Centerpoint Securities is an online stock broker that caters to sophisticated day traders looking to gain an edge in the market. The brokerage is a division of Precision Securities LLC, which is a member of FINRA and have been in business since 2000.

Commissions

Centerpoint offers customers three separate commission plans. The standard plan was created for active day traders; charging between $0.002 and $0.004 per share, depending on total trading volume for the month. The all-in plan caters more towards institutional clients, with trades costing anywhere from $0.0065 to $0.0045 per share. Traders who sign up for the per-ticket plan pay between $3.95 to $5.95 per trade. Clients who trade more than four shares million will pay reduced fees per share. Overall the commissions are expensive in comparison to other online stock brokers but as the saying goes “you get what you pay for.”

Opening an Account

Centerpoint Securities is tailored towards high net worth investors who can afford to deposit a significant amount of capital. The minimum deposit required to open an account is $30,000! This figure is a lot higher than the industry average, Interactive Brokers minimum is $10,000 while Etrade’s is $0 for a cash account. Surprisingly, Centerpoint doesn’t have an online application process. Instead, you have to send the required documents by email in a PDF format. Unlike, other well-known brokers, they do accept non-US residents, considering you meet the requirements.

Trading Platforms

Trading Software Fees

Centerpoint has three software tools, each charge a monthly fee, ranging from $120 to $505 per month. The hefty monthly fees can be avoided if you meet the minimum trading volume, this ranges from 200,000 to 1 million shares.

DAS Trader Pro

DAS Trader Pro is the cheapest platform available to customers. The platform provides everything a professional trader needs to make money. It contains an advanced charting tool, fast executions, supports multiple monitors, multiple stop types, real-time level 2 quotes and the latest market news. They also provide data for all the major exchanges including NASDAQ, NYSE, BATS and Direct Edge.

Sterling Trader Pro

Sterling Trader Pro is the second most expensive platform, costing $175 to $235 per month. This is a very sophisticated tool used by experienced traders of options, equities and futures. The platform has real-time level two, basket trading and programmable keys to enable faster trade executions. Programming enthusiasts can leverage the API capabilities to integrate their own software programs. In addition to access to data on all major US exchanges, the software displays data for several foreign stock exchanges – Europe, Brazil, Hong Kong and Shanghai.

RealTick

RealTick is Centerpoints most powerful platform, enabling clients to do everything possible to gain a statistical edge on competition. The pro version is a whopping $505 per month with data feeds included, there is an express version for $205. Both plans offer faster executions, options to optimize trading performance, access to a global broker network and liquidity from dark pools & exchanges. The Pro edition has a mobile app for those wanting follow the latest stock market news from their mobile phones.

Pros

• One of the best brokers for trading penny stocks, experts such as Timothy Sykes, Michael Goode and Tim Grittani use them as a broker. If these traders are recommending Centerpoint then they must be a high end broker.
• Another big advantage is quick trade executions, speed is crucial is on Wall Street. Other online brokers can’t compete, offering bad fills that could cost you hundreds of dollars.
• Have the best borrows making them the number one broker for short selling stocks. The broker works with four clearing firms allowing them to get access to hard to borrow stocks.

Cons

• The company only wants to work with high net worth individuals. This is understandable from a business perspective but the average person can’t afford $30,000 to open an account. Those new to trading will end up using cheaper brokers with slow executions.
• Expensive fees charged, only receive discounts if you trade with large volume.
• Not suitable for beginners and there is limited educational resources.
• Their stock scanning tool is limited so you will need to find a premium screening tool like Trade Ideas, Stockstotrade and Finviz, etc.

My Final Thoughts

Excellent broker used only by elite traders with large account sizes. If you don’t have enough money explore alternative brokerages like Interactive Brokers and Etrade.

Thanks for reading my review of Centerpoint Securities, please let me know your opinion in the comment section!

Robinhood is a stock trading app that is ideal for beginners looking for something that is easy to use and charge no commissions. The smartphone app allows anyone to buy and sell shares for free, in publicly traded companies on U.S. exchanges. Charging no fees is a revolutionary idea within the brokerage industry and has received significant media coverage due to their business model. There has to be a catch; it sounds too good to be true! Investors should be cautious because no fees means trade executions are slower than the leading brokers. The Silicon Valley start-up founded in April 2013, has 3 million customer accounts and is valued at $8.3 billion based on their latest round of funding. Robinhood currently only accept people from the United States but have plans to launch in the UK and Australia in a few years. It’s only a matter of time before they expand into new countries.

The company was setup up by Baiju Bhatt and Vladimir Tenev, former college students at Standford University. When they left college, they headed straight to Wall Street to set up their own business, specializing in creating trading platforms for some of the world’s biggest financial institutions. Here they noticed that electronic trading firms and high-frequency traders paid little or nothing to place thousands of trades every day, while retail traders were being charged $10-$20 per trade. They made it their mission to challenge the status quo.

