Firstrade

Firstrade Penny Stocks and OTC Stocks Trading


2019 Firstrade penny stock fees: commission charged for buying pink sheets/OTCBB/stocks priced under $1. Rules and policy. Is Firstrade good for (offers) penny stocks trading?



Does Firstrade Offer Penny and OTC Stocks Trading?


If you’re interested in over-the-counter stocks, Firstrade has a large selection. This article will give you the low down on everything the broker provides for OTC traders.

First, we need to define our terms. A penny stock is any stock that trades below $5 on any exchange. So a stock on the New York Stock Exchange priced at $4.99 is a penny stock.

An OTCBB stock is any equity that trades on the over-the-counter Bulletin Board. And a pink sheet stock is any equity that trades exclusively on the pink sheets. An OTCBB or pink sheet stock could be a penny stock; but a penny stock is not necessarily a pink sheet or OTCBB stock.


Firstrade OTC Stocks Cost


Firstrade charges $0 (yes, zero) commission to trade penny stocks. The broker used to charge commissions for stock trades and surcharges for penny stock trades. But not anymore. It is now completely free to buy regular stocks, penny stocks, OTCBB stocks, and pink sheet stocks. On the sell side, the broker passes on regulatory/exchange fees; although these are very small.

However, Firstrade is no longer accepting buy orders for Over the Counter (OTC) bulletin board and pink sheet stocks that trade at or below $0.10.


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Firstrade Pink Sheet Stocks


Using Firstrade’s stock screener, we were able to discover 10,306 securities currently trading on the pink sheets. It’s easy to conduct this type of search. You just need to select ‘Exchange’ under ‘Market Segment’ in the search criteria. Then place a check mark in the box next to ‘OTC Pink.’

One example in the list of 10,000+ pink sheet stocks we found is 808 Renewable Energy Corp. Trading under the ticker symbol RNWR, it pays no dividend and has very low volume—less than 9,000 shares a day. The market cap is less than $500,000. And the current price is just 20¢.


Firstrade OTCBB Stocks


When we selected the Bulletin Board, Firstrade’s screener returned just once stock. And the broker’s website didn’t recognize the ticker symbol. So obviously this selection isn’t going to yield you any investment opportunities. For over-the-counter securities, be sure to select the pink sheets.


Firstrade OTC Stocks


Penny Stocks


Penny stocks are a very different issue. Specifying a share price of $4.99 or under returned 10,633 equities. This figure includes not just the OTC marketplace, but the major exchanges as well.

It’s possible to specify a specific exchange and a price. For example, setting the price at $4.99 or less and choosing Nasdaq returned 761 stocks. One of these is Agenus, Inc. Trading under the ticker symbol AGEN, the stock has an average volume of around a million shares per day, which is quite high. Despite the activity, the company has a market cap of just $356 million.

Firstrade’s stock profile for Agenus reveals a Morningstar rating of 3 stars, which is middling. The analyst ranks the stock’s uncertainty as very high, a bad sign. AGEN currently has a price target of $2.98. It was trading at $2.65 at the time of publication.

AGEN has a moderately active options market. We found thousands of contracts with a total of four expiration dates. Implied volatility is high, which means traders are expecting large price swings going forward.


Comparison


Compared to some of its rivals, Firstrade’s performance has advantages and disadvantages. WellsTrade doesn’t offer the ability to search for OTC securities. Although the broker-dealer does provide trading in penny stocks, it has a higher commission for them ($34.95 or even higher).

Robinhood is a zero-commission broker like Firstrade. But unlike Firstrade, Robinhood doesn’t have a stock screener that is able to scan the OTC markets. During our research, an OTC stock that appeared on the Firstrade screener (FNRC) was unavailable on Robinhood’s platform.

Robinhood does provide the ability to search by sector and price; so it is possible to look for penny stocks within an economic segment (such as transportation).

Like Robinhood and Firstrade, Webull charges $0 trade fees. Like Firstrade and unlike Robinhood, it does provide a decent screener. However, the broker doesn’t offer any over-the-counter securities.


Risks of Trading OTC Assets


If you do decide to trade over-the-counter stocks, keep in mind that these equities come with increased risks. The OTC marketplace tends to have lower liquidity than the major exchanges, which means it may be difficult to find a buyer or seller for any investment.

Furthermore, volatility tends to be quite a bit higher in the over-the-counter space. This can cause prices to jump and drop without warning. Bid-ask spreads are usually wider for OTC stocks, which makes trading them more expensive.

Listing requirements for OTC equities are also less stringent. Because of this, securities fraud is more likely.


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