Best Discount Brokers
Searching for the Penny Stock Broker continues. . .

Only some of the best discount brokers are penny stock friendly  

This site is for the penny stock trader, which is why I include the following vital information. . .

The Discount Brokers  I put 3  stars "***" in front of are the ones that are penny stock friendly.

The bold print I include under some of the brokers expose the extra fees and restrictions that they place on penny stock trading.


My Broker List concentrates on just trading stocks

As you view this list, you are familiarizing yourself with the services offered for those persons who just want to trade stocks (specifically penny stocks) - without attention to IRA accounts, checking accounts, credit cards, etc. 

If you are interested in any of these extra services, then do further research from a narrowed down "Best" list.  Determine the extra services you desire and compare the charges for top brokers that best meet your trading goals. 


Best Discount Brokers - The List

Okay, ready?  Here is my list of the top discount brokers


Charles Schwab (High End Discount Broker)        

  • $8.95 flat for all trades.
  • $25.00 broker assisted trades.           
  • Opening Balance: $1,000
  • Foreign Stock Exchange Fees are negotiable and depend on various individual factors.
  • No mimimums. No maintenance fees.  No inactivity fees or volume requirements
  • Professional trading tools are about average. 
  • The best trading platform is free with 3 trades per month.
  • Streaming Quotes are not free.
  • Free online personal education.
  • Opening an acct is very cumbersome.


My opinion:  I like this broker. In most ways, this broker is penny stock friendly.  

Streaming quotes are not free though, which I feel is a basic necessity that should be free; so, I can't fully recommend this stock for penny stock trading, especially when other brokers exist with comparable commissions that offer free streaming real-time quotes and even level 2 quotes.  Still this broker is reliable and one of the best discount brokers for trading stocks.


***E*Trade  (High End Discount Broker)

  • $9.99 flat for all trades   
  • $34.99 broker asisted trades          
  • Opening Balance: $500 cash Account
  • Excellent trading and research tools
  • Free streaming real-time quotes
  • Maintenance fee: $25 quarterly unless you make at least 2 trades per month or have $5000 equity.
  • Some serious complaints from customers using E*Trade including calls you may receive by brokers wanting you to give them permission to trade on your acct for a fee.  Don't trust any broker to trade for you.  Just say "NO"


My opinion:  I don't like the games e-trade is playing with their clients.  I am searching for discount brokers that leave me alone and do not hinder my trading experience.  

Other than the complaints, the actual services offered are penny stock friendly and appealing even for the penny stock trader - things you would expect out of one of the best discount brokers.  Notice the free streaming real-time quotes too.  

A $5000 minimum equity balance or 2 trades per month is not that difficult if you take trading seriously.  I would not even open an account without a minimum of $5000 to trade.  And executing 2 trades per month is realistic if you don't have the $5000 minimum equity balance.

Definitely one of the best discount brokers.


Scottrade (Discount Broker)

  • $7.00 per trade for stocks        
  • +0.005 per share for all stocks under $1 per share.  
  • $27.00 broker assisted trades       
  • $500 minimum opening balance
  • No maintenance fee. No inactivity fees or volume requirements.
  • Very well respected brokerage.


My Opinion:  One of the best discount brokers but NOT penny stock friendly.


optionshouse.com  (Deep discount Broker)   

  • $3.95 per trade    
  • $0.005 per share for entire order for all stocks $2 and under that are not eligible for options.  
  • Broker Assisted Trades $0           
  • Opening Balance: $0
  • No mimimums. No maintenance fees.  No inactivity fees or volume requirements.
  • Free streaming quotes, but no level 2 quotes.
  • Very nice trading desk with multiple tools for screening and trading stocks
  • Not penny stock friendly.
  • Notice the free broker assisted trades by phone.  Increasingly, discount brokers are offering free or very inexpensive broker assisted trades.