Setting Up an Account

In comparison to other brokerages, it’s easy to setup an account and only takes 10 minutes to fill out your details, and then wait for approval.

To apply for an account, you are required to meet these four requirements:

• Possess a Social Security Number
• Provide proof of legal residential address within the US.
• Be a U.S. citizen over 18 years of age
• Have a mobile device to use the app (currently, they are working on the desktop to cater to everyone)

Once you fill out contact information and validate your SSN, you are allowed to attach your bank account, so you can deposit money to begin trading. On average it takes 1-3 days to get approved, in some cases, it can take up to 5 days if incorrect information is provided. If you’re still not verified after five business days, contact their customer service team to speed up the process.

Pro’s

No Commissions & no account minimum – Zero commission trades is the sole reason why Robinhood is quickly becoming the most popular broker for millennial trades. Brokerage firms such as Etrade and Interactive Brokers charge a fee every time you buy and sell stock; typically they charge $5 -$10 per trade. Over time this can add up and eat into your potential profits.

User Interface – The app’s design and the user interface is very slick. Their easy-to-use interface means it’s simple for novices to place trades. The interface’s theme changes color from light during market hours to dark during when the stock exchange is closed.

Great for Beginners – Ideal for first-time investors who have limited day trading experience and have a small amount of money to invest. Part-time traders can gain a feel for the market in a safe environment and then later upgrade to a broker that offers more advanced features such as level 2, charts and quick executions.

Robinhood Gold – The company recently introduced a premium service to allow members to trade after hours and open a margin account; the margin is limited to protect users from too much downside risk. The gold account costs a minimum of $10 per month; this allows you to borrow 2x times the amount of capital in your account, you need to deposit at least $2,000 to take advantage of this feature. They have a tiered pricing structure, the more buying power you request, the more you will have to deposit and pay. E.g. $4000 for $20/month and $10,000 for $50/month. Leverage is dangerous for novice traders as they can end up owing money to the broker.

Smart Notifications – Alert members to news such – earnings reports, dividends or stock splits, giving you timely information that will help you manage your portfolio.

Con’s

Slow executions – Fast trade executions are the difference between winning and losing trades. Trade executions are not as quick as the larger institutions, so you’re at a disadvantage because you don’t have the opportunity to get in and out of trades at the best possible prices. Hopefully, with Robinhood instant, the gap in speed to competitors will decrease and it now no longer takes 1-3 business days to get access to funds after selling.

Poor customer service – They have 2 million users, and the customer service team is struggling to serve all their customers, they need to invest more into customer support. Their office is tiny; it’s literally a handful of people in a small WeWork space in Santa Clara. Response to emails will be slow and you’ll need patience when calling the customer support team to solve any problems you may have.

Novice traders are blowing up accounts – Robinhood has greatly reduced the barriers to entry, making it faster and easier for anybody to trade stocks. This isn’t necessarily a good thing, 100’s of young, uneducated traders will blow up their accounts and soon realize trading isn’t as easy as it looks. Thousands of millennials lost money investing in the Snapchat IPO that turned out to be a disaster. Snapchat IPO’d at $25 and is now at an all-time low of $11.83.

Limited trading tools – Lack the necessary tools and resources to support day traders. They don’t provide extra features such as charts, stock scanners and level 2 as 90% of users are part-time traders who only place 3-5 trades per week.

No short selling – Robinhood doesn’t allow customers to short sell companies, so you’re unable to capitalize when the price of stocks decline. They hope to offer short selling as an order type in the near future.

Not suitable for penny stock traders – This app is better suited for buying blue chip stocks and ETF’s. There is a limited selection of penny stocks on Robinhood; most penny stocks trade on smaller exchanges such as the OTCBB and Pink Sheets. Millennials have a strange obsession with penny stocks on Robinhood, most of them randomly invest in a company under $1 hoping to strike it rich. Luck is not a strategy; you might as well flush your money down the toilet!

PDT rule – By offering free trades. they encourage people to trade more frequently, and they focus much on short-term price movements. Scalping is a waste of time due to high-frequency trading as you will get front-run by algorithms. The pattern day trader rule tends to stop most users from overtrading.

Frequently Asked Questions

How does Robinhood Make Money?

As the saying goes “there’s no such thing as a free lunch.” They make money by collecting interest on deposits within customers’ accounts and through premium services such as Robinhood Gold. So far the startup has raised $176 million, this has given the company a chance to create a  “wonderful brokerage experience” without having to worry too much about short term profits. They should become profitable within the next 1-2 years and will have a significant impact on financial apps soon.

How is Robinhood Similar to a Bank Account?

Bank accounts contain cash deposits, while a Robinhood customer account will contain securities (stocks) and cash. Funds can be transferred to your Robinhood account from your bank account and then can be used to buy and sell shares. All accounts are SIPC insured up to half a million dollars, and there is no account minimum.

