This Penny Stock Broker Just Went Bust & Here Are 4 Great Ones

UPDATE: A new specialized broker for short selling for those who can afford their account minimum of $30,000 has emerged, please contact me HERE for a personal introduction, I don’t want word getting out about their superior service so I’m only going to introduce a few lucky people.

What a difference a few weeks make!

2013 has gotten off to a great start as I’ve profited nearly $20,000 in 2 weeks of trading…see all my trades here….we released brand new trading software called StocksToTrade.com, my VIP students, my trading challenge students are banking and views of my 7 free video lessons are at an all-time high.

A few months ago I wrote this post about the best brokers for short selling penny stocks, but as usual the list has changed. In fact, it’s only been 3 weeks since I wrote an updated post on the best penny stock brokers for 2013, but now even that list is dated.

Capstone Investments, which I had been happily using to short sell hard to borrow penny stock for the past few years, is now no more as of the past few days. I wired out roughly $300,000 and am now figuring out where to put that $.

There are lots of rumors swirling about exactly what happened, but I won’t bother to speculate because it doesn’t matter to me. The fact is you can’t trust any broker 100%, they’re all sales guys, they all lie, but you do need them to execute your trades and you need the right ones to short sell penny stocks.

Because as my students know the stock market is a living breathing organism that’s constantly changing so in order to be successful, you can’t just memorize (although these 7 free lessons help tremendously)…you must understand how the market works, the motivation of all the players, the mistakes most people make, the odds and risk/reward of various opportunities, the ability to choose the best ones and then constantly adapt in the pursuit of success.

Then make a ton of $ so you can enjoy a crazy $235,000 car like I do:

This is how my students have now made over $5 million in trading profits, all detailed here, and over a dozen of my trading challenge students have made $100,000+ each in just a few short years since I began teaching.

So here’s a rundown on the best penny stock brokers for the start of 2013:

1. SureTrader is by far my favorite broker in 2013 as when you open a new account HERE you can be sure you’ll be getting the best borrows for short selling penny stocks which is my main source of predictable steady income…you can read my initial review of Suretrader from several months ago, but they are far and away my favorite broker due to a low required minimum of just $500, no pattern day trader rule, increased leverage (for those who use it) and a recently added list of 10,000 shares to short since they added a new clearing firm to their arsenal.

Sure, sure they have customer support, website and software issues since they’re still new and small and yes they are offshore (hence why their customers aren’t subject to the absurd PDT rule), but the beauty of their business model is that they have multiple clearing firms which means better borrows…and as someone who has made millions shorting the worst companies in the world, I’ll tell you much of my success is due to finding borrows. Unlike other brokers with great borrows, SureTrader‘s minimums are low so the borrows are accessible by everyone…and understand they specialize in having shares to short of stocks between $2-5/share…not necessarily the ultra-low-priced ones which isn’t the end of the world though because it’s scary to short stocks under $1/share as the risk/reward stinks.

I am a proud SureTrader customer and affiliate and I am truly grateful for their existence, especially for all the international people who email me every day asking for a quality penny stock broker.

2. Interactive Brokers has the single worst customer service of any company, financial or otherwise, that I have ever dealt with and if you have any issues with trades, executions or software glitches, expect them to screw you…because they only care about their bigtime hedge fund clients, not about anyone with less than $1 million and certainly not anyone with less than $100,000. I applied to be an affiliate weeks ago and they sent me an email saying they will let me know within the next month. (Conversely, we accept Profitly affiliates same day HERE and we paid out nearly $50,000 last month in affiliate commissions)

That said, they have great borrows to short sell penny stocks, especially on stocks under $2/share and even stocks under $1/share. Some of my ignorant haters mistakenly believe it’s impossible/illegal to short sell stocks under $1-2/share…nope, IB has been allowing me to do it for years.

