Blog : Penny Stock Discount Brokers

by Peter Leeds on June 30th, 2008

The Penny Stock Broker report includes:

1. How we researched the penny stock brokers

2. The findings from the top 9

Scottrade

Speed Trader

MyTradz.com

Trading Direct

Lightspeed Trading

RealFastTrader.com

Success Trade Security

Ameritrade

Noble Trading

 

1. HOW WE RESEARCHED THE PENNY STOCK BROKERS:

In penny stocks, it is important to get the right stock broker. Penny stock traders generally make more trades, more trades per dollar, and more shares per trade. We also have to watch for low trading-volume stocks, and we need our broker to be reliable and helpful.

So, we decided to research the discount brokers exactly like we research the penny stock picks we make at PeterLeeds.com - by looking at every factor. We went above and beyond the call of duty, just like we do with our penny stock picks.

For example, we e-mailed every broker two different e-mails:

E-mail #1 appeared as if it was coming from a prospective client.

 

E-mail #2 came from PeterLeeds.com staff, with full disclosure of the broker rankings we were working on.

We called them all too, and ranked their helpfulness, professionalism, and friendliness.

We took a good look at their policies, hidden charges, and commission rates. We even took into account the ease of setting up an account, and the quality of the trading webpage.

 

From the hundreds and hundreds of discount brokers, here are the top nine. They are in no paticular order, because what is important to one person is not as important to another. You may want low commissions, while someone else wants helpful phone support.

Take a breeze through these rankings, and decide for yourself which penny stock broker is best for you!

Also, provide us with your feedback. We'd love to hear about your experiences with the discount brokers.

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THE FINDINGS FROM THE TOP NINE

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1.) www.scottrade.com
2.) Minimum to open an account = $500
3.) E-mail #1 response time = Didn't respond
4.) E-mail #2 response time = 11 hours
5.) E-mail professionalism rank = 8
6.) E-mail helpfulness rank = 7
7.) E-mail friendliness rank = 8
8.) Telephone call answered? Got voice message and had to type in zipcode to get directed to local office.
9.) Hold time? No hold time.
10.) Called back if required? N/A
11.) Time before call back? N/A
12.) Telephone professionalism rank? 9
13.) Telephone helpfulness rank? 9
14.) Telephone friendliness rank? 9
15.) Cost to buy 1,000 shares at $1.00 = $7.00 on all trades $1.00 and above, Broker assisted $27.00.
16.) Cost to buy 10,000 shares at $0.25 = $19.50 ($7.00 per trade plus 1/2% of total amount)

Notes and Observations: Very helpful. To open an account you can do it online.

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1.) www.speedtrader.com
2.) Minimum to open an account = $2,000
3.) E-mail #1 response time = 1 hour
4.) E-mail #2 response time = 1 hour
5.) E-mail professionalism rank = 9
6.) E-mail helpfulness rank = 9
7.) E-mail friendliness rank = 9
8.) Telephone call answered? Voice menu
9.) Hold time? 15 seconds
10.) Called back if required? N/A
11.) Time before call back? N/A
12.) Telephone professionalism rank? 10
13.) Telephone helpfulness rank? 10
14.) Telephone friendliness rank? 10
15.) Cost to buy 1,000 shares at $1.00 = $9.95 flat fee or lower depending.
16.) Cost to buy 10,000 shares at $0.25 = $9.95 flat fee or lower.

Notes and Observations: Call when setting up your account to let them know you're investing in penny stocks and they will set-up your account. Possibly will offer some discount rates for penny stock trading at the time you call. Can only invest in a maximum of 200,000 shares before having to do another trade. Very friendly about penny stock trading.

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1.) www.mytradz.com
2.) Minimum to open an account = $200 cash account ($2,000 for margin)
3.) E-mail #1 response time = No response.
4.) E-mail #2 response time = 10 minutes
5.) E-mail professionalism rank = 9
6.) E-mail helpfulness rank = 9
7.) E-mail friendliness rank = 9
8.) Telephone call answered? Immediately / transferred to broker from receptionist.
9.) Hold time? 1 minute
10.) Called back if required? N/A
11.) Time before call back? N/A
12.) Telephone professionalism rank? 9
13.) Telephone helpfulness rank? 10
14.) Telephone friendliness rank? 9
15.) Cost to buy 1,000 shares at $1.00 = $17.95 per trade
16.) Cost to buy 10,000 shares at $0.25 = $17.95 per trade

Notes and Observations: Very helpful. Gave additional information. Easy online sign-up process.

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1.) www.tradingdirect.com
2.) Minimum to open an account = No minimum
3.) E-mail #1 response time = 4hrs 25min
4.) E-mail #2 response time = No response
5.) E-mail professionalism rank = 10
6.) E-mail helpfulness rank = 10
7.) E-mail friendliness rank = 10
8.) Telephone call answered? Immediately
9.) Hold time? None
10.) Called back if required? N/A
11.) Time before call back? N/A
12.) Telephone professionalism rank? 5
13.) Telephone helpfulness rank? 5
14.) Telephone friendliness rank? 5
15.) Cost to buy 1,000 shares at $1.00 = $9.95 per trade.
16.) Cost to buy 10,000 shares at $0.25 = $9.95 per trade.