Is the Robinhood App Safe?

As they store hundreds of millions, they are vigilant with security because any breaches will destroy their reputation and put them out of business. They are a registered broker-dealer and a member of SIPC and FINRA just like other penny stock brokers such as Etrade and TD Ameritrade etc.

They are more cost efficient than other brokers who have dozens of storefront locations, who use legacy technology and paper-based accounting. As a result of these two factors, they can drastically reduce their costs and will not have to charge customers commissions or any other unnecessary markups.

Robinhood Alternatives

For investors outside of the US, there are some are similar apps you can use to buy stocks for free! TradeZero.co is a cheap alternative; they are a brokerage firm operating in the Bahamas. TradeZero give free limit orders if the order does not create an immediate mate. Since they are based in the Bahamas, you can bypass the PDT rule. Another good option for people in the UK is freetrade.io, they are another commission free broker that launched in 2019. Etrade and Interactive Brokers’ are the best-paid alternatives for those serious about day trading.

In conclusion, it will be interesting to see how their business model will fair out and how the big brokers will react to their rapid expansion.

While penny stocks are risky to trade for beginners, they are a great way to capture massive returns with a small investment. Penny shares are cheap to buy and volatile, meaning fortunes can be made or lost overnight. For every trader who became a multi-millionaire, there are horror stories of people blowing up accounts and end up owing money! With that in mind, before you open an account with a brokerage, make sure you’re 100% ready.

Although there are dozens of stock brokers with no account minimums, not many of them are suitable for penny stocks. Luckily for you, I have compiled a list of the best penny stock brokers with no minimum deposits and charge cheap commissions.

TD Ameritrade 

• TD Ameritrade is one of the most reputable online brokers with no account minimums for clients!
• Ideal for penny stocks as they charge a $6.95 fee per trade with no surcharges on stocks under $1, making it more affordable to trade OTCBB and Pink Sheet stocks.
• Two great trading platforms available to all customers – Thinkorswim and Trade Architect.
• Robust charting tools that can be customized to meet your requirements.
• Don’t have annoying inactivity or maintenance fees.
• Free access to real-time quotes and level 2, perfect for active day traders
• Customer service is average, to lower costs they outsourced it to cheaper countries such as India.

E-Trade

• E-Trade is my number one pick as the best broker for trading penny stocks.
• Is a highly recommended broker for short selling shares under $5.
• Flat fee commission structure with no extra fees on penny stocks!
• Discounts given to active traders, $6.95 commission for less than 30 trades every quarter, make more than 30 trades and the fee drops to $4.95.
• Don’t accept customers from certain countries which sucks for people in the UK.

Ally Invest

• Formerly known as TradeKing, Ally Invest are another penny stock broker with no minimum deposit required.
• $2,000 account minimum for margin accounts, giving people the chance to profit from short selling companies.
• Suitable for beginners traders new to stock trading and don’t have much money to invest.
• Commissions are low, $4.95 per trade is very competitive within the brokerage industry.
• User interface is appealing to users, making it faster and easier to execute trades.
• Charge a one-cent surcharge per share on stocks below $2.
• Regularly run promotions for new customers. Currently, they offer $500 worth of commission-free trades for clients who deposit $10,000.
• Trading platform and tools aren’t as advanced as the top online brokers but is improving slowly.

Robinhood

• Robinhood has quickly become the most popular broker among millennials.
• The start-up broker offer commission-free trades to millions of people around the world.
• While getting free trades may seem like a great deal, there is a catch. Executions will be slower than the industry standard, penny stocks are volatile and speed is crucial to make consistently profitable trades. More suited towards long-term investors.
• Despite the downsides Robinhood are great for first-time investors looking to gain experience and have fun.
• UI design is beautiful and easy to navigate.

TradeMonster

• TradeMonster is a subsidiary of OptionMonster, owned by well-known financial commentators, Pete Najarian and Jon Najarian.
• Their parent company specializes in Options trading and setup TradeMonster to offer more diverse financial products to the market.
• In 2015, they merged with OptionsHouse and were later taken over by E-Trade.
• $0 account minimum required to open a cash account.
• $0.005 surcharge per share on stocks below $2.
• Not a good option for beginners.

Degiro

• Degiro is a low-cost Dutch broker, only available to European investors.
• Low account minimum, €0.01 has to be deposited during the verification process.
• Limited selection of penny shares on their platform but they have ridiculously cheap fees.
• Good choice for traders in Europe as they find it challenging to find penny share friendly brokers. The majority of US brokers won’t accept costumers from Europe or require a deposit of $10,000.
• Compensation scheme protects deposits up to €20,000.

Even though these companies have low minimum requirements, I advise picking the broker that suits your trading style.