Best Penny Stock Brokers

Penny stock trading is one way to get your feet wet in the stock market without breaking the bank.

Penny stocks are shares of companies that trade at relatively modest prices. However, much like those 99p ice cream flakes, they're not always as affordable as their name implies.

Typically, shares priced under £5 fall into the category of “penny stocks”. Yet they can often be volatile and risky to invest in.

To navigate this market successfully, you'll need the right tools, a reliable broker, and accurate data.

I've carefully reviewed a range of penny stock trading platforms to help you find a solid footing in this fluctuating landscape.

The best penny stock brokers in 2024

Provider	Score	Details
1. XTB Online Trading	★★★★★	Click Here
2. Interactive Brokers	★★★★★	Click Here
3. Robinhood	★★★★★	Click Here
4. Webull	★★★★★	Click Here
5. Tradier	★★★★★	Click Here
6. TD Ameritrade	★★★★★	Click Here
7. Charles Schwab	★★★★★	Click Here
8. Firstrade	★★★★★	Click Here
9. TradeStation	★★★★★	Click Here
10. Fidelity	★★★★★	Click Here

1. XTB Online Trading — Top Penny Stock Broker 

While they have made their name in the CFD and FX markets, they facilitate transactions in many other markets and with many other types of assets.

There are several reasons why the xStation5 and xStation mobile trading systems have won awards. In particular, their fast transaction execution times are a major selling point. Its tools include trading charts, calculators, and access to market order depth.

The trading platform may be adjusted to suit your own preferences. The fact that fees are often not required to be paid when trading penny stocks is another perk. Each month, customers can trade up to £100,000 without paying any commission. In the realm of penny stocks, this opens up a lot of space for manoeuvre.

With penny stocks, you can invest on XTB without breaking the bank on trading expenses.

Downsides

We see the possibility of incurring conversion or withdrawal costs as the major downside.

There is a 5% charge on any currency conversions that are necessary for your deal. These are the kind of expenditures that can mount up quickly.

Pros

✔️ Effortless business trades 

✔️ Trading that adapts to your specific demands

✔️ Cost-effective trading with no added fees

Cons

❌️ Costs associated with the conversion can outweigh the benefits

2. Interactive Brokers — Trusted Penny Stock Broker 

Penny stocks are notoriously volatile. When you invest in household names like Apple, Tesco, or Amazon, you can usually expect the daily stock-price movement to muddle along fairly calmly, ticking up or down by a couple of percentage points.

However, investing in penny stocks (shares in micro-companies) is a one-stop ticket to a rollercoaster ride that can see the price double or crash by 90% in a matter of hours, depending on your luck.

With Interactive Brokers, you have access to the data and analytics that can help you swat up on your penny stocks. This might help you outmanoeuvre other traders in the market, although remember that the professionals have algorithms and expensive data subscriptions that are almost impossible to rival as a humble retail trader.

If you want to play it safe, Interactive Brokers also allows for “fractional trading”. This allows you to buy a tiny proportion of a stock that trades for hundreds or even thousands of pounds.

In effect, it chops down mega-cap companies' stocks (like Nvidia, Rolls Royce, or Samsung) to penny stock size. With fractional trading, you can gently ease yourself into investing with just a quid or two while avoiding the bipolar mood swings of the penny stock world.

Downsides

Interactive Brokers is really more for the seasoned traders, and that might make it a bit tricky for newbies. The massive selection of trading options is a bit of a giveaway there.

Also, they're not really big on penny stocks. It's not a huge deal though – it just means you won't find any fancy tools or extra perks for penny stock trading. But you can still trade them, and getting around the platform is pretty straightforward with a little practice.

Pros

✔️ Access to foreign markets

✔️ Lots of stock analytics to peruse

✔️ Costs are not incurred via commissions

Cons

❌️ Not a good place to start

3. Robinhood — Top Penny Stock Broker for Newbies 

The fundamental problem was how to fit the vast quantity of data required to consistently earn money trading stocks into the small screen of a mobile device while maintaining a user-friendly interface.

The answer that Robinhood offered was not everyone's favourite, but it is the approach that many inexperienced traders prefer: just omit the data. After all, you can always use another device to collect the data you need if you conduct most of your trading on your phone.

The final product is an app with an enormous user base — possibly the largest in the world — and a clean, simple design that is perfect for novice traders. Robinhood provides a newsletter that reveals the current market trends in order to help you choose the top penny stocks to invest in.