My opinion:  Not penny stock friendly, but still one of the best discount brokers.  If it weren't for the $0.005 per share fee for penny stocks, this would be a great broker to trade with.


zecco.com  (Discount Broker)      

  • $4.95 per trade  
  • $6.95 per trade commission for all stocks under $1
  • Broker assisted trades:  $19.95
  • Opening Balance: 0
  • 0 minimums. No inactivity or maintenance fees or volume requirements.
  • free streaming quotes
  • Intuitive easy to use trading desk with ability to monitor all your trading activity
  • Many complaints about tax statements not being on time and/or mistakes on the statements.  
  • Their new trading desk has serious bugs according to reviews.
  • One complaint about a new rule for penny stocks which increases cost of trading - not sure what that is.


My Opinion: If the problems are cleared up, zecco is a super good option for penny stock trading. Zecco has been battling bad reviews for years though.  Still Zecco is one of the best discount brokers out there.


tradeking.com (Discount Broker)        

  • $4.95 per trade        
  • $0.01 per share for entire order for all stocks under $2 but not to exceed 5% of entire order.
  • In addition, no opening trades for stocks below $0.01 per share.
  • Broker Assisted Trades: $4.95
  • Opening Balance is $0
  • $50 annual inactivity fee if your account balance is under $2,500. 
  • free real time quotes
  • Excellent trading tools


My Opinion: Not penny stock friendly but included among the best discount brokers.


Choicetrade  (Discount Broker)          

  • $5.00 per trade for stocks          
  • $7.00 for all OTC stocks with a sell order conditionThey have a sell order volume requirement not to exceed a certain amount - so you can't sell your entire position all at once if it is over a certain number of shares.    
  • $25.00 broker assisted trades
  • No minimum opening balance
  • No maintenance or inactivity fees
  • They charge huge fees for using their higher end trading platforms.
  • Choicestreamer with real-time quotes is $14.95 per month (web based).
  • Complaints for penny stocks is that they restrict some penny stocks. 


My Opinion:  This discount broker has solid benefits to those not trading penny stocks on the OTC.  In addition, the $14.95 fee per month for the web based trading desk is a drawback.  Even so, this broker is stable and reliable.  Broker fees for regular stocks is great at $5 per trade.  This is one of the best penny stock brokers despite these drawbacks.  Obviously though, this broker is NOT penny stock friendly.


***TD Ameritrade (High End Discount Broker - Penny Stock friendly and very stable.)        

  • $9.99 flat for all trades            
  • $49.99 broker assisted trades.     
  • No minimum opening balance.
  • No maintenance or inactivity fees or volume requirements.
  • Free real-time streaming and Level 2 quotes
  • Excellent trading tools, but difficult to learn how to use.
  • Thinkorswim trading desk is Streaming Real-Time plus Level 2 at same flat $9.99 commission per trade.
  • Very well respected discount brokerage
  • TD Ameritrade is discriminative as to which penny stocks they will allow you to trade.  I believe they do this to protect their clients.  I will say this, their penny stock restriction for the most risky penny stocks has saved many traders from making loser trades.  Yes, you can still trade them, but you have to make the trade by phone. 
  • Broker assisted trades are $49.99 - which is quite high.


My opinion:  Despite the safety restriction 'very risky' penny stocks and the very high broker assisted trades, this is  a very solid brokerage with few complaints.  Trade orders are executed lightening fast.  

Their ThinkorSwim software trading platform is top of the line with free streaming real-time quotes and charts - more than you will need to trade penny stocks as an extraordinary investor.  This trading platform alone at a flat $9.99 fee easily makes my list as one of the best discount brokers.  But the advantages don't end here....

Once you learn how to use it, which is difficult to learn, the platform is better than the rest - stable, quirk free, fast, and loaded with all sorts programs for your stock research and analysis.

TD Ameritrade is probably the best trading experience for the money because of the quality of services for the flat $9.99 fee.  

The trustworthiness of the broker and the stability and quality of its trading platform is unmatched.

Plus, any fees for extra services such as IRA, check writing and credit cards are reasonable.

