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6 Best Brokers for Penny Stock Trading of March 2024

Penny stocks are low-priced securities that trade for less than $5 a share. Not all brokers offer them, and those that do may charge higher fees.

Kevin Voigt
By Kevin Voigt 
Edited by Pamela de la Fuente

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.


The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Penny stocks are risky, low-cost investments, though they don’t actually cost a penny. They are shares of small companies that trade outside of major stock exchanges.

Some brokers add a surcharge to stocks that are valued at less than a certain dollar amount, like penny stocks. Many won't extend their free commission offers to unlisted stocks. The definition of penny stocks will also vary by broker. Some consider anything trading under $5 to be a penny stock, while others put the cutoff at $2 or $1. (For more on penny stock trading, see our article on investing in penny stocks.)

Penny stocks may seem like a steal when stacked against companies that trade for $500 or more. This is where the backstory is important: These stocks are cheap for a reason. Because they are issued by small, yet-to-be-established companies, penny stock values can be turbulent. They are often hard to research and accurately value, and they trade infrequently, which means they can be tough to sell. (Here are other ways to find cheap stocks beyond penny stocks.)

Because of less stringent financial disclosure requirements, penny stocks are more susceptible to “pump and dump” schemes, where traders talk up the value of a stock only to “dump” it at artificially inflated prices. (In an effort to discourage this practice, the U.S. Securities and Exchange Commission issued new rules in September 2020 to prevent brokers from quoting OTC stocks unless companies issuing shares release up-to-date financial information.)

Choosing a penny stock broker

In case the above didn’t make this clear: There are significant risks that come with trading penny stocks, unless you are a sophisticated investor and you understand this market. You'll also want to be aware of the following when selecting an online broker to trade penny stocks:

Volume restrictions: Besides trade surcharges, there may be volume restrictions. Some, such as Fidelity or Firstrade, offer unlimited shares without additional fees, but a few charge more for large orders. Some brokers also limit the number of penny stock shares you can trade in one order or in one day, slowing your ability to trade and forcing you to pay another commission for a second order.

Trading restrictions: Watch out for firms that require you to trade penny stocks by placing a phone order or that impose limits on the types of trades you can execute. Ideally, your penny stock broker will allow you to trade penny stocks with the same online platform used for other stock trades.

Below are NerdWallet’s picks for the top brokerages for penny stock traders. You'll notice that many of these brokers also appear on our list of the top online brokers for stock trading; they're all well-rounded brokers that also offer a uniquely strong suite of features for penny stock trading.


Why you can trust NerdWallet's picks: Our writers and editors together have more than 50 years of experience writing about finance, and follow strict guidelines to maintain editorial integrity. We do a deep, independent analysis of dozens of investment firms, sorting through the details to find and evaluate the information investors want when choosing an investing account. To see our full methodology and learn more about our process, read our criteria for evaluating online brokers.

Best Brokers for Penny Stock Trading

NerdWallet rating 

5.0

/5
Fidelity
Learn more

on Fidelity's website

Fees

$0

per trade for online U.S. stocks and ETFs

Account minimum

$0

Promotion

None

no promotion available at this time

NerdWallet rating 

5.0

/5
Interactive Brokers IBKR Pro
Learn more

on Interactive Brokers' website

Fees

$0.005

per share; as low as $0.0005 with volume discounts

Account minimum

$0

Promotion

Exclusive!

US resident opens a new IBKR Pro individual or joint account receives 0.25% rate reduction on margin loans. Tiers apply.

NerdWallet rating 

4.3

/5
Robinhood
Learn more

on Robinhood's website

Fees

$0

per trade

Account minimum

$0

Promotion

1 Free Stock

after linking your bank account (stock value range $5.00-$200)

NerdWallet rating 

4.3

/5
SoFi Active Investing
Fees

$0

per trade

Account minimum

$0

Promotion

Up to $1,000

in free stock for users who sign up via mobile app

Want to compare more options? Here are our other top picks:

If you’re still on the fence about penny stocks, learn more about some of your other investment options:

Last updated on March 1, 2024

Methodology

NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.

We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars).

For more details about the categories considered when rating brokers and our process, read our full methodology.

To recap our selections...

NerdWallet's Best Brokers for Penny Stock Trading of March 2024