Trading Penny stocks brings with it additional risks while trading low compared with more traditional, higher prices of stocks.
When we talk about Penny stocks, different people have varying definitions of what actually is. Many traders and investors consider stocks priced under $ 5.00 fall into this category, while others have a ceiling price of $ 2.00 or even $ 1.00.
What ever is your definition, this article will take a look at online brokers charge commissions for stocks are low so remember to consider what each definition brokers, it is not just your own.
It is not enough that trade Penny stocks require merchants to know and pump dumps, price manipulation and misleading press releases, but our brokers often have different Commission rates for these stocks as well. In the small print, no less.
When researching online brokers simply fails to pay attention to the low fees can advertising. If you know will trading Penny stocks, dig deep and look for the exact cost to trade the. look for things like: OTC stock supplies .BB, Pink Sheet stocks of supplies, low-priced stock supplies, stocks priced below $ 1.00, etc. Do what ever you need to do to learn these costs.Search these terms regarding the site for brokers, look for a schedule of commissions, their e-mail, call, whatever. Just do it!
Here is an example of why: you decide to proceed with Broker "X".They advertise shares trade commissions at $ 7.00 per trade.Open an account, add your capital and then start trading.
You have $ 10,000 to use for a trade and purchase 20,000 shares of a stock priced at $ OTC 0.50. Gets fill your order and you can see that you have previously received $ 57 p.m. in supplies, not the $ 7.00 you waited.
What happened?Your COMMISSION charged by $ 7, but then your broker "low cost" also charge a fee based on the amount of the transaction: your particular broker charged 1/2% of transaction amount or $ 50.00 in addition to the $ 7.00 per trade Committee.
$ 57 p.m. may not seem like much, but what about the total cost over time if you are an active trader; Let's take a look:
$ 57 p.m. for a trade to buy shares in total, approximately $ 57.00 on the second market to sell your shares and close the position for a total of $ 114.00. suppose they are active and complete trade round trip per day 1, and your trade 50 weeks out of the year: $ 114.00 x 5 days x 50 weeks = $ 28,500.00 in commissions from your broker "low cost".
Here is the cost of using a broker "flat fee" including low-priced stocks with no surcharge per trade, using the same $ 7.00 per trade: $ 14.00 (per trade) x 5 days x 50 weeks = $ 3,500 a.m. A huge $ 25,000 1.00 less!
So please, do yourself a favor and check your brokers fees before beginning to trade Penny stocks. can mean the difference between having a profitable or a losing year.
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