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Penny stock brokers offer stock traders an opportunity to explore the share market without spending a lot of money. These stocks are traded below £1 for UK companies and £5 for US shares. As InvestingGuide experts, we understand how traders struggle to start exploring this affordable venture. Therefore, we provide proper guidance to ensure you are ready for such investments. For instance, we encourage trading penny stocks using FCA-regulated brokers. Discipline and a good plan will also increase your chances of succeeding in penny stock trading ventures.
Penny stock trading is becoming more popular in the UK. However, not all stock brokers offer these company shares, making it challenging for traders to make the best choice for their needs. You must be willing to spare a few hours to conduct extensive research and analyse as many brokers’ offerings as possible for suitable choices.
Since many traders are not patient enough to complete the procedures involved in this research, they end up with unsuitable brokers, resulting in bad experiences. InvestingGuide experts come in to solve this challenge. Our comprehensive guide below lists the top penny stock brokers we have thoroughly analysed. For beginners, expect to also learn more about penny stocks and how to get started in this volatile market.
List of the Best Penny Stock Brokers
- Saxo – Overall Best Penny Stock Broker in the UK
- AvaTrade – Beginner-Friendly Penny Stock Broker in the UK
- XTB – Top CFD Penny Stock Broker in the UK
- Interactive Brokers – Best Penny Stock Broker For UK Professional Traders
- Spreadex – Cheapest Penny Stock Broker in the UK
In This Guide
UK Penny Stocks Brokers: Comparison Table
InvestingGuide comprises a team of professionals with decades of experience. Before making recommendations, we test and approve them first. Penny stock brokers are no exception. Our research starts with collecting hundreds of FCA-regulated brokers in the UK. We test their performances and compare their features before shortlisting those that meet our specifications.
We also visit Google Play, the App Store, and Trustpilot to analyse user testimonials and ratings. We believe doing so and combining the findings with our test results help us remain unbiased in this process.
To ensure you make the best choice for your needs, we have compared a comparison table below. This table shows the features that made these penny stock brokers UK stand out.
| Best Penny Stock Broker | Licence & Regulation | Support Service | Software | Payment Method | Demo Account | Money Insurance |
|---|---|---|---|---|---|---|
| Saxo | FSA, FCA, MAS, SEBI | 24/5 | SaxoTraderGO, SaxoTraderPRO | Bank Wire Transfer, Debit cards | Yes | Yes (up to £85,000) |
| AvaTrade | FCA, FSCA, CBI, CySEC, PFSA, ASIC, B.V.I FSC, FSA, ADGM, ISA | 24/5 | WebTrader, AvaOptions, AvaTrade App, Mac Trading, MT4, MT5, Automated Trading | Credit/debit cards, Neteller, Skrill, Wire transfer, WebMoney | Yes | Yes (up to $1,000,000) |
| XTB | FCA, KNF, CNMV | 24/5 | xStation 5, xStation Mobile | Credit/debit cards, Bank Transfers, Skrill | Yes | Yes (up to £85,000) |
| IBKR | FCA, FSA, CFTC | 24/5 | IBKR Mobile, APIs, Trader Workstation | Bank or wire transfers | Yes | Yes (up to £85,000) |
| Spreadex | FCA, SEBI | 24/5 | iPhone App, IPAD App, ANDROID App, TradingView | Bank Wire Transfers, Credit cards | No | Yes (up to £85,000) |
Brokers Short Overview
It is advisable to consider your trading needs when selecting a penny stock broker in the UK. Among those needs are the asset offerings and fees applicable for proper planning. Since many traders in the UK do not know what costs to analyse and compare, they end up with wrong choices. Do not fret, though, as we did all the leg work on this one. Based on our findings, we share tables below of the fee structures and asset offerings of the best penny stocks brokers.
Fees
| Best Penny Stock Broker | Fees | Minimum Deposit Requirement | Transaction | Inactivity |
|---|---|---|---|---|
| Saxo | From £0.01 commission | £0 | Free | None |
| AvaTrade | 0.03 pips | £100 | Free | £50 quarterly |
| XTB | From 0.1 pips | £0 | Free | £10 monthly |
| IBKR | From $0.01 commission on US stocks | £0 | Free | None |
| Spreadex | From 0.6 pips | £0 | Free | None |
Assets
| Best Penny Stock Broker | Forex | Stocks | Commodities | ETFs | Options |
|---|---|---|---|---|---|
| Saxo | Yes | Yes | Yes | Yes | Yes |
| AvaTrade | Yes | Yes | Yes | Yes | Yes |
| XTB | Yes | Yes | Yes | Yes | Yes |
| IBKR | Yes | Yes | Yes | Yes | Yes |
| Spreadex | Yes | Yes | Yes | Yes | Yes |
Our Expert’s Opinion about the Best Penny Stock Brokers
Having thoroughly tested and compared hundreds of stock brokers in the UK, we identified the best ones offering penny stocks. Below are our mini-reviews of these brokers based on our hands-on experience. We hope you will understand their offerings and make a choice that aligns with your trading requirements.