The community there is a big reason for all of this. Although the community's chitter-chatter is no substitute for information you get from primary sources, you can count on it to entertain and even inspire you in your penny stock-trading journey.

Downsides

You may have noticed that we didn't highlight a single positive aspect of Robinhood that pertains to trading penny stocks.

The software supports penny stocks, but that doesn't mean they're prioritised. Similarly, the lack of analytical tools makes it hard to tell the dynamite penny stocks from the duffers.

Fortunately, you can search for information about your Robinhood holdings on third-party websites that collate financial data.

Finally, keep in mind that none of the accounts are sheltered from the taxman. In other words, on Robinhood you can't set up an Individual Saving Account (ISA), which gives you a £20,000 tax-free allowance.

Experienced stock traders will likely be put off by the lack of sophisticated products, like options, futures and CFDs. If you want to earn money, Robinhood is not the place to do it.

Pros

✔️ Community that is both large and helpful

✔️ An excellent place to begin with mobile trading

✔️ Informs you of recent developments in the industry

Cons

❌️ Inappropriate for low-priced stocks

❌️ Regardless of the nature of the transaction, taxes must be paid

4. Webull — Big Penny Stock Broker

It also allows transactions from exchanges across the globe. Webull has one of the greatest communities among penny stock trading brokers because of this and the fact that it is so widely used as a mobile trading software.

Downsides

Webull, which seems to have been designed with simplicity in mind, doesn't provide as many stock trading options as other brokers do. It rules out trading in CFDs, options, and more volatile markets like forex and commodities.

While Webull is an excellent broker overall, it might appear a little limited in scope if you're already a seasoned trader, with its offering more targeted at novices who are looking for a user-friendly interface.

Pros

✔️ First-rate work on the mobile app design

✔️ Some nuance for seasoned investors

✔️ Great deal of availability for novice traders

Cons

❌️ Has fewer high-risk or complicated investments

5. Tradier — Best Penny Stock Broker for Day Traders 

This is because Tradier offers a £7.50 monthly membership cost instead of collecting commission fees. If you don't trade often, this won't help you out much, but if trading is your main source of income, you'll save a lot of money by paying a monthly fee instead of commissions.

Furthermore, Tradier is a flexible broker that lets you personalise your trading dashboard to display just the indicators and data you need to make profitable trades. It includes all stock, CFD, and option trading.

Trading in the microsecond time frame typical of day traders is made easier with Tradier's constant stream of market data and analysis. Their database of information isn't the finest, but they have excellent monitoring metrics and analytical tools.

Downsides

Tradier's user interface is the program's worst flaw. It's bearable since you can change a lot of settings, but the UI is really bland and doesn't show you much. If you find looking at spreadsheets headache inducing, you'll probably want to give Tradier a miss.

When added to the monthly fee, its less-than-elegant appearance makes for a terrible experience for novice traders. Most novice traders will be lucky to work out even half of what's possible with Tradiers.

Lastly, although Tradiers does provide access to worldwide markets, it falls short where mutual funds and indices are concerned. If you're just looking for a hub to trade penny stocks, however, that shouldn't be an issue.

Pros

✔️ Commissions are replaced by monthly subscription 

✔️ Ability to personalise dashboard

✔️ Maintains constant communication with you

Cons

❌️ Some means of monitoring investments are missing

❌️ Poor user experience

6. TD Ameritrade — Established Penny Stock Broker 

The fact that they provide this service is one of the many reasons why TD Ameritrade is a top-notch multi-faceted brokerage. We found their app to be one of the greatest centralised information resources out there. Furthermore, their lectures are provided in an engaging, modern format, so there's no need to re-live schoolboy nightmares of stuffy books and dusty blackboards.

More than that, you get to decide how much attention you want to pay to these guides.

TD Ameritrade's also lets you trade securities. But be warned: these are complicated financial products which are definitely not suitable for beginners.

Investing in penny stocks is already a high-risk endeavour. Because of their low cost, they might attract novice traders with small budgets, but it's important not to underestimate the rip-your-face-off volatility involved.

Trading CFDs and options on penny stocks carries a high degree of risk. You may reduce your exposure to risk with the aid of TD Ameritrade's seminars and knowledge resource. They won't be able to eliminate the danger entirely, but they can help you tread more cautiously.

Downsides

While TD Ameritrade may seem to have a lot to offer novice traders, first impressions aren't always accurate. The broker specialises in margin trading and the sale of complex securities. These can be complex, awkward, and counterintuitive.

