Penny and OTC Stocks at Schwab: Takeaways
• Charles Schwab allows trading in both penny stocks and over-the-counter equities.
• OTC stocks, but not necessarily penny stocks, have a commission of $6.95. Trades of foreign ordinary shares are $50.
• You can place orders for penny and OTC stocks on any of Schwab’s user-friendly trading platforms.
If you're looking for a brokerage firm that offers trading in OTC and penny stocks, Charles Schwab is a solid choice, although the costs might be a downside for some.
Overview of Penny and OTC Equities at Schwab
With a Charles Schwab account, you can trade over-the-counter and penny stocks. Penny stocks are equities that trade for a lower price, typically under $5, $3, or $1, depending on the classification. These stocks can trade either on major exchanges or the OTC market. OTC stocks, in contrast, are those traded outside of the major U.S. exchanges like the New York Stock Exchange and Nasdaq.
Schwab requires settled cash for any stock priced below $1.00, and stocks under $3.00 can’t be bought using margin.
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Cost of OTC and Penny Stocks at Schwab
Schwab does not charge any commissions for online trades of U.S.-listed stocks and ETFs. There are no extra fees for penny stocks traded on major exchanges.
For OTC stocks, however, the commission is $6.95 per trade, regardless of the stock's price. This applies to any OTC level, including OTCQX, OTCQB, Pink Sheets, or Grey Market. If the stock is a foreign ordinary share (indicated by a ticker symbol ending with ‘F’), the commission is $50.
If you make a penny or OTC stock trade over the phone (not through the app), there’s an additional charge of $5 for using the automated system, or $25 for talking to a live representative.
Finding Penny Stocks on Schwab
Schwab’s equity screener makes it easy to find penny stocks. To access the search tool, click on the Research tab in the website’s top menu and select the link for Stocks (note: the mobile app doesn't have the stock screener). On the following page, click on the screener button to start the search.
In the left-hand menu, under Basic Criteria, choose Price. You can enter a maximum price for your search, such as $5 or $1. When we selected $5, we got over 6,700 results.
Finding OTC Stocks
The same search engine can be used to find OTC stocks. Instead of using Price as a filter (or in addition to it), choose Exchange. From there, you can select only the OTC market. When we did this, we got over 6,300 results.
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Researching Penny Stocks at Schwab
Schwab’s website and mobile app allow you to view stock profiles for penny and OTC stocks. Simply enter the ticker symbol or company name in the search bar at the top of the platform. On the website, you can click on the ticker symbol from the search results to access the stock’s profile.
We found useful information on penny and OTC stocks, although some profiles didn’t have all the data points. For example, for American Battery Technology Company (ABAT), a penny stock on Nasdaq, we found ratings from both CFRA and Refinitiv. The former rated it as a strong sell, while Refinitiv gave it an outperform rating.
How to Buy a Penny Stock at Schwab
The process for placing an order for penny or OTC stocks at Schwab is the same as any other stock. On the stock’s profile on the website or mobile app, click on the buy or sell buttons. This brings up the same order ticket with all the trade options. In the Action menu, you can choose buy, sell, or sell short. The available order types include market, stop, and limit. For advanced trades, Schwab’s thinkorswim platform offers more complex options, though short-sell orders must use the regular sell button.
Updated on 1/23/2026.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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