Trading penny stocks -- formally known as microcap stocks -- with the online brokerage Scottrade is similar to buying or selling other stocks through the service. However, you'll pay a small additional fee when trading stocks priced at less than $1. Through your Scottrade account, you can receive penny stock analysis and other investment information. Scottrade requires a $2,500 minimum to open an account, although there's no minimum for opening an individual retirement account.
Penny Stock Trading Fees
As of 2014, Scottrade charged $7 per trade. If you're purchasing a penny stock trading at less than $1, add 0.5 percent of the stock's principal value to the fee. One caveat: If you're purchasing thousands of penny stock shares, that 0.5 percent really adds up. In addition to the standard $7 fee, you'll pay $4.95 to purchase 1,000 shares of a stock trading at 99 cents. Purchase 10,000 shares of that stock, and the total fee is $56.60. However, certain penny stocks require going through a Scottrade broker rather than trading on your own, and the current broker fee is $32 per transaction. These stocks are listed on so-called "pink sheets," and such companies often do not file reports or financial statements with the U.S. Securities and Exchange Commission.
- Brokerage Review: Scottrade Penny Stock Fees
- U.S. Securities and Exchange Commission: OTC Link LLC
- Internal Revenue Service. "IRA FAQs - Investments." Accessed Oct. 21, 2020.
- U.S. Securities and Exchange Commission. "Penny Stock Rules." Accessed Oct. 21, 2020.
- U.S. Securities and Exchange Commission. "Microcap Stock: A Guide for Investors." Accessed Oct. 21, 2020.
- OTC Markets. "Current Market." Accessed Oct. 21, 2020.
- E-Trade. "Retirement." Accessed Oct. 21, 2020.
- TD Ameritrade. "Open an IRA in 15 minutes." Accessed Oct. 21, 2020.
- Depository Trust and Clearing Corporation. "FAQs: How Issuers Work with DTC." Accessed Oct. 21, 2020.
A graduate of New York University, Jane Meggitt's work has appeared in dozens of publications, including Sapling, Zack's, Financial Advisor, nj.com, LegalZoom and The Nest.