Definitely one of the best discount brokers. 

I give TD Ameritrade a penny stock friendly recommendation too.


***optionsXpress (Best High End Discount Broker for Penny Stocks and easily one of the best discount brokers - as you will soon see....)

  • $8.95 flat for all trades        
  • Broker Assisted Trades: $0           
  • Opening Balance: $0
  • No mimimum opening balance. 
  • No maintenance or inactivity fees or volume requirements.
  • Excellent customer service
  • Free Streaming Quotes
  • Easy to learn and use fine stock screening, charting and research tools
  • Free acct transfers
  • Free online classes
  • No platform fees.


My Opinion:  This broker has the best of everything for a flat fee of $8.95.  Notice the $0 for broker assisted trades, free streaming quotes, and even free online classes.  

This broker appears to be doing everything possible to win your trust and make sure you have a successful trading experience with them.  

I can't find one negative thing to say about them.  

One of the very best discount brokers and Definitely penny stock friendly for the US financial markets.


***mbtrading.com 

2nd best discount broker acct to use to trade Canadian Stocks or any foreign exchange.       

  • $4.95 per trade for stocks        
  • All OTC (OTCBB and Pink Sheets) stocks: $8.95
  • Broker Assisted Trades:  $4.95                   
  • Opening Balance: $1,000
  • Foreign Stock Exchange Fees $4.95 + 0.01 per share (no ECN or exchange fees) - I cannot find better rates for trading foreign stock exchanges except for Just2Trade.
  • No mimimums. No maintenance fees.  No inactivity fees or volume requirements
  • Professional trading tools including depth and history of trading at different share prices.  
  • Customer reviews show that their Desktop Pro and web based plaforms can be very slow and unstable.
  • Quite a few reviews state that their platforms have bugs - things that go wrong.
  • Trading tools are difficult to learn how to use.
  • Opening an acct is very cumbersome.


My Opinion:  Penny stock friendly with an emphasis on professional trading tools.  In practice though, some platform stability issues need to be cleared up.   This broker, mbbtrading, is definitely one of the best discount brokers.


***Just2Trade 

The BEST Deep Discount Broker for Penny Stock Trading 

Best discount broker for Canadian Stocks and other foreign stocks

  • $2.50 flat for all trades.     
  • $2.00 broker assisted trades. 
  • $2,500 minimum equity balance that must be maintained to use the Just2Trade Trading Desk. 
  • No maintenance or inactivity fees
  • Free real-time quotes and level 2 quotes
  • Just2Trade Trader Desk and Trading tools are stable, best for penny stock traders the Extraordinary way.  Easy to master, with illustrated instructions.  
  • The Just2Trade Trading Desk is intuitive/easy to learn and stable, plus they offer learning tools for their trading desk.    
    Pretty good stock screening tool and real-time streaming charts. 
  • Nice real-time stock watchlist feature with the ability to place trades directly from the watchlist. 
  • The ability to place various logical orders (Many brokers do not have this feature). The logical orders are easy to learn and use on this site - fully explained in easy to understand language by clicking a link.
  • All trade orders are time-stamped to the millisecond - rare among brokers.  Eliminates any broker fraud issues.
  • Trades executed quickly within 1.6 seconds average on stock exchanges. Average for all brokers is about 7 seconds.


My Opinions:

Broker-assisted trades placed directly on a foreign exchange (including Canada) cost $2.50 per trade plus a $75.00 foreign transaction.  

Although the $75 may seem high per trade for foreign stocks.  Remember that mbtrading charges 0.01 cents per share which is the lowest fee anywhere EXCEPT for Just2Trade.  

Consider the huge fees you will pay at even the very low 1 cent per share commission that mbtrading charges for penny stock trading!  For instance only 30,000 shares X .01 cent fee per share = $300 charges.  Or 50,000 shares X .01 cent = $500.  

Which would you rather pay? $75 flat fee for all foreign stock trades as a penny stock trader? or $300/$500 per trade?

