For trading penny stocks online you are required to have an online account. And this is here, where an online broker plays a vital role. But it is not an easy task to locate an online stock broker. There are some factors which should be considered while selecting an online broker.
The first factor which should be considered while selecting an online broker is the brokerage rates. Brokerage rate is the price you pay for buying and selling of penny stocks. Usually, the brokerage rate is based on a sliding scale. One should purchase more volume of stocks in a single transaction so that the cost per unit of the stock is lessened. Sometimes the exact sliding scale varies and may be negotiable for large purchases. You must go through the rates of different brokers and compare them and choose the best broker who satisfies all your requirements of buying and selling of penny stocks but don’t forget to go through all the terms and conditions before choosing any broker.
The second factor which should be taken into account, for selecting an online broker is the account fees. Before entering any contract with the broker for trading the penny stocks
, you must be aware about the account fees or any other hidden fees charged by the broker. All fees required to be paid while opening an account must be clearly stated. The terms and conditions of the contract should be so arranged that you are not made bound to pay any hidden charges.
The next factor is the phone access of the broker. Sometimes online services go down for hours together, either due to interruptions to broadband services, power failures or computer problems. In such cases you need to have the phone access of your online broker for getting information on the penny stocks from the broker. It is not advisable to use a broker who does not provide phone access.
The last but the most important point is the access to your money. Even though the money is held in cash account by your broker but you should have an access of it through trading account. You may be linked through a master card or any other card. A good broker will always advice you of the best method of getting access to your money through the several options which are open to or are available for everyone as a client.
There are some online brokers, who for opening an account with them, offer extra incentives. This step of theirs should not be suspected that why should they give incentives to you for no reason because they know that ultimately they are going to earn through you.