3. I’ve also made millions buying penny stocks so you don’t always need to trade through these customer-service-challenged brokers that specialize in finding good borrows…I’ve had an account at Thinkorswim, which is now a part of TD Ameritrade, for years and their customer service is top notch.

4. Speedtrader is another online discount broker I use for my long positions as they are competent and their commissions are extremely low.

Posted in Brokers, Short Selling, Short Selling Penny Stocks

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  • http://www.facebook.com/profile.php?id=639191410 Bob Garrett

    Sure trader is awesome tu tim for the recommendation, they treat me great and even gave me a christmas present, for real by the way

  • MarcTrades

    So you don’t like maybe even hate Etrade?

  • Bob

    You are a great person and trust in people than know your weak point….the penny stocks to borrow. In mid term other broker follow the same way that capstone…. Brokers need to have very clear the contracts and not avoid their responsabilities……i cannot say you the name now because i am meeting all the testimonies…..

  • Antonio M.

    Why is Suretrader not open to US resident as indicated in their website?

  • http://www.timothysykes.com timothysykes

    it is open to us residents, i have an account there, they just cant market to us residents since they’re offshore

  • http://twitter.com/jasperandoy Jasper Andoy

    does suretrader allow you to short sell penny stocks under 3 dollars sorry i am new to this.

  • keyama

    i am from uk.. any broker from here? little help.. i found my bank one… how does that work?

  • Ron

    What you need 15k in each brokerage just in case??? It will take me a year to get that set up.

  • Steve

    I use Etrade but never tried to sort a OTCB penny stock. Does that not work because of the day trading rule?

  • http://twitter.com/KevinH37 Kevin

    No its because E-trade is a crappy broker for shorting stocks! You need a suretrader or IB account which is good for short selling

  • http://twitter.com/KevinH37 Kevin

    No suretrader you can start an account with i believe $500 dollars now but IB you need $10,000 to open an account with them. Suretrader would be the way to go if you don’t have enough for a IB account. Both are good for shorts!

  • http://twitter.com/KevinH37 Kevin

    Yes

  • http://www.samuellozano.net/ Samuel Lozano

    Does Capstone Investments give you leverage?

  • keyama

    anyone having problem to open an account with sure trade? i am fine until when i try to up lode my photo proof, the silly server breaks down and tells me my file is too big ;/

  • http://twitter.com/phatpennystocks phatpennystocks

    i just faxed all my forms to suretrader and with cc form to fund the account. they are telling me within 48 hours

  • Gob

    Why do i need multiple brokers? That seems overkill for someone starting out

  • Jumar Crosby

    I can tell by hearing this you have sold short very little, the whole game in shorting is ‘finding shares’. The more sources you have to borrow shares the more likely you are to find them. The broker has to either hold shares themselves or have another client with a long position and when they don’t of course you cant borrow any. I have multiple brokers myself, you’d think large firms like Etrade would definitely have shares to short most of the time because of their size…wrong I constantly watch stocks tank before my eyes and couldn’t get in because there were no shares to short.

  • Jumar Crosby

    Etrade does not allow you to short sell any stock under $5 a share.

  • Wes

    Could you update me on how this went? I’m considering funding with a credit card and I’m wondering how your experience has been since opening an account with SureTrader

  • Carlo

    Can you short with Suretrader even when you only have $500? Thanks

  • Jim

    That was the problem I was having. I will try to set up an account again with suretrader so I can short. I only have 2k and being in the military I don’t have options to make extra cash. How strict are they about the references for the account set up? And do they contact them?

  • George

    Tim, SureTrader just announced their clearing firm is no longer allowing stocks of less then a dollar to be held short overnight. Pretty awful really, not sure you can recommend them this highly still.

  • http://www.timothysykes.com timothysykes

    George I rarely short stocks under $1/share anyway, focus on better pumps, feel free not to use them and miss out on borrows when there is a great short, thank you for your ignorant comment, you exemplify the reason why my strategy continues to work year in year out, don’t ever change :)

  • zach wasil

    Sykes you should have been on saturday night live, what a snappy bastard you are! I love it! But you should show yourself trying to park that lambo!