Notes and Observations: 1 Trade per year is required to avoid the $60 inactive fee.

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1.) www.lightspeedbrokers.com
2.) Minimum to open an account = no minimum
3.) E-mail #1 response time = 5 days
4.) E-mail #2 response time = 4 days
5.) E-mail professionalism rank = 9
6.) E-mail helpfulness rank = 9
7.) E-mail friendliness rank = 9
8.) Telephone call answered? Immediately
9.) Hold time? N/A
10.) Called back if required? N/A
11.) Time before call back? N/A
12.) Telephone professionalism rank? 7
13.) Telephone helpfulness rank? 6
14.) Telephone friendliness rank? 5
15.) Cost to buy 1,000 shares at $1.00 = $9.95 flat fee
16.) Cost to buy 10,000 shares at $0.25 = $9.95 flat fee

Notes and Observations: Currently getting registered in all 50 states. Should be registered within a month or two from 1-26-06.

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1.) www.realfasttrader.com
2.) Minimum to open an account = $2,000
3.) E-mail #1 response time = 30 minutes
4.) E-mail #2 response time = 13 minutes
5.) E-mail professionalism rank = 10
6.) E-mail helpfulness rank = 10
7.) E-mail friendliness rank = 10
8.) Telephone call answered? Immediately
9.) Hold time? None
10.) Called back if required? N/A
11.) Time before call back? N/A
12.) Telephone professionalism rank? 9
13.) Telephone helpfulness rank? 9
14.) Telephone friendliness rank? 9
15.) Cost to buy 1,000 shares at $1.00 = $9.95 per trade or lower with more shares
16.) Cost to buy 10,000 shares at $0.25 = $9.95 per trade or lower with more shares

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1.) www.lowtrades.com
2.) Minimum to open an account = Cash no minimum / $2,000 margin
3.) E-mail #1 response time = no response
4.) E-mail #2 response time = no response
5.) E-mail professionalism rank = N/A
6.) E-mail helpfulness rank = N/A
7.) E-mail friendliness rank = N/A
8.) Telephone call answered? Immediately
9.) Hold time? None
10.) Called back if required? N/A
11.) Time before call back? N/A
12.) Telephone professionalism rank? 9
13.) Telephone helpfulness rank? 10
14.) Telephone friendliness rank? 9
15.) Cost to buy 1,000 shares at $1.00 = $2.99 per trade for the first month, $5.00 per trade after the first month.
16.) Cost to buy 10,000 shares at $0.25 = $2.99 per trade the first month, $5.00 per trade after first month.

Notes and Observations: Insurance up to $500,000 and the clearing firm has additional insurance for account holders.

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1.) www.ameritrade.com
2.) Minimum to open an account = no minimum, no balance required. Maintain total $2,000 in account or trade 4 times in prior 6-month period to avoid $15 maintenance fee per quarter.
3.) E-mail #1 response time = no response
4.) E-mail #2 response time = no response
5.) E-mail professionalism rank = no response
6.) E-mail helpfulness rank = no response
7.) E-mail friendliness rank = no response
8.) Telephone call answered? Voice menu / announced wait time
9.) Hold time? 2 minutes

10.) Called back if required? N/A
11.) Time before call back? N/A
12.) Telephone professionalism rank? 10
13.) Telephone helpfulness rank? 9
14.) Telephone friendliness rank? 10
15.) Cost to buy 1,000 shares at $1.00 = $10.99 flat fee; phone system $14.99, broker assisted $24.99.
16.) Cost to buy 10,000 shares at $0.25 = (same as above)

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1.) www.nobletrading.com
2.) Minimum to open an account = cash $500 / margin $2,000 or more / day trading over $25,000
3.) E-mail #1 response time = no response
4.) E-mail #2 response time = no response
5.) E-mail professionalism rank = no response
6.) E-mail helpfulness rank = no response
7.) E-mail friendliness rank = no response
8.) Telephone call answered? Immediately
9.) Hold time? None
10.) Called back if required? N/A
11.) Time before call back? N/A
12.) Telephone professionalism rank? 10
13.) Telephone helpfulness rank? 10
14.) Telephone friendliness rank? 10
15.) Cost to buy 1,000 shares at $1.00 = Two options either flat fee per trade, or a percentage per share. It's up to the investor. Either $4.95 per trade or $.006 per share with a minimum of $2.00.
16.) Cost to buy 10,000 shares at $0.25 (same as above)

Notes and Observations: They don't negotiate trades. Investor's offers go directly to the floor. Noble Trading offers software that you can do this through, as well. One software package is free and it offers charts, money etc... for execution. Various costs for other software.