Trading 212 is a London-based broker aiming to make stock trading more accessible to the world. Founded in 2004, they have become the UK’s answer to Robinhood, helping anyone who can scrape together a few hundred pounds to start trading.

The brokerage offers access to a wide range of assets from CFDs, ISAs, Forex, regular stocks to penny stocks. For this review, I’ll be focusing on the latter.

Trading 212 originally launched in Bulgaria under the name Avus Capital but later rebranded to a cooler sounding name. They were granted a licence by the FCA to operate in the UK in 2013 and over the last five years have rapidly expanded their user base.

Commission-free trades

A key part of their growth is down to following a freemium business model – providing free basic services and hoping users will progress to using the paid services. Who can say no to commission-free trades?

Similar to most brokers, Trading 212 have a web-based trading platform along with a mobile app. The mobile app is hugely popular due to its simplicity, receiving over 15 million downloads and growing.

Surge in Growth

Millennials have been flocking to the app since lockdown, casually trading stocks to get through the boredom. As you know, the financial markets have been crazy this year. Watching amateur traders battle against Wall Street pros has been hilarious and the penny stock market is also red hot. Novice traders banking huge profits gambling on low-priced stocks now think they’re the next Warren Buffett!

Searches for ‘penny stocks’ on Google in UK/Europe have been skyrocketing in 2021. The only issue is finding a suitable broker for shares under $5 in Europe is tough. Luckily Trading 212 are here to help. They provide access to a few hundred penny stocks that mostly trade on legitimate exchanges such as the NASDAQ and NYSE. While they’re not perfect, limited access is better than none!

Below is a sample of ten penny stocks that can be bought on the platform – these companies were chosen at random and the prices will be subject to change.

Although low-priced stocks are fun to trade, it’s only fair to cover both the pros and cons of trading them with Trading 212.

Pros

• Low account minimum – only a £1 deposit is required to open an account. In general it only takes one business day to set up an account.
• Commissions-free trades on stocks and EFTs and no inactivity fees. Trading 212 makes money on the small spread between the bid and ask prices.
• Demo accounts are available as well as video tutorials. I recommend paper trading with virtual money first to get to grips with the basics.

Cons

• Limited selection of penny stocks, Interactive Brokers have a wider list of stocks to trade but do charge commissions – a surcharge of $0.005 per share.
• Customer service isn’t great, having millions of customers and not enough customer support staff is not a good match.
• Not suitable for active day traders – those placing over four trades in a day. More suited for buy and hold type investors.

Penny stocks are risky to play yet people love to trade them. Why? Purely because of the profit potential! It’s easier for a penny stock to move 50% in a single day, while big blue chip stocks such as Google barely move. While it’s great to aspire to become wealthy through low-priced stocks, the reality is different.

It’s a headache for British traders to even find a suitable penny stock broker that doesn’t charge high commissions and have a decent selection of shares under $5. Mostly you can only trade penny shares on legit exchanges such as the NASDAQ and access to OTC/pink sheet stocks will be limited.

1. Interactive Brokers

Interactive Brokers is my number one choice for UK penny stock traders. IB are not perfect, they do charge a surcharge of $0.005 per share which is not ideal. For example if you bought 10,000 shares the commission would be $50.

Despite the costs, Interactive Brokers have great trade executions and offer a good range of penny stocks to buy. Obviously the fees are more expensive than commission-free brokers such as Trading 212 but remember in the world of the finance – “there’s no such thing as a free lunch”. In the long run, poor trade executions with fee-free brokers will cost you money if you’re an active trader.

The minimum deposit to open an account is $10,000 (or non-USD equivalent) – roughly £7350. The minimum is $10,000 for the first 8 months and then $2,000 after the 9th month.

2. TradeZero

TradeZero is another popular penny stock broker in Europe. They are an offshore brokerage based in the Bahamas which allows traders to bypass the pattern day trader rule. For OTCBB, pink sheets and penny stocks below $1.00, the cost is $0.005 per share.

