So you've decided to get into the penny stock market. You've examined the basics of the market, determined what they are and how they're traded, and learned of the risks. You've even done market research to figure out what stocks are good investments. Now what? You need to find a way to make trades.

Traditionally penny stocks were traded by brokerages using over the counter rules as opposed to traded in exchanges like the NYSE or NASDAQ. While brokers still offer penny stock transactions (and make their money off of commissions from those transactions) the Internet has provided a whole wealth of new options that make trading microcap stocks more lucrative and secure. Foremost among these are the rise of a number of on-line vendor options. Below are several services and vendors designed to facilitate rapid response investment in penny stocks.

One of the top rated on-line brokers dealing in penny stocks is Low Trades, found at www.lowtrades.com. With a recently revamped website featuring a number of new research options and features, Low Trades has been highly rated by both users and professionals focused on microcap stock trading. Chief among these upgrades has been real time streaming quotes for stock prices and a greatly expanded set of general knowledge overviews for new investors. Low Trades requires no minimum balance to set up a cash account and charges flat rates of $5 for on-line transactions. Penny stocks are treated exactly the same as regular stock transactions and Low Trades allows for the purchase of stocks on Canadian exchanges. While on-line transactions are $5 dollars, all trades made through a broker (i.e. over the telephone) cost $25 dollars each and any purchases done on Canadian exchanges require a phone call to be executed. Low Trades consistently scores well on its customer service, satisfaction and reliability, making it one of the most recommended on-line brokers.

Another excellent option for microcap trading on-line is Trading Direct, found at www.tradingdirect.com. Like Low Trades, TD has no minimum balance on cash accounts and its $60 dollar a year fee is waived if at least one trade is made during that year. If you're trading penny stocks you should be making far more than one trade a year, so this is a moot cost in most cases. Their transaction fees are slightly more expensive than Low Trades, with on-line transactions costing $9.95 and phone trades costing $29.95, and penny stocks are well represented. TD even offers options to trade OTC-BB and Pink Sheet stocks.

Scottrade is a smaller, more agile on-line broker with low overheads and extensive options for dedicated traders. These trading options include real time news feeds from the New York exchange as well as unlimited quotes and charts, also updated in real time. Unlike either of the earlier two brokers, Scottrade requires a minimum opening balance of $500 dollars, but they charge neither a yearly upkeep fee nor a maintenance fee. However, Scottrade has specialized rules for handling microcap trades which apply to all trades on stocks with a value below a dollar. These stocks require a $12 dollar charge, plus 0.5% of the principal amount for most stocks, which is $5 dollars more than the cost of a stock with a value above a dollar. On-line purchasing for Pink Sheet or Canadian trades is not allowed, requiring a phone call to a broker and a $22 dollar fee, again plus 0.5% of the principal, and again $5 dollars more than the cost for a regular transaction.

The largest on-line broker is Ameritrade, which boasts the largest volume of transactions of any of the various sites. It also has some of the most extensive aids for trading, with a dedicated feed of quotes, analysis, news and tools to improve investment performance. Ameritrade requires a $500 to open a cash account and if the initial investment with the company is $1000 or more the first 25 on-line transactions conducted during the first 5 weeks the account is open are free. Otherwise each on-line transaction costs $10.99 and phone trades cost $14.99 for the automated service or $24.99 if you speak to a broker. Penny stocks are treated the same as regular stocks for commission purposes. Ameritrade offers no options for purchasing Canadian stocks unless they are dual listed on an American exchange.