  • byron

    i AM BEGINNER I LOST 6000 DOLLAR AND i have 700 dollar . to invest, any great advice . i need great software to ear more money. ?thank

  • Andre

    I can’t open any account to trade penny Stocks, I living in Japan… no broker to me!

  • freshprince

    Hi Tim just signed up for the penny silver, Been trying to get shares to short but etrade and thinkorswim says the dont short otcbb stocks. what should I do since I want to get in the game. I will be one of your challenge student soon

  • WMC

    Put down the bottle.
    Get some rest.
    Make a decision to not be a fucking idiot.
    Live that decision.
    Watch Tim’s videos.
    Watch them again.
    If you are still drunk you may need to start over (read the top line)
    Work out some way to get some cash… (~$5500.00)
    Get on your knees and ask for a place in the ‘challenge’.
    Repeat, i.e. act out, the good stuff above.
    Do not repeat the bad stuff.
    Pray to GOD for another chance.
    Work hard.

    Chances are you will fail somewhere along this path.
    If you do not fail you will be on a path to becoming rich.

    And when you are there– getting drunk will be different.

  • Fupped Duck

    I’m a subscriber, but you are one cocky bastard. Has anyone slapped the taste out of your mouth lately?

  • Shane Little

    Air Force?

  • Angelin Guraj

    Optionsexpress allows me to have an account even though I’m non us. What do you think about them Tim?

  • cd

    ..

  • gunner

    I can no longer trade with Suretrader. They blew my account up by trading my account and canceling my limit orders on short trades. They have hidden fees also which can be expensive. I can live with the PDT rule for now. It was fun but expensive. lessons learned.

  • Blake

    Hi,

    If I were to choose either TD or Suretrader which one would you guys recommend? I kinda like TD (ThinkorSwim) platform which is free if you have account with them but is it worth choosing them over ST when it comes to overall pennystocks trading?

    Thanks in advance!

  • German Kurbaji

    Tim, just open my account at suretrader. I want to raise my 10k savings to millions of dollars. I hope to become your student one day, that plus my Fincance studies at the University of Miami will help me a lot on my way to be rich. Thanks for the videos they helped me a lot.
    Thank you,
    German Kurbaji

  • James Green

    Hey yall,
    I’m trying to open an account at suretrader, and it is asking me for “Professional References”. I don’t really have any professional references, other than a single bank. Any advice? Thanks

  • Victor Jones

    I am having the same issue/concern with ST. Also, should we be entering some sort of promotional code with signup to get you more kudos?

    Thanks in advance!

  • paul

    I use e trade and I am having trouble finding shares to short. Is e trade a bad broker for shorting penny stocks?

  • Hamza

    Hey,

    SureTrader allows and accepts accounts from all nationalities. :)

  • Jordan

    If you can’t find stocks to short, I’d say that was a bad firm to short stocks with…

  • nu

    Do you guy know Speedtrader allow to short?

  • CorporateRaider

    Optionsexpress doesn’t let you short sell penny stocks

  • me vyes

    what are some foreign brokerages that i can trade in the u.s. and offshore without pdt rule,and that trades otc without a killer commission speedtrader sounds promising,

  • John Dee

    I checked recommended brokers and more but it’s extremely expensive. The cool price on frontpage is not valid. There are always bunch of fees written in small caps. I wonder how americans trade small stocks?! SureTrader, for example, equity fee is 500$ for trading 1000000 shares (which is not unusual lot in small cap world). Margin is impossible for <3$ stocks. Shorting is good with 2.5$/share backup, so again impossible for small stocks. I wonder how can these services be recommended here. The users must be shocked to read the bill. I mean in EU I pay $5 per trade maximum no matter if it's long, short, aftermarket, or subpenny!

  • Mike

    Which broker do you use in EU?