What is a Penny Stock Broker?
If you want to buy stocks, you can’t simply call a company and buy its shares. You must deal with a broker. A broker is a middleman who specializes in selling these shares. A broker can be an individual, a brokerage company, or an online platform. So what is a penny stockbroker?
Who can be a stockbroker?
Not just anyone can be a stockbroker. To become a stockbroker, one must pass two exams which are administered by the Financial Industry Regulatory Authority, Inc (FINRA): the Series 7 and the Series 63 exams.
Types of brokers
There are two key types of brokers: full-service brokers, who provide services such as investment advice and retirement planning, and discount brokers, who offer more limited services but charge much less.
How do you choose a penny stockbroker?
Some stock brokers will try to charge you with hidden fees, including:
- Mandatory Frequency of Trading
- Annual Maintenance Fee
- Charges Toward Withdrawal
- Inactivity Fee
- Minimum Brokerage Per Share Charges
- Large Order Surcharges
- Minimum Account Balance
- Minimum Brokerage Per Order Charges
- Surcharges For Low-Priced Stocks
Either be sure to read the fine print, or be sure to ask about these fees before you commit to a broker. It’s best to ask right away, rather than being unpleasantly surprised later on.
Other considerations when choosing a penny stock broker
In addition to price, consider these things before signing on with a broker:
- Volume Restrictions
- Research and Analysis Tools
- Short Selling Restriction
- Customer Service Phone support
Finally, don’t forget to ask around for reviews of particular brokers!
Do you have a penny stock broker?