1. Saxo – Overall Best Penny Stock Broker in the UK
We tested as many penny stock brokers as possible in the UK, and Saxo Stood out in various ways. We discovered that the broker offers an extensive array of options on a remarkably user-friendly platform. We like that the broker is dedicated to providing top-notch third-party research resources and access to expert portfolio management services. Moreover, Saxo offers access to a vast selection of penny stocks, available for purchase, with a minimal commission of just £0.01 per share. This low trading cost empowers professional traders to diversify their portfolios effectively, mitigating the risks associated with trading in a single asset.
Beyond penny stocks, Saxo offers access to over 20,000 additional global stocks, including popular options like Google, Netflix, Apple, and more. We enjoyed trading on the broker’s desktop platform and SaxoTraderGO app, which is compatible with Android and iOS devices. This UK penny stock broker has no minimum deposit requirement, and all transactions are free of charge. We find it affordable and suitable for all types of UK traders.
Saxo
✔No minimum deposit requirement
✔Low commissions for all asset classes
Pros & Cons
Fees
Trading Assets
Pros
- Plenty of research and learning resources
- Numerous penny stocks to explore
- A user-friendly and customisable trading platform
- Low penny stock trading commission
Cons
- Does not support the MetaTrader platforms
- Saxo VIP account has a high minimum deposit requirement of £1,000,000
Saxo is one of the brokers in the UK with transparent fee structures. While analysing its trading and no-trading charges, we noted that the broker has no hidden charges. This makes it easier for users to plan and budget for their activities without worrying about extra charges once fully invested.
Additionally, we find Saxo affordable since it charges low commissions, starting at $1 on US stocks, ETFs, and futures. For traders interested in options and government bonds, Saxo charges low fees, starting at $0.75 and $0.05%, respectively.
When it comes to Saxo’s minimum deposit requirement, the broker has none. This means that any trader, whether new or budget-conscious, can create a trading account with the broker and start exploring the financial space. However, expect to incur a currency conversion fee, especially when you trade using a different currency from your account’s base denomination. The good news is this fee doesn’t apply to marginal collateral and can never exceed +/- 0.25%.
Financing charges for positions left overnight are also applicable at Saxo. For investors, expect to incur annual custody fees if your account holds stock, bond, or ETF/ETC positions. The exact fee will vary depending on your account. Our analysis showed that you will pay up to 0.15% for the classic account, 0.12% for the platinum account, and 0.09% for VIP accounts.
Lastly, Saxo charges fees for additional services besides those mentioned above. For instance, it imposes a $50 fee for online report requests. Plus, transactions are free, and there is no inactivity fee should your account stay idle for some time.
2. AvaTrade – Beginner-Friendly Penny Stock Broker in the UK
We also found AvaTrade a suitable penny stock broker, especially for newbies. From our experience, its platform is user-friendly with customisable options. Plus, it lists quality learning materials, including guides, articles, recorded videos, and more. These, together with its virtually funded demo account, make it easier for newbies to advance their skill level and test this broker’s offerings before investing real money.
Getting started with AvaTrade involves straightforward procedures. With only £100 as a minimum deposit, you will have access to over 1000 share CFDs, some of which are penny stocks. The best part is that AvaTrade charges low commissions for penny stock trading. Furthermore, it lists additional securities for portfolio diversification, including forex, indices, commodities, ETFs, and more.
AvaTrade
✔Free deposits and withdrawals
✔Beginner-friendly user interface
Pros & Cons
Fees
Trading Assets
Pros
- Low minimum deposit requirement
- User-friendly and intuitive design for desktop and mobile devices
- Social trading feature for a better experience
- Multiple trading platforms to choose from, including MT4, MT5, AvaOptions, and AvaSocial
Cons
- Lists only CFD assets
- Inactivity fee is high and kicks in only after three months
Before going any further, note that there’s an AvaTrade minimum deposit requirement for UK traders. Fundamentally, this service provider requires Britons to fund their account with at least £100 while using supported payment methods like wire transfer, credit card, and e-payment. You should keep that in mind while funding your trading account.
That aside, while evaluating AvaTrade, we discovered that this broker has numerous fees and costs. For starters, it requires dormant account holders to pay a £50 inactivity fee. It kicks in after 3 successive months of dormancy, and the broker charges it after every 3 months.