If you think 30,000 shares is an extreme number of shares to trade at one time, or would be too rich for your blood, consider that many good penny stocks in Canada (especially mining stocks) trade between 7 cents and 40 cents.  10 cents per share X 30,000 shares = only $3000 round trip.  This is common.  Keep in mind that Canadian Penny Stocks - especially mining shares - are the best you can find anywhere.

Serious complaints regarding account balance errors in 2012 - either plus or minus the actual amount. Not everyone appeared to have this problem with Just2Trade, but if it happens at all, that is not good.

Even so, the temptation is to go with this broker anyway and at least recommend it as one of the best discount brokers and the best deep-discount broker.

Some reviews that GTC (Good-til-Cancelled) orders were, on a particular day, arbitarily cancelled before due date creating some negative reviews for those who had GTC order during that time.


Just2Trade Mr. Christian Baez - Media Dept.

Okay, I was concerned about the complaints because I really like this broker - everything it offers seems a perfect fit for the extraordinary investor.  I really wanted to have no regrets offering this broker to you as right up there among the best discount brokers, with a strong emphasis on penny stocks.

I wanted to know the reasons and extent of such complaints.  So I wrote to Christian Baez of the Media Department for Just2Trade regarding those issues.  


My letter is below followed by a response letter from Mr. Christian Baez.

Start -----------------------------------------------

Dear  Mr. Christian Baez,

I am building an extensive free educational financial website specializing in micro and nano cap stocks called extraordinaryinvestor.com.  

I am presently working on the broker section of the site and am now building a page called, Best Discount Brokers.  Just2Trade is my next and last brokerage to review...

I would not be contacting you at all if I did not truly love the entire concept and tools offered with Just2Trade.  

Just2Trade benefits shine for those who just want to trade stocks... Traders who know how to trade correctly, and are adaptable self-directed traders (without someone holding their hand).  Yet, your research and screening tools, and the ease of use, are a definite plus.

I have been following the progress of your company, Just2Trade, since it launched in 2007.  You have made some really nice improvements in trading tools and ease of use.  You have been ironing out some issues that traders had with your site.

I genuinely desire to make Just2Trade my number one recommendation to independent traders for micro-cap trading, because I think Just2Trade is worthy of that recommendation for the type of trader/investor my site caters to...  

but I need to contact you first regarding a few issues.  

I have some reservations that I hope you will respond to.  After reading the reviews about Just2Trade, I have learned that some acct holders may be experiencing account balance errors and some GTC orders are being arbitrarily cancelled before due date.  These are the most serious deal-breaker issues I have come across, because stability of a trading platform always comes first.

Regarding the acct balance section of the site, one review site author states that it looks messy, whatever that means.  

If the above stated allegations are true, then that is quite serious from a potential customer point of view and from my perspective as a reviewer of your firm to my clients - and must be dealt with.  

I truly believe that the highest quality traders are those who expect a stable/reliable platform on which to trade.

I want to give you the opportunity to respond to these allegations before I include on my site. Please include detailed statistics related to these issues, if that is helpful.  As well, I will include a video link on my site if you so choose to respond in that manner.  

I will afford you every opportunity to be that brokerage that my clients will love and feel confident with for the long term - one of the best discount brokers.

Thank you.

Very Sincerely,

Steven E Thompson

----------------------------------------------- END


The following is Mr. Christian Biaz response to my letter:

Start -----------------------------------------------

From: Christian Baez <chris.baez@successtrade.com>To: 'Steven Thompson' <fute72003@yahoo.com> Sent: Tuesday, April 9, 2013 10:22 AM  Subject: RE: Just2Trade - Media

Thank you for contacting us. Please find below the answers to your questions:

1.    “Regarding the acct balance section of the site, one review site author states that it looks messy, whatever that means.”

Our account balances are broken down into 2 tabs: “Account Value” and “To Trade” (see screenshot). The Account Value will show the previous day and the current (realtime) value of your entire portfolio. The To Trade tab will show your available buying power and will change based on the transaction executed throughout the day.