TradeZero is another commission-free broker, they don’t charge a fee for limit orders. As stated on their website, on free trades they make money selling their order flow to various exchanges.

If you’re interested in short selling penny stocks, TradeZero are also great at locating shares to short. The major downside is not everyone likes dealing with offshore brokers. $500 is the minimum deposit to get started.

3. DeGiro

Degiro is a low-cost Dutch brokerage firm, available to only European traders. They allow you to buy penny stocks that trade on major exchanges such as the Nasdaq, NYSE, Toronto Stock Exchange and Australian Securities Exchange etc.

Degiro doesn’t offer access to US pink sheets or OTC markets. They have a low account minimum of €0.01 for verification purposes. Overall a solid choice but you will be limited in regards to penny stock trading.

4. Trading 212

Trading 212 is the UK’s alternative to Robinhood. Similar to the other options on this list, they offer limited access to penny stocks but are slowly starting to add new companies.

Trading 212’s app and website is perfect for beginners who are trading for the first time. Minimum deposit amount is €1 and there are no charges for share dealing.

Conclusion

There you have it, these are my top picks for 2021. The reality is the demand for penny stock trading in the UK is relatively low compared to the US. Brokerages typically dislike penny shares because the people who trade them don’t have a lot of capital so they can’t make big commissions. Let’s face it, most day traders are degenerate gamblers without a strategy. I only recommend trading these types of stocks if you understand the risks and can afford to lose the money.

eToro is a social trading platform and brokerage with offices in the UK, US, Cyprus, Israel and Australia. The broker enables people to invest in a wide range of assets such as penny stocks, forex, crypto and CFDs. Their customers are mainly beginner traders with limited knowledge of the markets. Despite having 13 million customers it’s almost impossible to find an honest opinion.

So far I’ve only read fake reviews from websites looking to earn hefty affiliate commissions. The reviews are overly positive and fail to mention the downsides of using the broker. To be honest, I don’t blame them, but I don’t think it’s right to recommend a service without having used it before.

Day trading penny stocks is a tough industry. Roughly 90% of traders lose money and not having the right broker means you’re at a disadvantage. Movies like the Wolf of Wall Street glamorize trading, everyone wants to live the trader lifestyle. Thousands of people join hoping to make easy money without making the effort. Later they get angry when they find out the cold hard truth.

Is eToro a suitable broker for penny stocks?

The answer to this question depends on where you live. In the US there are dozens of brokers for penny stocks with cheap commissions and quick trade executions. In the UK, the options are far fewer.

While eToro does have some penny stocks on the platform, the selection is limited. The best option is to contact their customer service team to get the full list of eToro penny stocks, they don’t share this information publicly.

Is eToro a scam?

Despite the company’s negative reputation online, they are regulated within the markets they operate. eToro is regulated by the CySEC in the EU, FCA in the UK, FinCEN in the US and by the ASIC in Australia.

To get some honest insights on eToro, it’s worth checking out their latest reviews on Trustpilot. The reviews will provide a good overview of the main complaints clients are experiencing as well as the positives.

Pros

• The minimum deposit is just $200 to get started.
• Beginner friendly, the whole process of placing trades is very simple. Other brokers platforms cater to more advanced traders.
• Offer some access to penny stocks but the selection is limited.

Cons

• The main downside is slow customer service. Expect long delays trying to receive answers as live chat is nearly always full. This is what happens when your customers don’t understand the basics of stock trading.
• Trade executions can be slow which might impact your profits if you’re an active trader. If you’re a buy and hold type investor this isn’t a major concern.
• They charge a $5 withdrawal fee to persuade people from withdrawing money, previously it was $25 which is insane!

eToro Alternatives for Trading Penny Stocks

• Interactive Brokers
• TrazeZero
• Trading 212
• Etrade

Summary

Overall eToro wouldn’t be classified as an ideal broker for penny stocks. Despite this there are some low-priced shares on eToro you can trade but it will be limited. eToro is mainly popular because it’s built for beginners and professional traders will favour brokers with advanced trading platforms. Please leave a comment below about your experience using eToro!

