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TD Ameritrade & Penny Stocks: Is It the Top Broker?

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Written by Timothy Sykes
Updated 5/9/2023 25 min read

TD Ameritrade is one of the best known online stock brokers. I’ve used it a lot in my trading career.

Picking a reputable broker is a crucial step in any trader’s journey. I’ll share my thoughts, but it’s up to you to do the research. You should choose the right broker for your trading style.

Trading is a battlefield, and you need to have the proper weapons. That takes time and dedication. And finding which broker is best for you is a key step in building your arsenal.

TD Ameritrade can be a great broker for trading penny stocks online. Read on to find out if it’s the right broker for your needs.

Should You Trade Penny Stocks on TD Ameritrade?

Tim Sykes holding An American Hedge Fund in Italy after creating his top penny stocks list
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Some of you may wonder if you can buy penny stocks on TD Ameritrade. The answer is yes.

I think TD Ameritrade has pretty solid execution on buy orders. When you buy a penny stock on TD Ameritrade, your order usually executes quickly. That’s what you want, right? I know I do.

I don’t use TD Ameritrade to find penny stocks to buy … That’s because I use StocksToTrade to find penny stocks to buy. I think you should use it too…

StocksToTrade is designed to help you find penny stocks to trade. No matter your strategy, you can use StocksToTrade. I helped develop it, so its built-in scans are designed for the volatile stocks I like to trade.

But StocksToTrade isn’t a broker — it’s a great complement to your broker. You still need to use a broker to actually buy and sell stocks.

Does TD Ameritrade Charge for Penny Stock Trading?

TD Ameritrade’s fees vary depending on the stocks you trade…

Ever since Robinhood introduced commission-free trading, other brokers followed suit. I actually don’t mind paying a transaction fee for good executions. I consider it a cost of doing business in the market.

And free trading can be devastating to newbies who don’t have a trading education or know how to weigh their potential risk/reward.

TD Ameritrade, E-Trade, Charles Schwab, and Fidelity have all been around for some time now. Once Robinhood introduced no fees on trades, it affected all of those other brokers.

TD Ameritrade recently changed its flat-rate fees to no cost, too. The only exception is for trading OTC stocks. OTC stocks on TD Ameritrade still hold a flat rate of $6.95 per trade.

What Are the Benefits of Trading Penny Stocks on TD Ameritrade?

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Like I said, I think TD Ameritrade’s recent change to a flat-rate exchange fee is a huge plus. I trade OTC stocks often, and $6.95 per trade is low compared to what I paid 20 years ago…

Another benefit is one I mentioned earlier — execution of buy orders.

Think about it. If you want to trade penny stocks, you have to time your entries and exits accurately. Since TD Ameritrade is known to have better executions than other brokers, you can potentially better time your entries. The same thing goes for exiting trades and cutting losses quickly, which is my #1 rule.

New to penny stocks? Get my free online penny stock guide here and the rules I trade by here.

Now let’s talk about TD Ameritrade’s platform…

Platforms and Tools

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In 2009, TD Ameritrade acquired thinkorswim. So that’s another platform you can use if you have a TD Ameritrade account. It can be a great resource. Some of my students and I have used it.

What I like about thinkorswim is that it’s built for day traders. It includes access to press releases, 52-week highs and lows, and other technical indicators. Newbies like that it’s free.

I’m not saying free is always good. I believe in paying for quality. When you pay for something, you tend to value it more. I see students who pay for their education take it more seriously.

There’s a time and place for free. I want you to accomplish your goals. That means building your knowledge account and using the best resources you can find. It’s crucial in your growth as a trader.

It’s smart to be skeptical of free resources. And based on my experience, thinkorswim can be a good resource if you’re new to the penny stock market. You can always invest in more powerful tools down the line.


TD Ameritrade offers a wide variety of investment tools. But that isn’t why I use it.

Penny stocks are good for trading, not investing. TD Ameritrade caters to the entire range of traders — from swing traders to scalpers to day traders like me.

I’ve found my niche in penny stocks. You need to work to find yours.

If you’re ready to commit to your journey, apply to join my Trading Challenge. This is where all of my top students started their journeys.

Only apply if you’re serious. We only accept traders who are willing to put in the work.

Fees and Commission

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When I started trading penny stocks over 20 years ago, the fees were much higher. It blows my mind that there are hardly any commissions anymore!

I honestly don’t know if it’s a good thing for newbies. Like the pattern day trader rule, having fees for every trade can help prevent newbies from overtrading and blowing up their accounts.

Promoters these days lure so many newbies into stocks. New traders and retail investors don’t think twice — all they have to do is press a few buttons. They don’t even get charged for the trade.

It can be dangerous. Most traders fail. That’s because they fail to prepare.

