Nowadays brokers for penny stocks are becoming less expensive, making it more affordable for retail traders to invest their savings. Finding a suitable brokerage firm will depend mainly on: what kind of stocks you trade (whether that be OTC or pink sheet stocks), how much capital you have and how often you trade. Each broker will have different  account minimums, trading commissions +  fees and trading restrictions especially when it comes to issues like buying and short selling penny stocks. Other things to consider include: quality of customer service, trading platforms /software, executions and market maker routes.

Its harder to find a broker that is penny stock friendly due to the bad rap penny stocks have gotten over the years and with good reason. 90% of penny stocks represent terrible investments and are just not something you would put in your 401k.  Many of them are just shell companies put together for the sole purpose of a ‘pump and dump.

1. TD Ameritrade 

• Took over Thinkorswim, which was my previous favorite  broker for penny stocks .
• TD Ameritrade offer decent customer service. Some of my emails have been replied to within 30 minutes.
• They offer a free paper trading account helpful for beginners who wants to test strategies and get a feel for the market.
• No monthly fees / No maintenance and inactivity fees.  
• They have an amazing trading platform and excellent charting tools, with tutorial videos to help get you started.
• $2,000 is the account minimum.
• Great executions and has decent borrows if your interested in shorting penny stocks.
• No surcharges on penny stocks and large orders.(Most brokers add a surcharge of 1 penny per share bought, 10,000 shares would cost $100) TD Ameritrade commissions are a bit higher when compared to other online brokerages.

1. Etrade

• They have very good trading tools but not as good as TD Ameritrade .
• Trade free for the first 60-days.
• $1,000 minimum for a cash account and $2,000 for a margin account. 
• Great investment tools and research and the executions are lighting fast.
• Etrade is particularly good if you are trading overseas.
• Better than average customer service. 
• No surcharges on  penny stocks and large orders. 
• Etrade is ideal for non-active investors who prefer to buy and hold and only trade a couple of times throughout the year.

1. SureTrader

• Was one of Timothy Sykes favorite brokers.
• Best thing about Suretrader is that there is no pattern day trader rule. This is an SEC rule which does not allow people to accounts under $25,000 from executing more than 3 day trades in any 5-day period.
• Located offshore in the Bahamas.
• $2,000 account minimum. 
• Great borrows for hard to short penny stocks, although you have to pay a premium to reserve hard to borrow shares.
• It costs $4.95/trade for up to 1,000 shares, this makes them one of the cheapest brokerage firms. They soon plan to offer 20-1 leverage. ( I highly recommend  not to use leverage)

1. Interactive Brokers –

• Have one of the best borrows for stocks, but shares to short go fast.
• Below average customer service
• $10,000 account minimum.
• Their trading platform is hard to learn and not recommended for novice investors.
• Charge fees to modify or cancel an order. Charge monthly fees of around $30.
• Their commissions are too expensive for active day traders trading large volumes of shares.