Small cap stocks are penny stocks are all those stocks that are issued by small companies, trade in OTC and PINK Sheets, and have price less than $1 per share. If the investors are interested to put their money in penny stocks, there are many pros and cons of penny stock investment. Penny stocks offer big gains to traders and the risk is also high.

New investors usually wonder how to buy penny stocks. For new and ordinary traders, they must have a ‘Penny Stock broker’. So actually who is a broker? A broker is a person who can be considered as the middleman between the investor and the market. The trader tells the broker that he want X amount of penny shares of a company, and it is the broker’s job to complete the order. However it’s up to the investor, he can utilize a full service broker for getting help in trading, or a discount broker. A discount broker is a person who allows you to do your own trades through an online interface. So using a discount broker helps you to save a lot of money on commissions; the amount of money that is given to broker for making an order is known as commission. A discount broker is quite a better suggestion for buying penny stocks.

There are many aspects to consider, when choosing a penny stock broker, some of them are: Commissions: How much they charge per trade order, extra fees for trading large share orders or low priced stocks, least amount to open a trading account and inactivity and maintenance fees charged.

Some brokers may charge lower basic commissions, but check the difference with additional fees for trading low-price stocks, or by not including premium features at lower levels of trading penny stocks.

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