You have to build your knowledge account first. The crazy market we saw in 2020 is a great time to learn how to day trade penny stocks. It’s a frenzy for traders who prepare.

Start your market education today. My student Matthew Monaco helped me put a 30-Day Bootcamp together. It covers everything you need to start building your trading foundation. And you can work at your own pace. Do it in 30 days or less, or take as long as you need. Get this low-cost resource today. See what Matt has to say about it here.

Get in trading shape with my 30-Day Bootcamp today!

Customer Service

Customer service exists to help the client. When you sign up with a licensed broker, you become that broker’s client…

So don’t ever be afraid to contact your broker with any questions or problems. Use customer service. That’s what it’s for.

TD Ameritrade has pretty solid customer service available 24/7 via phone and other methods of communication. When vetting a broker, be sure to check how and when you can reach a live person. When you trade volatile stocks like penny stocks, you just might need to get in touch sometimes.

Why You Should Research Your Broker

After reading this, you may have realized that I’m very meticulous. I like to trade like a sniper.

I wait for the perfect entry. If I miss it, I don’t trade at all.

You need to be the same in the markets. That means that you’re patient and prepared. You need to be self-sufficient and learn to think for yourself. Penny stocks move fast. The market changes fast. You have to stay alert and know how to adapt.

You need to be meticulous in everything you do. That includes doing your research before you pick a broker. Don’t just use one that everyone else is using. Find and pick the one that’s best for you and your trading style.

Trading Challenge

Being part of my Trading Challenge can potentially shorten your learning curve. All of my top students come from my Trading Challenge. And now they pay it forward by helping newer traders in chat and webinars.

I became a teacher and started the Trading Challenge so I could help people. There’s a lack of transparency in the market, and I want to change that. I want to provide an alternative to all the unethical liars and cheats out there, and help newbies become self-sufficient traders.

The Trading Challenge is where you can work to do that — with webinars, video lessons, DVDs, and the best chat room. Apply to join us today. Unless you’re not prepared to work. I prefer quality over quantity.

Now let’s switch gears…

5 Top Penny Stocks to Watch on TD Ameritrade

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My top penny stocks to watch on TD Ameritrade are:

  • (OTCQB: VIHDD) — Vision Energy Corp — The Former Penny Stock
  • (OTCPK: MMTLP) — Meta Materials Inc. Preferred Shares —The Part-Pump, Part-Squeeze Penny Stock
  • (NASDAQ: COMS) — COMSovereign Holding Corp — The Not-Yet-Delisted Penny Stock
  • (OTCPK: GDVM) — Global Developments — The Reverse Merger Penny Stock
  • (OTCQB: CRTD) — Creatd, Inc. — The Four Exchange Penny Stock

Before you send in your orders, take note: I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. That’s what I’m trying to model here. Pay attention to the work that goes in, not the picks that come out.

If you want to see more NO-COST watchlists, you can sign up for my weekly watchlist here.

1. Vision Energy Corp (OTCQB: VIHDD) — The Former Penny Stock

My first Ameritrade penny stock pick is Vision Energy Corp (OTCQB: VIHDD).

I’ve been tracking this stock with my Challenge students since it first creeped out of penny stock land in late October.

Workmanlike, it climbed over 600% in the first week of November. It had 7 green days in a row before it panicked, giving back more than half of its gains… Then it started climbing again!

I haven’t seen a clearer stair stepper pattern for a while. It was so clear because there was very little volatility — this stock averaged under 200,000 shares traded per day during its run. That makes it hard to get the execution I want on a trade.

When the next panic rolled around, my students and I were ready…

It bounced from the $8s to the $15s so fast that I couldn’t get a fill on most of my order. I made a $40 profit on a tiny position (starting stake $799.50).

It’s okay. There’s no way this stock keeps it up. The volume is awful and the pump is pretty obvious.

I’m waiting for the next big panic.

2. Meta Materials Inc. Preferred Shares (OTCPK: MMTLP) — The Part-Pump, Part-Squeeze Penny Stock

My second Ameritrade penny stock pick is Meta Materials Inc. Preferred Shares (OTCPK: MMTLP).

We’re getting close to the point that MMTLP shares will become stock in Meta Materials’ (NASDAQ: MMAT) oil and gas spin-off, Next Bridge Hydrocarbons. When it becomes obvious that the desperate pump fantasy of a legendary short squeeze isn’t going to happen, I think that the shares will fall.

And I’ll be waiting to dip buy them when they do.

Dip buying MMTLP panics is what’s earned me $4,144 so far trading this stock.

It might get a bit more dangerous soon. Meta Materials has been pretty direct about their plans for massively diluting the MMTLP float. They’ve been authorized to increase the float to 500 million shares.