Additionally, dormant AvaTrade accounts incur a £100 annual administration fee that takes effect after 12 months of inactivity. Not to forget, while trading with AvaTrade, you’ll have to cover an overnight premium whenever you keep a position open after the stipulated overnight funding time, which is 22:00 GMT.
Regarding spreads and commissions, AvaTrade is one of the most affordable brokers in the UK. With this platform, you will enjoy reasonable spreads starting from 0.13% while trading popular instruments like Tesla and Amazon shares are involved. AvaTrade doesn’t require traders to cover any commissions. The broker uses the Bid-Ask spread to compensate itself.
3. XTB – Top CFD Penny Stock Broker in the UK
When it comes to top brokers with CFD assets, XTB excels. We find it to be among the most reliable CFD penny stock brokers because of the wide range of penny stocks it hosts. Plus, users will enjoy additional shares listed on over 16 global exchanges. Note that XTB has a user-friendly interface that is fully customisable for desktop and mobile devices. The flexibility of the xStation 5 web platform and the xStation Mobile app for Android and iOS users enriches the trading experience. Besides penny stocks, XTB provides an extensive range of securities like forex, commodities, and cryptocurrencies for portfolio diversification.
XTB has also proven affordable as it has no minimum deposit requirement. All transactions are free, and you can explore the share markets with commissions from 0%. This makes it appealing for budget-conscious and beginners who are sceptical of kickstarting their ventures with a lot of money. On top of that, XTB offers competitive interest rates on uninvested funds, up to 5%, including 3.8% for EUR and 5.0% for USD, further incentivising traders.
XTB
✔5,700+ financial instruments
✔No minimum deposit requirement
Pros & Cons
Fees
Trading Assets
Pros
- No minimum deposit requirement
- Adequate penny stocks to explore and diversify your portfolio with
- Quality research and learning tools
- Commission-free penny stock trading
Cons
- Doesn’t feature third-party trading platforms
- Only CFD assets are available
XTB is a cost-effective trading platform. We used a live account to assess its fees and commissions. The first applaudable aspect we noticed is setting up an account with this broker is quick and easy. Furthermore, there’s no set XTB minimum deposit requirement, and the platform supports free transactions. When it comes to withdrawals, transactions above £50 are free.
That aside, we noticed various mandates on the XTB UK trading platform during our exploration. For starters, this entity has a £10 minimum order requirement for shares from companies like the Associated British Food PLC. Additionally, it requires users to cover a 0.5% conversion fee while trading with anything besides the base currency.
Not to forget, XTB charges different spreads for different instruments and requires traders who hold open positions to cover swap costs.
4. Interactive Brokers – Best Penny Stock Broker For UK Professional Traders
If you are a professional trader looking to venture into the stock market, Interactive Brokers (IBKR) is worth trading with. From our analysis, the broker lists penny stocks you get to trade at low commission, from 0% on US-listed stocks. Plus, you will explore an additional 10,000+ assets, including more shares listed on 90+ global markets, forex, commodities, indices, ETFs, and more.
We also discovered plenty of learning and research materials at IBKR. Although this broker doesn’t host third-party platforms like MT4/5, you will be satisfied with the offerings on its IBKR Desktop, IBKR Trader Workstation, and IBKR Mobile. There is also the IBKR GlobalTrader mobile app, which we found to be user-friendly and highly recommended for newbies. With no minimum deposit requirement, transaction charges, or inactivity fees, IBKR accommodates all types of penny stock traders.
Interactive Brokers
✔No minimum deposit requirement
✔Zero inactivity fees for individual trading accounts
Pros & Cons
Fees
Trading Assets
Pros
- No account minimum requirement
- Less than £1 per share on penny stock trading
- Excellent research resources
- Hosts a virtually funded Free Trial account for testing its performance and gauging your skill level
Cons
- A challenging desktop platform to navigate
- No third-party platforms like the MT4/5
Numerous factors, including the £0 Interactive Brokers minimum deposit UK requirement, made our exploration easier and more enjoyable. This trading platform allows users to trade and invest with whatever they can afford, making it ideal even for traders and investors working with a restricted budget.
We were also wowed by the friendly Interactive Brokers fees UK policies. For starters, this company offers free deposits to people who use supported payment methods, including bank transfers. Only people who use physical currency deposits are subjected to a 1% special handling fee. Moreover, this service provider has zero inactivity fees and commissions as low as £0.0005 for stocks and ETFs.
5. Spreadex – Cheapest Penny Stock Broker in the UK
While there are numerous cheapest penny stock brokers in the UK, we found Spreadex to be the best in this category. For starters, there is no minimum deposit requirement, and all transactions are free. This makes it easier for newbies and low-budget traders to start their ventures with any amount they can afford. We traded various penny stocks from its listed thousands of options at low trading fees.
