TD Ameritrade and Penny Stocks

This hub is a little more specific to those who have accounts with TD Ameritrade. Penny stocks can be traded through TD Ameritrade with relative ease, due to their awesome interface. I consider TD Ameritrade to be one of the premier online brokerages out there. I remember back when I first set up my account with them, the brokerage was originally called “Datek”, but then later down the line I believe Datek was bought out by Ameritrade, and then finally TD Waterhouse merged with Ameritrade to create what is now known as TD Ameritrade. Consolidation is truly the trademark of business dealings in the 21^st Century, I tell you that. Don’t get me wrong, I have no beef with any of the transitions and name changes that have been made as of yet…it has not affected the quality of the trading platform, and if anything, the trading platform now is better than ever. But before I go crazy on the features of the trading platform, I did want to point out that I believe TD Ameritrade is an excellent choice if you want to trade penny stocks online. I have used them exclusively since 2001 (well, back when they were Datek) and they have always given me good customer service. Although the majority of my trading (about 99%) is done through the online system without any need for human interaction, any time I did have to call their offices, they were very accommodating, knowledgeable and helpful. One time I had a situation where one of the penny stocks I invested in basically got bought out by another company, and the stock just sat there with no trading activity for months on end. I called TD Ameritrade to find out more about what I should do and if I should try to liquidate or just hang on for any changes, and they were very helpful in resolving that situation.

When you trade penny stocks through TD Ameritrade, you use their regular order screen; in other words, there’s no difference in trading screens between the blue chips (a la NYSE or whatever) and the penny stocks. They always give a warning about the OTCBB stocks, because they know the nature of those markets, so they basically tell you (in legalese terms) that if you lose your shirt, nobody is to blame but you. They also provide several trading tools that are truly useful. You can find the majority of them under the “Research & Ideas” tab on your account interface. Also, the “Trading Tools” tab has other more advanced features, one of which is the ever-popular “Thinkorswim” trading tool. Of course, one of my favorite tools to use is the “Charts” tool, because they have a great interactive charting tool (known as the “Advanced Chart”) that keeps track of the open, high, low, and close of each day’s trading session, and it has several technical analysis overlays you can add as well. I have found that the speed of their order execution is top-notch, and I have never had any problems getting filled, even using limit orders. I will say, however, that getting filled in some stocks in the OTCBB markets can be a crap shoot if you use limit orders, because sometimes they’re just illiquid, so you will need to keep that in mind—that would be true no matter what brokerage you use, though. Commissions (as of this writing) are a flat $9.99 per side, if you use the automated online trading desk. If you go through the interactive Voice Response (IVR) phone system, it will be $34.99, and if it’s a broker-assisted trade, it will be $44.99. This is for unlimited shares, market or limit orders.

Well, I hope you enjoyed this hub about using TD Ameritrade for trading penny stocks. PennyInsanity, over & out.