That means no short squeeze, and a stock that might soon follow the downtrending chart of its parent ticker, MMAT. MMAT has been the subject of its own massive dilutions, and its price has suffered for it.

I love MMTLP because of its promoters. I know they won’t let it fail.

When they run back to their moms’ basements, I want to be watching this stock.

3. COMSovereign Holding Corp (NASDAQ: COMS) — The Not-Yet-Delisted Penny Stock

My third Ameritrade penny stock pick is COMSovereign Holding Corp (NASDAQ: COMS).

If you zoom in on COMS dismal chart, you’ll see some penny stock trader catnip — three volume spikes of at least 300 million shares traded in the past three months.

Better yet, those volume spikes coincided with price spikes. One sent shares up as high as 300%!

As with most penny stocks, you don’t want to look too far behind the curtain… One spike was in response to Nasdaq deciding to put off COMS’ delisting until February 2023. 200 million shares were traded from 9 a.m. to 10 a.m. EST — all to celebrate a stock that will almost definitely do a reverse split in the future.

The other spikes came in response to leadership decisions, notably the elevation of their interim CEO to full-time CEO. The board of directors was evidently impressed with his vision for COMS… one “pillar” of which includes actually filing their quarterly SEC reports.

PLEASE don’t believe the hype. This is a trashy penny stock that will drain the accounts of any newbies dumb enough to “HODL.”

But as long as COMS is a threat to have 100% spikes, I’ll be watching.

4. Global Developments (OTCPK: GDVM) — The Reverse Merger Penny Stock

My fourth Ameritrade penny stock pick is Global Developments (OTCPK: GDVM).

According to one trading website, GDVM is actually in the “shell companies industry.” The definition of a shell company is “a main component of the underground economy, especially those based in tax havens.”

That should tell you what you’re getting into with this stock.

Here’s what I like: GDVM is on a 2,500% tear since it traded 69 million shares at the end of August… which was easier then, as the stock was only worth $0.004 per share.

The catalyst was a reorganization of GDVM to prepare for a reverse merger. That’s when a private company takes over a publicly-traded company, avoiding the IPO route on the way to becoming publicly traded.

That’s basically what a SPAC is — except SPACs usually refer to listed shell companies with money behind them, not crappy sub-penny OTCs like GDVM. SPACs and IPOs have been hot in this market, for a bad reason…

My October trade for $475 (starting stake $7,516) gives an example of how I look at this stock.

I bought it during a quick intraday panic. It was trending up on a good catalyst — there was a huge reduction in float size, making each share much more valuable. I was confident that GDVM would bounce back from its panic.

This is how I’ll look to trade GDVM in the future — while protecting myself from its formidable downside.

5. Creatd, Inc. (OTCQB: CRTD) — The Four Exchange Penny Stock

My fifth Ameritrade penny stock pick is Creatd, Inc. (OTCQB: CRTD).

Over the past month, CRTD appeared on 7 of the daily watchlists I share with my Challenge students…

It isn’t hard to identify a stock with good trading potential when it’s on a 3,600% run!

Bigger picture, this is a stock that’s on a dismal trajectory. It was delisted from the Nasdaq in September, bounced around the pink sheets for a while, and then uplisted to the OTCQB market that same month! It also has plans to apply for a dual listing on an NFT exchange.

More interesting for trading purposes is the pumping that’s going on around this stock. Promoters are pushing the narrative that this is all a “short attack” by the same short sellers that targeted Global Tech Industries Group Inc. (OTCPK: GTII)…

I’ve made $4,852 trading GTII in the past few months. When promoters expose themselves on a stock, you know I’ll be listening.

CRTD has lost almost 50% of its value since mid-November. But lately, it’s been trending up again. Former runners can run again.

How Do I Find Penny Stocks on TD Ameritrade?

You need to use a good stock screener to find stocks that fit your strategy. You put in your criteria to scan every stock in the market. Once you have a smaller list, you can focus your attention on the best contenders.

I use StocksToTrade to find penny stocks to trade every day. It has 40-plus built-in scans that fit all of my different strategies.

Try a 14-day trial of StocksToTrade — only $7!

If you use TD Ameritrade, thinkorswim is a capable stock screener you can use to find penny stocks.

Trading would be so much more difficult if stock screeners didn’t exist. There are thousands of stocks… How else would you find the ones that have the potential for big gains?

Accessing the TD Ameritrade Penny Stocks List

You can use the thinkorswim app to access the TD Ameritrade penny stock list by inputting share prices in the stock screener conditions. You can also search by percent gain, market, volume increase, float size, and all of the other criteria I use to find stocks for my watchlist.

Don’t forget to check thinkorswim’s news feed feature to stay on top of the catalysts that will move these stocks.

