4 Best Brokers for Penny Stock Trading of January 2025
Penny stocks are low-priced securities that trade for less than $5 a share. Not all brokers offer them, and those that do may charge higher fees.
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Penny stocks are risky, low-cost investments, though they don’t actually cost a penny. They are shares of small companies that trade outside of major stock exchanges, and are also known as over-the-counter (OTC) stocks.
The precise definition of penny stocks will vary by broker. Some consider anything trading under $5 to be a penny stock, while others put the cutoff at $2 or $1. (For more on penny stock trading, see our article on investing in penny stocks.)
Penny stocks may seem like a steal when stacked against companies that trade for $500 or more. This is where the backstory is important: These stocks are cheap for a reason. Because they are issued by small, yet-to-be-established companies, penny stock values can be turbulent. They are often hard to research and accurately value, and they trade infrequently, which means they can be tough to sell. (Here are other ways to find cheap stocks beyond penny stocks.)
Long story short, many brokers are a bit antsy about penny stock trading — but not all. Below are NerdWallet’s picks for the top brokerages for penny stock traders. These four brokers don't impose any additional fees or investment restrictions on domestic penny stocks.
Best Brokers for Penny Stock Trading
| Broker | NerdWallet rating | Fees | Account minimum | Promotion | Learn more |
|---|---|---|---|---|---|
4.4/5 | $0 per trade | $0 | Get up to $1,000 in stock when you fund a new account. | Learn moreLearn more on SoFi Invest's website | |
4.5/5 | $0 per trade | $0 | 1 Free Stock after linking your bank account (stock value range $5.00-$200) | Learn moreLearn more on Robinhood's website | |
4.7/5 | $0 | $0 | None no promotion available at this time | ||
4.4/5 | $0 per trade | $0 | None no promotion available at this time |
Fees
$0
per trade
Account minimum
$0
Promotion
Get up to $1,000
in stock when you fund a new account.
Fees
$0
per trade
Account minimum
$0
Promotion
1 Free Stock
after linking your bank account (stock value range $5.00-$200)
Fees
$0
Account minimum
$0
Promotion
None
no promotion available at this time
Fees
$0
per trade
Account minimum
$0
Promotion
None
no promotion available at this time
Choosing a penny stock broker
In case the above didn’t make this clear: There are significant risks that come with trading penny stocks, unless you are a sophisticated investor and you understand this market. You'll also want to be aware of the following when selecting an online broker to trade penny stocks:
Additional fees: Most of the brokers we review have eliminated trading commissions for stocks, so long as those stocks are well-established and trade on major U.S. exchanges such as the NYSE and Nasdaq. But many brokers still charge some kind of trading fee for OTC stocks and foreign stocks that aren't officially listed on U.S. exchanges. Only a few brokers are commission-free for penny stock traders, but we've made our list exclusive to brokers that don't charge commissions.
Limited penny stock selection: Some brokers only offer a small selection of relatively-established OTC stocks to investors, and others only offer one-off penny stock trades on request. If you're looking to trade especially-obscure penny stocks, you may find that many brokers don't allow access to them.
If you’re still on the fence about penny stocks, learn more about some of your other investment options:
Last updated on January 1, 2025
Methodology
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.
We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars).
This list is based on our OTC access score, which measures the size of a broker's OTC stock selection, whether OTC stocks are subject to additional fees, and whether OTC trades are available by default or have to be requested. Merrill Edge, Moomoo, SoFi Active Investing and Robinhood are the only brokers we review that earned the highest possible score in this category, meaning that they offer an unlimited selection of domestic OTC stocks to all users without any additional fees.
For more details about the categories considered when rating brokers and our process, read our full methodology.