimum financial metrics), it can be delisted and forced to trade OTC. As a result, OTC stocks are risky. 2023 Overall Ranking

Here are the Overall rankings for the 17 online brokers whose offerings we analyze and test, sorted by Overall ranking.

Company Overall Commissions & Fees Research Platforms & Tools Mobile Trading Apps Investment Options Education Ease Of Use Visit Site
Fidelity logoFidelity 5/5 Stars 5/5 Stars 5/5 Stars 4.5/5 Stars 5/5 Stars 4.5/5 Stars 5/5 Stars 5/5 Stars Visit Site
TD Ameritrade logoTD Ameritrade 5/5 Stars 4.5/5 Stars 5/5 Stars 5/5 Stars 5/5 Stars 5/5 Stars 5/5 Stars 5/5 Stars
E*TRADE logoE*TRADE 5/5 Stars 4.5/5 Stars 5/5 Stars 4.5/5 Stars 5/5 Stars 4.5/5 Stars 5/5 Stars 5/5 Stars Visit Site
Merrill Edge logoMerrill Edge 5/5 Stars 4.5/5 Stars 5/5 Stars 4.5/5 Stars 5/5 Stars 4.5/5 Stars 5/5 Stars 5/5 Stars
Charles Schwab logoCharles Schwab 4.5/5 Stars 4.5/5 Stars 5/5 Stars 4.5/5 Stars 4.5/5 Stars 5/5 Stars 4.5/5 Stars 5/5 Stars Visit Site
Interactive Brokers logoInteractive Brokers 4.5/5 Stars 4.5/5 Stars 5/5 Stars 5/5 Stars 5/5 Stars 5/5 Stars 4.5/5 Stars 4/5 Stars Visit Site
Firstrade logoFirstrade 4.5/5 Stars 4.5/5 Stars 4.5/5 Stars 3.5/5 Stars 4.5/5 Stars 4.5/5 Stars 3.5/5 Stars 4.5/5 Stars
Webull logoWebull 4/5 Stars 4.5/5 Stars 3/5 Stars 4.5/5 Stars 4.5/5 Stars 4/5 Stars 3/5 Stars 4.5/5 Stars Visit Site
Ally Invest logoAlly Invest 4/5 Stars 4.5/5 Stars 4/5 Stars 3.5/5 Stars 4/5 Stars 4.5/5 Stars 4/5 Stars 4.5/5 Stars
Robinhood logoRobinhood 4/5 Stars 4.5/5 Stars 2.5/5 Stars 2.5/5 Stars 4.5/5 Stars 3.5/5 Stars 3.5/5 Stars 5/5 Stars
J.P. Morgan Self-Directed Investing logoJ.P. Morgan Self-Directed Investing 4/5 Stars 4.5/5 Stars 4/5 Stars 3/5 Stars 4/5 Stars 4/5 Stars 4.5/5 Stars 4.5/5 Stars
tastytrade logotastytrade 4/5 Stars 4.5/5 Stars 1.5/5 Stars 4.5/5 Stars 4/5 Stars 4/5 Stars 4/5 Stars 4.5/5 Stars Visit Site
TradeStation logoTradeStation 4/5 Stars 4.5/5 Stars 3/5 Stars 4.5/5 Stars 4.5/5 Stars 4.5/5 Stars 3.5/5 Stars 3.5/5 Stars Visit Site
Tradier logoTradier 4/5 Stars 4.5/5 Stars 2.5/5 Stars 3.5/5 Stars 4/5 Stars 4/5 Stars 2/5 Stars 4.5/5 Stars
eToro logoeToro 4/5 Stars 4.5/5 Stars 3/5 Stars 3.5/5 Stars 4.5/5 Stars 2.5/5 Stars 2.5/5 Stars 4/5 Stars Visit Site
Vanguard logoVanguard 4/5 Stars 5/5 Stars 3.5/5 Stars 2.5/5 Stars 3/5 Stars 4.5/5 Stars 3.5/5 Stars 5/5 Stars
SoFi Invest logoSoFi Invest 3.5/5 Stars 4.5/5 Stars 2/5 Stars 2.5/5 Stars 3/5 Stars 3/5 Stars 4.5/5 Stars 4.5/5 Stars Visit Site
View More

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2023 annual review badge

For the 13th Annual Review published in January 2023, a total of 3,332 data points were collected over three months and used to score 17 top brokers. This makes home to the largest independent database on the web covering the online broker industry.

In order to assess the overall trading experience, we test across a wide range of devices and operating systems. Testing was done on devices for both Apple and Android operating systems. For Apple: iPhone XS with the most current iOS. For Android: Samsung Galaxy S9+, 6.2" 4K Super AMOLED (2960x1440) 64-bit Octa-Core Snapdragon 835 Processor 2.7GHz, 6GB RAM 6.2" with the most current operating system.

Our research team meticulously collects data on features with particular importance to penny stock traders, such as trading costs, availability of flat-fee trades, ease of platform and app use, and resources for researching a stock. In total, we evaluate nearly 200 variables for each broker. All research, writing and data collection at is done by humans, for humans. Read our generative AI policy here.

As part of our annual review process, all brokers had the opportunity to provide updates and key milestones and complete an in-depth data profile, which we hand-checked for accuracy. Brokers also were offered the opportunity to provide executive time for an annual update meeting.

Our rigorous data validation process yields an error rate of less than .001% each year, providing site visitors quality data they can trust. Learn more about how we test.

About the Editorial Team

Sam Levine, CFA, CMT
Sam Levine, CFA, CMT

Sam Levine has over 30 years of experience in the investing field as a portfolio manager, financial consultant, investment strategist and writer. He also taught investing as an adjunct professor of finance at Wayne State University. Sam holds the Chartered Financial Analyst and the Chartered Market Technician designations and is pursuing a master's in personal financial planning at the College for Financial Planning. Previously, he was a contributing editor at BetterInvesting Magazine and a contributor to The Penny Hoarder and other media outlets.

Blain Reinkensmeyer
Blain Reinkensmeyer

Blain Reinkensmeyer has 20 years of trading experience with over 2,500 trades placed during that time. He heads research for all U.S.-based brokerages on and is respected by executives as the leading expert covering the online broker industry. Blain’s insights have been featured in the New York Times, Wall Street Journal, Forbes, and the Chicago Tribune, among other media outlets.

Carolyn Kimball
Carolyn Kimball

Carolyn Kimball is managing editor for Reink Media and the lead editor for the Annual Review. Carolyn has more than 20 years of writing and editing experience at major media outlets including NerdWallet, the Los Angeles Times and the San Jose Mercury News. She specializes in coverage of personal financial products and services, wielding her editing skills to clarify complex (some might say befuddling) topics to help consumers make informed decisions about their money.

Steven Hatzakis
Steven Hatzakis

Steven Hatzakis is the Global Director of Research for Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. Steven is an active fintech and crypto industry researcher and advises blockchain companies at the board level. Over the past 20 years, Steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative.

1 Fidelity Sell orders are subject to an activity assessment fee from $0.01 to $0.03 per $1,000 of principal. Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read Characteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.

E*TRADE: *Other fees apply.

*Webull Disclaimer View Disclaimer.

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Marketing Agent (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. tastytrade was previously known as tastyworks, Inc.

Reink Media Group is compensated if you access certain of the products or services offered by eToro USA LLC and/or eToro USA Securities Inc. Any testimonials contained in this communication may not be representative of the experience of other eToro customers and such testimonials are not guarantees of future performance or success.