How does etrade commisons work?

Question

I was thinking about investing in penny stocks but im not syure how the etrade commision works. If it cost $7 for each stock and the stocks I trade for are less than $7 then im paying more to trade than for the trade. Is this how etrade works? Any ideas on where I should go to invet in penny stocks?

Answer 1

Most firms charge commission based on each trade, (a trade is considered an execution)

If their fee is $7, you will pay $7, there is no special breaks for the value of the stock.  So the cheaper the stock, the greater your commission rate (not the amout) will be.

Most firms will charge more for penny stocks since they do not encoureage customers from investing/trading in them

Not only do they not encourage penny stocks, they do what they can to discoureage them.  Penny stocks are very expensive for brokerage firms to trade, process and to segregate, so in most firms they are not very cost effective and in are usually a loosing proposition.

Here are some penny stock websites that may have ads for brokerage firms that will trade pennies

http://www.smallcapinvestor.com/

http://www.stockwire.com/

http://alphaking.com/

http://www.otcstockexchange.com/

http://www.mcapstocks.com/Default.asp

http://www.pinksheets.com/pink/quote/ind...

http://ragingbull.quote.com/cgi-bin/stat...