subject: Choosing the Best Penny Stock Broker by Differentiation [print this page] Choosing the Best Penny Stock Broker by Differentiation
A story is told in the stock market circle which goes: Why are stock brokers called brokers? Answer: because they are broke! You got to admit this one's funny. But even if it is, it should start you thinking whether you will get the service that you need when you choose your penny stock broker.
Your brokers are your representative for when you are buying or selling in the trade market. Since these brokers will be focusing on the kind of stock which you prefer and that is the penny stock, you then have to contemplate over the two types of brokers prior to making your choice.
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The Discount Broker- There are two basic categories of brokers and their expertise can be gleaned from their name. The fees of a Discount Broker can go as low as $5 per trade executed but then they do not give you advice and will merely follow orders based on your own decisions. With this low rate however, you can freely deal with penny stocks as much as you can as your profit can be a few hundred dollars per transaction. Since you get no advice from discounted penny stock brokers, you have the option of asking around for advice from other experts, get tips and real-time advice online or maybe how-to videos that abound in the internet. That is if you are really intent in hiring the services of a discount broker.
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The Full Service Broker- a Full Service Broker on the other hand will you advice and suggestions for you to maximize your investments at a cost of a few dollars added to his commission per transaction. This should be a plus right? But then despite this added services of a full service broker, it does not automatically equate to additional profit as they are not that keen on penny stock. Also, their commission rates may require a larger percentage of your profit per transaction. Should you think that the services of a full service broker is worth it, then go for it!
The decision will still rest on the kind of penny stock broker that will fulfill your requirements. Whatever kind of a broker you will opt for, remember to choose wisely.