How Do You Buy Penny Stocks on TD Ameritrade?

Once you find penny stocks on TD Ameritrade that fit your criteria, put them on your watchlist.

Once they’re on your watchlist, pay attention to stock price action, patterns, and technical indicators. Then wait for the right entry point.

Once you’re ready to trade, entering a position on TD Ameritrade is easy. All you have to do is click a few buttons to get into a trade. It’s that simple.

Tracking The Performance of Your Penny Stocks on TD Ameritrade

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Tracking and reviewing your trading performance is essential when you’re learning how to trade. My students and I take detailed notes on every trade to learn what went right and what can be improved. This detailed trading journal should include:

  • Your entry and exit time
  • Your short or long position
  • The share price
  • What the stock did
  • The reason you entered the trade
  • What you felt when entering and exiting the trade

Keeping a journal helps you better understand your trading style and psyche so you can learn from it and stop repeating the same mistakes.

Another important thing to understand is that you need a trading plan. Set goals, define your risk appetite, and stick to the plan. Have a loss limit so you won’t keep trying on a bad trading day and lose more money.

Remember, I don’t invest in these sketchy stocks; I actively trade them. Don’t hold and hope, thinking you’ll hit a home run. Take small wins, and take them often.

Cheapest Penny Stocks on TD Ameritrade Right Now

TD Ameritrade lets you trade OTC stocks, meaning you can access pink sheet stocks. They’re the least regulated OTC stocks and have no minimum share value, so you can usually buy them for literal pennies. Some of them are even so cheap they’re called sub-penny stocks.

I’m very careful when trading these cheap stocks. Sub-penny stocks are even sketchier than regular penny stocks, and many of them are outright scams or sold by shell companies like GDVM. If you do try to trade them, be very, very careful.

Instead of looking for the cheapest stocks available, find the best penny stocks that suit your trading strategy and risk appetite. You’ll have a better chance of profiting that way.

Frequently Asked Questions About TD Ameritrade Penny Stocks

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Can you short penny stocks on TD Ameritrade?

You can short penny stocks on TD Ameritrade, but it isn’t the best broker for shorting. Its short list is almost nonexistent. Short-biased traders will likely find a better broker for shorting somewhere else.

Is Ameritrade good for day trading penny stocks?

If you’re a long-biased trader, TD Ameritrade can be a good online broker for penny stocks. Short-biased traders should probably find another option. Find your niche, do your broker research, and then weigh your options.

Do you have to pay taxes on penny stocks?

Any realized gains that you make become capital gains. As a day trader, those capital gains will be considered short-term capital gains. You have to pay taxes on any realized gains, so make sure to do your research — and always consult a local tax professional for help with financial decisions.

Can you get rich trading penny stocks?

I’ve made over $7.4 million trading penny stocks. I have several millionaire and six-figure students. So yes it is possible with preparation, dedication, and discipline… But remember: our results aren’t typical. Most traders lose. That’s because they forget that small gains add up.

What is the difference between penny stocks and micro-cap stocks?

The difference between micro-cap stocks and penny stocks is how they’re classified. Penny stocks are stocks that trade below $5 per share, while micro-cap stocks are categorized that way if their market capitalization is under $300 million.

These labels aren’t mutually exclusive, either. A micro-cap stock can sell for under $5 per share, and a penny stock can have a market cap of under $300 million. In fact, they often do.

Are penny stocks hard to trade?

Penny stocks aren’t hard to trade as long as they’re liquid enough. Liquid penny stocks are easy to trade, so you’ll have a better time getting in and out of trades. Conversely, illiquid penny stock trades are more challenging because entering and exiting trades is harder.

Conclusion: TD Ameritrade & Penny Stocks

There are lots of online brokerage services to choose from. TD Ameritrade, E-Trade, Fidelity, Charles Schwab, and Robinhood are just a few options.

TD Ameritrade has platforms and tools that can help you learn the basics and start your journey toward becoming a self-sufficient trader.

I want all of my students to find the best retail broker platform for them. Don’t blindly copy me or follow my alerts. That won’t help you learn how to trade.

Should you use TD Ameritrade? Only you can answer that. I’ve had decent experiences with them.

If you’re a short-biased trader, you might want to look elsewhere. TD Ameritrade isn’t great for shorting. Always weigh the risk/reward.

Take advantage of learning in this incredible market. It’s how you can prepare for the next hot market. There are so many plays.

If you’re not trading stocks now, take this time to learn. If you are trading, be sure to prepare to adapt. Hot markets don’t last forever…

Apply for my Trading Challenge if you’re ready to prepare to trade through any kind of market.

Do you use TD Ameritrade to trade penny stocks? What’s your top broker? Let me know. I love to hear from you!

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”