Etrade Penny Stock Commissions and Fees. Etrade OTCBB Stocks Trading.
Etrade penny stock commission, fees charged for buying pink sheets/OTCBB/stocks priced under $1 in 2017. Rules and policy. Is Etrade good for penny stocks trading?
Does E*Trade Offer Penny Stocks?
Yes, investors at E*Trade will find a good selection of over-the-counter stocks available for trading with the broker’s technology. OTC securities tend
to have lower volume and less liquidity than equities that trade on one of the major US exchanges. This creates an environment that is much more
volatile and risky. Also known as penny stocks, OTC equities can be boom or bust.
E*Trade Penny Stock Fees
- E*Trade penny stock commission: $6.95
- E*Trade penny stock surcharge: $0
- E*Trade large order surcharge: $0
- E*Trade active trader discount: $2 lower commission for clients making 150+ trades per quarter
E*Trade stock and ETF commission is $6.95 per trade (drops to $4.99 per trade if making 150+ trades per quarter), options commission is $6.95 plus $0.75 per contract. E*Trade and firms in the
Best Penny Stock Brokers list
do NOT have surcharges and additional fees on Pink Sheets/OTCBB/stocks priced under $1.
List of all E*Trade charges is under this link.
Risks of Trading Over-The-Counter
The big exchanges in the U.S. have strict requirements that a company must meet in order to get listed. The OTC market, by contrast, has few requirements and little
government regulation. Because there is less oversight, there is a greater possibility for criminal activity and other fiascoes.
OTC Stocks Available at E*Trade
The E*Trade stock screener returns over 2,000 stocks that trade under $4. Unfortunately, the broker’s screener doesn’t have the ability to search exclusively for securities that trade on OTC exchanges.
One example of a penny stock that E*Trade customers have access to is 3PEA International, Inc. This security trades on the OTCQB market, and its ticker symbol is TPNL. Its most recent trade price was $0.42. It does not pay a dividend, although it does provide financial statements.
A second OTC security that appears in E*Trade’s screener results is Aerius. The ticker symbol is AERS. The stock’s profile page does not show any news, but Aerius’s average volume is above 30,000, a good number for a penny stock. Its last trade price was less than 1¢.
Buying a Penny Stock on E*Trade
E*Trade does not charge any additional fees for OTC trades. The broker’s regular $6.95 commission applies. There is also a $2 discount for active traders. Penny stocks can be traded on the website, the broker’s mobile app, and its desktop platform. Unfortunately, the E*Trade site doesn’t have a trade bar.
When you’ve found a penny stock you want to buy or short, submitting the order is just as easy as placing a trade for a regular stock. Clicking on a buy or sell button on the stock’s profile page produces an order entry form. Both market and limit orders can be used.
Can You Short Penny Stocks on E*Trade?
Short selling of OTCBB and Pink Sheets on E*Trade is not allowed.
TD Ameritrade’s stock screener can search specific exchanges, including the OTC markets. Because E*Trade
doesn’t offer this capability, finding penny stocks is rather difficult.
On the flip side, E*Trade customers don’t have to pay a surcharge to trade OTC stocks. OptionsHouse, by contrast, charges 0.5¢ for stocks that trade under $1.
Merrill Edge traders must have at least $25,000 in assets before they can start trading OTC securities. And even then, the broker doesn’t allow more than 20% of an account’s value to be in penny stocks. E*Trade has no such requirements.
E*Trade Rules and Policy on OTCBB and Pink Sheets Orders
- Short selling is not allowed.
- Generally, stop on quote orders are not allowed for OTCBB/Pink Sheets trading.
- Due to the potential volatility and differential in price, for your protection, market orders are not accepted on any stocks trading under $1 per share.
Only limit orders are accepted for stocks trading below $1.
Note: When buying OTCBB stocks, a limit order must be placed on-line. You may contact customer service at 1-800-ETRADE-1 to review whether a market order can be
placed by a broker during normal trading hours. The broker assist fee will not apply.
Non-equity, bulletin board, OTC, and Pink Sheets stocks are not eligible for the Market on Close price type.
OTCBB/Pink Sheets trades do not accept fractions less than 1/16ths. Although many Pink Sheets trade in decimals, the system does not accept the entry of a decimal on many securities.
Therefore, it is often necessary to utilize a broker to place the trade at no additional fee.
Sub-Penny Trading: E*TRADE allows customers to enter orders on NASDAQ and Listed stocks at prices under $1.00/share with up to 4 decimal places ("sub-pennies"). Orders for Pink Sheet and OTC Bulletin Board stocks at prices under $1.00/share with up to 4 decimal places will be accepted.
Read detailed E*Trade Review »
Updated on 3/22/2017.