Scottrade Penny Stocks
Scottrade penny stock commissions and fees charged for buying pink sheets/OTCBB/stocks priced under $1 in 2017. Scottrade rules and policy on penny stocks trading.
Does Scottrade Offer Penny Stocks?
Traders who are interested in penny stocks securities will find resources for them at Scottrade. The broker’s stock screener can search for penny stocks that trade under $4, which eliminates any security that trades on the New York Stock Exchange. However, the screener isn’t able to search exclusively for OTC stocks.
Penny Stocks at Scottrade
After entering criteria into the Scottrade equity screener, you can browse through the results. There are 6,619 stocks priced under $4. The screener’s securities can be sorted by many different topics, such as price performance, earnings, and industry.
One penny stock that appears in the results is All-American Sportpark, Inc. The stock trades on the Pink Sheets, and its ticker symbol is AASP. It last traded at 40¢, and it has an average daily volume of just 6,000 shares. Scottrade’s profile page displays no news for this company, which isn’t unusual for an OTC stock. There are financial statements for AASP, but they are rather limited.
A second example that is included in Scottrade’s results is Znergy, Inc. This stock has a higher volume than the last example, with 13,500 shares traded daily on average. The ticker symbol is ZNRG, and its most recent share price is 6.7¢. There are no equity reports available for the stock, and its earnings history looks rather troubling.
OTC stocks at Scottrade typically have charts, but keep in mind that with little volume, a daily chart can be somewhat inadequate.
Scottrade Penny Stock Fees
Scottrade charges $6.95 a trade, plus 0.5% principal on Pink Sheets/OTCBB/stocks priced under $1. This is very expensive and we don't recommend Scottrade for buying penny stocks.
It's much cheaper to trade stocks priced under $1 with one of the Top Penny Stock Brokerage Firms.
Buying a Penny Stock on Scottrade
To place an order for an over-the-counter stock, just follow the same steps you normally would for a regular stock. Clicking on the ‘Trade’ button on Scottrade’s website creates a trading form. The broker’s trading bar at the bottom of the website can also be used to place trades for penny stocks, as can the Scottrade mobile app and desktop platform.
Be aware that Scottrade imposes a surcharge on stocks that trade under $1. The fee is 0.5% of trade value. This is in addition to the broker’s normal $6.95 commission.
Don’t Forget the Risks
While looking for the next penny stock that is going to rocket into the stratosphere, don’t forget that the OTC market is inherently more risky than the major US exchanges. OTC exchanges have less government oversight, more volatility, and less liquidity.
These realities create an environment where criminal activity is more likely, and buyers are harder to find. The Pink Sheet marketplace especially has seen its share of securities fraud over its lifetime.
What a disappointment it is that Scottrade’s screener cannot search specifically for OTC securities. Other brokers do provide this important
functionality. TD Ameritrade and Schwab, for example, both offer the capability.
Not all brokers charge an additional fee for trading penny stocks. TD Ameritrade,
Fidelity, and Tradestation charge nothing extra for OTC trades. On the other
hand, WellsTrade clients must pay 3.5%, with a $34.95 minimum commission.
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Updated on 3/22/2017.