However, they have to compete with everything else on the app for screen real estate. It's not badly made software, but it does include a lot of unnecessary features. Sometimes, even the most seasoned of investors might have trouble locating information they need.

Nonetheless, the app's absence of costs increases its attractiveness to users of all stripes. Even if you don't like the app at first, keep in mind that it's designed to help you go from complete novice to accomplished pro.

Pros

✔️ Fantastic method of progressing from trading novice to competent intermediate

✔️ Incentives like stock options come in many forms and contribute to expansion

✔️ There are reportedly no hidden costs of any type

Cons

❌️ Explicitly directs you in your actions

7. Charles Schwab — Best Penny Stock Broker for Futures 

Charles Schwab is a broker that specialises in buying and selling futures contracts. While they have access to several assets, the way in which their society is managed suggests that they are most interested in futures.

Charles Schwab's platform stands out by prioritising infographics, animated videos, and podcasts over traditional essays and instructional material. Essentially, their primary goal is to make this repository of information not only valuable but also engaging for learners.

Interestingly, the platform places a strong emphasis on strategies to enhance one's financial prospects for the future. It seamlessly integrates these insights into the programme without disrupting its overall functionality, fostering a fluid exchange of data and user interaction. For those new to these types of investments, this approach offers an excellent introduction and a solid foundation for understanding them.

Downsides

Investors in penny stocks are likely to balk at Charles Schwab's commission rates. The average commission per transaction is roughly £3.75. That practically rules out any hope of buying single units of penny stocks, forcing users instead to load up on them so as to drive down the amount of commission paid as a proportion of the total.

Furthermore, compared to other brokers, Charles Schwab's margin rates are more expensive. Since trading on margin entails borrowing money to invest in stocks and then utilising the profits to pay back the loan, penny stocks and margin trading go hand in hand. In the world of penny stocks, even a little credit might help you go far (or, alternatively, leave you majorly out of pocket).

Pros

✔️ Great educational resources

✔️ Very well-crafted user interface

Cons

❌️ Obscenely high commission rates

8. Firstrade — Top Penny Stock Broker for Individuals 

Firstrade do not only succeed because of their user-friendly app and zero commission fee model. They also provide guides on how to establish the appropriate accounts (e.g. ISAs) to avoid paying taxes on the transaction.

Firstrade does not avoid risky stocks despite its emphasis on long-term planning. Firstrade provides all of this without charging any commission fees, making it ideal for those who wish to increase their financial security over time while maintaining the flexibility to go for gold on their latest penny stock flutter.

Downsides

Firstrade's biggest surprise is its complexity. You'd think it would be user-friendly, especially since it seems to cater to regular investors. But nope, it's pretty tricky to get around. The layout's a headache, and even though it's got tons of info, good luck finding what you need easily. Seems like it's aimed at serious traders, but for newbies? Brace yourself for a lot of reading and backtracking through pages.

Pros

✔️ Helpful advice for establishing and funding retirement and educational savings accounts

✔️ There is a wide variety of securities

Cons

❌️ Awful user experience

9. TradeStation — Underrated Penny Stock Broker for Volume

That's a lot of leeway, and it's well above what a regular retail investor trading would ever reach. But if you want to make a living trading penny stocks, you might end up maxing out that allowance.

Good news: after your 10,000th trade, you won't have to worry about commissions. Plus, with the right account, you can dodge those usual trading fees. Just a heads-up though, the accounts that give you the most freedom with your cash tend to ask for bigger deposits upfront.

It's all about keeping your money safe and keeping you hooked on the app. And even though the app really focuses on penny stocks, you don't have to stress over dodgy automated trading scams.

That's a big plus, especially since the app lets you dabble in a bunch of riskier stuff. Dealing with all that without fretting over automated trading messing things up? Definitely a win.

Downsides

You might not notice TradeStation's drawbacks until you're deep into using it. The real headache is how easy it is to lose cash because of the complex securities and the confusing fee structure for different accounts.

Like any trading app, there's always a risk of losing money. But here, it's the app's murky pricing that'll trip you up. Expect to get hit with charges that feel more like one-off penalties than standard fees.

And get ready for clutter – the app's packed with reminders about every tiny rule and fee, making it super easy to miss the small stuff that can add up.

