Best Brokers for Penny Stocks: Fees and OTC Rules

The best broker for penny stocks depends on what you trade and what you pay. The seven brokers below publish different commissions, different minimum order sizes and different limits on which OTC securities you can buy. Webull and Firstrade list $0 commissions on OTC trades, Schwab and E*TRADE list flat $6.95 fees, and IBKR and TradeStation charge per share. This page is for retail investors who trade or research penny stocks and need to know what a broker actually allows before they fund an account.

This page compares published terms. It does not rank brokers on quality, tell you what to trade, or say any stock is worth owning.

How this comparison was built

Every price, restriction and registration detail here comes from the broker’s own pages, read on 11 October 2026, or from FINRA BrokerCheck. We did not open accounts or place trades, so we say nothing about platform feel, execution quality or customer service. Brokers change fees often. Check the linked page before you act.

The order of the list is by lowest published cost for an online OTC trade, with brokers whose OTC cost we could not confirm placed last. It is not a rating.

What “penny stock” means for your broker

The SEC’s Rule 3a51-1 sets the definition. In its text, a security priced at five dollars or more in a transaction is generally excluded, along with certain exchange-listed securities and others the rule lists. Many penny stocks trade over the counter, but not all, and a stock under $5 on Nasdaq may fall outside the rule.

Why that matters to you: SEC Rule 15g-9 requires a broker-dealer to approve your account for penny stock transactions and obtain a signed agreement before certain trades. That is why some brokers show an extra disclosure screen or an added permission, as Webull and IBKR describe below. For the market structure behind it, see OTC markets explained.

Cost illustration: a 1,000-share OTC order

These are illustrations using round numbers, before SEC and FINRA pass-through fees, and only for brokers with a stated rate. Assume 1,000 shares at $0.50, a $500 trade.

• Webull: $0 commission per its pricing page.
• Firstrade: $0 per trade per its pricing page, if the stock meets its trading criteria.
• IBKR Pro Fixed: 1,000 x $0.005 = $5.00, which equals the 1% cap of $5.00 on a $500 trade.
• TradeStation: 1,000 x $0.005 = $5.00 under the sub-dollar/OTC per-share fee, plus any per-share clearing fee (TradeStation lists $0 to $0.003 per share by monthly volume).
• E*TRADE: $6.95, or $4.95 with 30 or more qualifying trades in a quarter.
• Schwab: $6.95.
• Fidelity: Not confirmed.

The per-share brokers cost more as share counts rise on very cheap stocks, until a cap applies. Flat-fee brokers do not change with share count. Commission also ignores the bid-ask spread, which in thinly traded stocks can be larger than any fee. See what a market maker does.

Which OTC securities can you actually buy?

A broker accepting “OTC stocks” does not mean every OTC symbol is open.

• Webull says it supports 500+ OTC securities, with limit day orders only and no margin or short sales. It publishes minimum purchase quantities by last price: below $0.01 you cannot open a position; $0.01 up to below $0.099, 1,000 shares; $0.10 up to below $0.999, 100 shares; $0.999 and above, 1 share.
• Firstrade says purchases need a price above $0.10, and orders for stocks at $1 or below must be at least 100 shares.
• Fidelity says it blocks buy and opening orders in Expert Market, Grey Market and Caveat Emptor securities. Those are OTC Markets Group classifications, not exchange tiers.
• Schwab says Expert and Grey Market securities are not quoted by broker-dealers.
• IBKR requires a separate US penny stock permission and says it does not disclose the requirements.

Where a broker’s tier policy is Not confirmed in the picks above, we found no official page that states it.

Regulation: what to verify yourself

All seven broker-dealers showed as active on FINRA BrokerCheck on 11 October 2026, and each broker’s own site states SIPC membership (the E*TRADE brokerage entity appears under Morgan Stanley). BrokerCheck also shows disclosure flags for each firm, as it does for most large firms, so open the report and read it. SIPC covers missing cash and securities at a failed member firm, not market losses.

Red flags vs normal

Normal for any broker: a signed penny stock disclosure, limit-order-only rules, a minimum order size on sub-dollar stocks, and no margin on OTC securities.

Worth a closer look: a broker that does not appear on BrokerCheck, one that promises access to any OTC symbol with no restrictions, or fees that are not on a published schedule. Also read the dilution risks that apply to many low-priced issuers, which no broker fee schedule will show.

What to check in a filing before you place an order

A broker only gets the order to market. Before you trade a specific symbol, read its filings on EDGAR: the latest 10-K or 10-Q for the share count, 8-K Item 3.02 for unregistered sales, and any prospectus supplement (424B) or shelf registration. See how to read an 8-K.

Questions to ask a broker before you fund an account

Use this list with any broker, including ones not covered here.

• Which OTC tiers can I buy, and which are sell-only? Look for named categories such as Expert Market, Grey Market and Caveat Emptor, as Fidelity does.
• Is there a minimum price or minimum share count on low-priced stocks? Webull and Firstrade publish theirs.
• Are orders limit-only, and are extended hours closed? Webull and Firstrade state both limits.
• Does the stock need to be DTC eligible? Firstrade says its OTC penny stocks must be.
• Can I transfer in positions I already hold? Firstrade says it does not accept transfers in of OTC penny stock positions.
• What happens to a stock I hold if its OTC classification changes? Fidelity says new sell orders for a restricted security are treated as Grey Market and may execute at a price far from the last quote.
• Are there extra fees on foreign ordinary shares that trade OTC? Schwab, Fidelity and Webull each publish one.

Why price and access matter more than the app

Brokers that look similar on a $0 commission banner differ on the points that decide whether an order can be placed at all. A broker that blocks purchases in a tier does not charge you for the order you cannot make, and a broker that accepts the order may still fill it far from the last quote when trading is thin. Read the broker’s own OTC help page first, then the issuer’s filings. Our guide to level 2 market data explains how to see depth before you place an order.