Founded in 1982, E-trade has become one of the most popular brokers for penny stocks and large caps. They have developed a strong reputation as a reliable brokerage, serving 5 million clients worldwide. What sets them apart from competition are their trading platforms, competitive fee’s, educational tools and charting software.

Setting up an Account 

Simply sign up for an account by completing an application form. The application process is relatively straightforward, it shouldn’t take longer than 10 minutes to fill out the necessary details. A huge positive for E-trade is their low account minimum, you can open an account with $0 but need to fund it after 30 days to keep it. $500 is required for a cash account and $2,000 for a margin account.

Penny Stock Commissions (3.8/5)

• Although E-trade is not the cheapest broker, they still offer cheap commissions.
• $6.95 fee per trade is slightly above industry standard but the fee falls to $4.95 if you execute more than 30 trades in a quarter. Numerous online brokerages charge lower commissions but add on extra surcharges which can dramatically increase your commissions. For example, Interactive Brokers have a surcharge of $0.005 per share, 10,000 x 0.005 is an extra $50 fee.
• The flat-fee commission and no surcharges on penny stocks makes them an ideal option for trading low-priced shares. The flat fee means no matter how many shares you purchase, you pay the same price regardless.

Trading Platform (4/5)

• E-trade have two advanced trading platforms – E*TRADE and Power E*TRADE (formerly OptionsHouse).
• Power E*TRADE is an innovative platform ideal for penny stock traders as their tools are relatively easy to use.  They have advanced intraday and historical charting, drawing tools, and market news. The charting tools automatically populate charts with technical analysis.
• E*TRADE was their original platform before they acquired Options House, perfect for beginners who need to research investments, track markets, place trades, and develop their skills.
• Their mobile app also allows you to follow the markets wherever you go!

Customer Service (4/5)

• E-trade has won awards from Smart Money due to their customer service. Some of their customer support is outsourced to foreign countries to reduce expenses which is normal for large corporations.
• Customer service is friendly compared to other brokerages, helpful for beginners.
• 24/7 support available, gives them an edge over competitors.

Pros

• No extra fees for penny stocks and beginner friendly.
• Have excellent borrows for shorting penny stocks.
• Minimum account deposit is $0.
• No inactivity or unnecessary acquaintance fees.

Cons

• No longer accept traders from the UK and Europe. Check their list of accepted countries as from time to time, they change it.
• Quotes are delayed by 15 minutes unless you meet the 30 trades per month requirement.
• Not able to fund your account with a debit or credit card and only support one currency – USD.

If you’re interested in trading penny stocks, E-trade is a great choice! Various experienced day traders such as Timothy Sykes highly recommend them as a broker!

CenterPoint Securities is an online stock broker that caters to sophisticated day traders. They provide clients with direct market access and various routing options for 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 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 $0.0045 to $0.0065 per share.

Traders who sign up for the per-ticket plan pay between $2.95 to $5.95 per trade. Clients who trade more than four shares million will pay reduced fees per share.

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. Most brokers now have no account minimum. In recent times Interactive Brokers had a minimum of $10,000 but removed it to attract more customers.

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 they meet the requirements.

Trading Platforms

Trading Software Fees

Centerpoint has three software tools, each charge a monthly fee – ranging from $120 to $250 per month. The hefty monthly fees can be avoided if you meet the minimum trading volume, this ranges from 300,000 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 to 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 an excellent broker.
• Another big advantage is quick trade executions, speed is crucial 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 best broker for short selling stocks. CenterPoint works with four clearing firms – ETC Clearing, Hilltop Securities, Wedbush Securities, and Vision Financial Markets. In fact, they have access to 30+ venues for direct routing.

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 are 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.

My Final Thoughts

Excellent broker mainly used by professional traders with large account sizes. If you don’t have enough money explore alternative brokers such as Charles Schwab, Interactive Brokers and Fidelity.

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