Pros

✔️ Allows the first 10,000 transactions to be completed at no cost

✔️ Access to a wide variety of account types for active traders

Cons

❌️ After the fees are applied, there are several further potential ways to lose money

❌️ Visually, the app is a mess

10. Fidelity — Sound Penny Stock Broker 

When you're just getting started in the world of investing, Fidelity (review) is a fantastic broker to work with. Fidelity provides financial advising agents to help you build an investment plan, but other brokers just provide access to research and knowledgebases to assist you learn how to trade.

That entails guiding you through a variety of processes.

Together, you'll determine the root of your interest in trading penny stocks. For all that comes next, this is crucial.

With their assistance, you may set up the appropriate accounts. That way, when your account grows, you may easily access and provide any relevant tax information.

Moreover, they will assist you in making the investments yourself.

This last point is essential since it is not a service often offered by brokers.

All of this guidance is essential for novice investors to make sense of Fidelity's offerings. Those with greater investing expertise won't have any need for assistance. This makes Fidelity a very scalable broker, as you can start out with as much assistance as you need and then progress to utilising their extensive alternatives without any outside assistance at all.

Foreign money, cryptocurrencies, and commodities are not available in Fidelity. Yet, it more than makes up for this lack in every other respect. This comprises indices, futures, options, CFDs, and stocks.

Downsides

Let's just say it: Fidelity has a terrible user interface. Nonetheless, the precise reason why it is negative may be unclear to others. They will read it, learn nothing, and then be perplexed. The problem is that each page has the same design.

Nothing on Fidelity really indicates what you're doing other than the text you're reading, whether you're learning about market statistics or creating an account. Well, “Just read the text, genius”, but there's a tonne of stuff on the website and the app, and it'd take forever to read it all.

The complexity of the trading process might be overwhelming for newcomers using the applications of many brokers. This is one of the few times the software has proven to be frustrating to use for everyone. Of course, physical attractiveness is not the only factor.

Notwithstanding its shortcomings in usability, Fidelity offers excellent guidance and a wide range of trading options for low-priced equities.

Pros

✔️ Excellent financial guidance

✔️ Both new and experienced traders will find it appealing

✔️ There are no hidden costs or commissions

Cons

❌️ Really poor user interface

Top Penny Stock Brokers (2024) — How They Work

Stocks are complex, and it's rare for a single share to represent a significant portion of a company. Companies can issue new stocks at any time, usually making each share represent a smaller fraction of the total.

Some companies deliberately keep their stock prices low by releasing new shares frequently, aiming to classify their shares as penny stocks. This dilutes the ownership, preventing any single investor from gaining significant control over the company through stock purchases.

However, issuing new shares can reduce the value and influence of existing stocks. While trading in penny stocks keeps shareholder interest alive without handing over too much control, it can also create a negative perception among potential investors. The goal is often to avoid attracting investors who seek to wield control by buying a large stake in the company.

★ 1. What you need

Platforms for trading stocks are used for trading penny stocks. These applications are mostly used on computers, although some may also be downloaded for use on mobile devices. In order to legally install and use one of these trading platforms, a licence is required.

There are two ways to get this licence: The first option is more expensive since you must pay for the licence on your own. Such systems exist in a wide variety of sectors. Companies that provide things like construction tools, taxi cab identification badges, and picture editing software all need memberships in order to utilise their wares.

Obtaining a licence through a broker is another, far cheaper option for acquiring this technology. Stocks and shares markets home and overseas are all accessible via brokers.

Customers might be people, but often are corporations.

Neither buying nor selling stocks or mutual funds can be done without a platform, and neither can a trader have access to a platform without a broker.

★ 2. Why trade penny stocks?

Just what are the advantages of trading penny stocks?

Let's delve into why people trade penny stocks. Unlike regular stocks, penny stocks are cheaper but more volatile, often leading to rapid and bulk trading.

But why trade in penny stocks? The allure lies in their high volatility, offering the potential for quick profits. However, the stock market isn't about “easy money.” If it were, it would be overrun with people chasing fast gains, ultimately devaluing the market.

The reality is, many enter the market hoping to capitalise on others' risks for quick returns, only to find themselves on the losing end. This is particularly true with penny stocks, known for their unpredictable nature.

Penny stock brokers in 2024 — A summary

Penny stocks are a balance of risk and affordability. You can find a broker that matches your financial goals and experience level. Just weigh your options carefully and decide what you're aiming to achieve. And always remember that however affordable an investment looks, there are no guarantees.

Related guides:

• Stocks vs. Exchange-Traded Funds (ETFs)
• Best Performing Stocks & Shares ISA
• Highest Priced Stocks