In order to make your review process easier, I have created a demo account for you which will allow you access all the features currently offered to our clients, please feel free to play around with all the features we provide. Your log in credentials are as follows:

https://trading.just2trade.com

username: XXXX  password: XXXX

Please note that this is NOT a paper trading account.

Our trading platform caters to experienced investors with at least two years of online trading experience and a good understanding of margin accounts. Clients that do not meet this criteria may encounter issues understanding the items shown on his balances and therefore may think of them as “messy”.

2.       “After reading the reviews about Just2Trade, I have learned that some acct holders may be experiencing account balance errors and some GTC orders are being arbitrarily cancelled before due date. “

Last year, one of the market centers we use to route our orders had a major upgrade on their systems which required all GTC orders held with that market maker to be cancelled. Although rare, these situations may occur and clients that had open orders with that market center were properly notified about this. Our GTC orders will remain open for a period of 90 days only.

During 2012, we are only aware of 4 instances that caused balances discrepancies. These events however, were addressed and fixed the same day. Please find below a brief description of these instances:

During early and mid 2012, the morning files we received from our clearing firm contained corrupt data for a number of our margin accounts which caused, in most intances, to have their margin buying power understated. The issue was solved within an hour after market opening and before market opening for the second time around.

The third situation occurred at the end of the year and was caused due to a major upgrade made to our back end systems. One of the daily processes that runs everyday prior to market opening failed to run and was unable to price a client’s portfolio value with current market prices; however, this did not prevent clients from trading on their accounts. The issue was identified by our IT department and fixed during the day.

The fourth instance was caused due to delayed data received from our quote provider for securities listed on the NYSE and OTC exchanges. Data from these exchanges was delayed and thus, causing clients portfolio value not to be updated in realtime if they were holding securities listed on the above mentioned exchanges. Unfortunately, this issue was beyond our control but our quote provider was able to fix the issue by the end of the day.

Let me know if this addresses your questions or concerns. Additionally, if you are going to mention us on your review, please make sure that your readers understand that we do not solicit, promote or give investment advice on any type of securities and all of our accounts are self-directed.

Should you have any additional questions, please do not hesitate to contact me.

Regards,

Christian Baez

Success Trade Securities, Inc.

(202) 466-6890  Office

(202) 466-6895  Fax

----------------------------------------------- END


My Final Opinion regarding best discount brokers status for Just2Trade:  

In light of the response letter from Mr. Christian Baez, the account balance errors are NOT due to instability issues with the Just2Trade platform or its services, but rather are the result of major upgrades.  The errors were fixed the same day - and clients were informed of this.  Same is true for the GTC orders.  

The "balances" section of the broker account does not look messy at all.  Evidently whoever wrote that review did not understand the difference between trade balance and actual account value, which is similar to how TD Ameritrade displays account balances.  

Considering the explanations for the bad reviews, as quoted in the letter, I feel that Just2Trade is Penny Stock Friendly and definitely one of the very best discount brokers despite what other review sites may say.

Keep in mind that just2trade just launched in 2007.  Obviously major upgrades are inevitable for a truly serious and growing broker firm.

just2trade is one of the best discount brokers for the experienced extraordinary investor trading US and Canadian stocks.


Best Discount Brokers - the List

There are many other brokers I could consider to be included on my list.  

The ones I listed I consider the best discount brokers out their.  That is why I list and reviewed them here.  

I wanted you to get an idea of the kind of fees, restrictions, complaints, etc that some of the best discount brokers have.  I want you to get an idea of how some discount brokers are better for penny stocks than others.  

If you know of any other broker that you feel is better for penny stock trading, and think should be included as one of the best discount brokers, feel free to email me and I will review it.  Thanks.

You have now completed this subtopic about the best discount brokers.

We are ready, please continue on this important topic to the next lesson, which is:

Best Penny Stock Brokers (for 2014)