Note that Spreadex has a user-friendly platform designed to cater to traders of all levels. During our research, we had the opportunity to test its support service, and we were impressed by the team’s responsiveness and the relevance of the solutions they provided. While the support team may not operate round the clock, it is accessible through various channels, including email, phone, and live chat. We like that Spreadex hosts quality learning and market research materials listed on its proprietary and TradingView platform. Sadly, there is no demo account.
Spreadex
✔10,000+ financial instruments
✔Zero account inactivity fees
Pros & Cons
Fees
Trading Assets
Pros
- No minimum deposit requirement
- A comprehensive selection of penny stocks for diverse investment opportunities
- Competitive pricing, thus enhancing affordability for traders
- Exceptional support services, providing guidance and insights for penny stock trading
Cons
- No demo account
- Limited market analysis resources compared to its peers
We analyzed Spreadex’s fees and commissions since these elements can impact a trader’s profitability. The first impressive aspect that caught our attention is this broker’s £0 minimum deposit requirement. You can deposit any amount into your Spreadex account and start trading almost instantly. Furthermore, the broker charges zero account maintenance and inactivity fees.
What’s more, Spreadex has tight spreads and commissions. While trading with this broker, you can enjoy low spreads starting from 0.9 pips for GBP/USD, 0.001 pips for USD/INR, and 0.6 pips for EUR/USD. However, note that this broker charges overnight financing fees for positions held overnight.
Trading on Penny Stocks in the UK
As mentioned earlier, penny stocks are company shares trading at low costs. Also known as micro-cap stocks, they trade at amounts ranging between $0.02 and $5 per share. They are affordable, thus attracting low-budget traders looking to venture into the stock market. From our experience analysis, penny stocks UK are suitable for long-term investments, considering their potentially small returns. Only the most patient investors will reap the profits.
While some penny stocks are listed on stock exchanges, others can be traded over the counter (OTC). For a stock to be listed in a world-renowned exchange market, it must be traded at above $1 per share. Therefore, if you find a penny stock trading below $1, they are probably from new or bankrupt companies.
When it comes to OTC penny stocks, they have higher risks than those trading on stock exchanges. This is because they lack liquidity and have large market capitalisation and bid-ask spreads. This doesn’t mean that some stocks are more volatile than others. The market is still unpredictable since asset prices constantly change due to various factors. So, always conduct thorough research and analysis before venturing into penny stocks.
Note that penny stock trading in the UK is legal, and you can engage in the activity using a brokerage firm. You must be at least 18 years old since most penny stock brokers in the region will require that you verify your identity. The activity is overseen in the region by the Financial Conduct Authority (FCA). This authority has laid stringent rules to protect traders from fraudsters dominating the market. With such brokers, your funds are highly secured in segregated accounts, and personal data is secured in highly encrypted platforms.
Find out more about the Innovations in Trading in our other guide.
What is a Penny Stock Broker?
A penny stock broker is a provider offering a penny stock trading platform to retail traders and investors. With such a broker, you can efficiently buy, sell, or trade global penny stocks over the counter. Simply put, penny stock brokers allow you to explore shares under £5 listed on stock exchanges like the London Stock Exchange (LSE), New York Stock Exchange (NYSE), NASDAQ, and more.
Note that penny stock brokers specialise in low-priced stocks. Most of these stocks are offered by upcoming companies and are highly volatile compared to larger counterparts. Penny stock brokers execute buy and sell orders for clients. In return, traders pay a commission or fee for their services. These brokers may also offer online trading platforms where clients can manage their own trades.
How to Choose the Best Penny Stock Broker UK
Penny stocks UK trading requires extensive knowledge regarding the share market. You must also be willing to spare time to conduct extensive market research and select the best broker that will maximise your potential.
We understand how exhausting and challenging the process of finding the best penny stocks UK broker can be. Therefore, we share some of the factors to consider to ensure you identify a broker that is perfect for your trading requirements.
Licences/Regulations
Platform
Charges
Available Assets
Customer Service
Demo Account
User Testimonials
All our recommended penny stock brokers in the UK above are licensed and highly regulated by world-recognised authorities, including the Financial Conduct Authority (FCA). However, if you decide to research other penny stock brokers, ensure that the FCA monitors their services.
Trading penny stocks with a licensed and regulated broker guarantees your trading funds’ safety. You also get to trade under the best conditions. Plus, it’s easy to take legal action against an FCA-regulated broker should there be a breach of agreement.
Penny stock trading requires a platform that executes trades fast to allow you to make quick moves on the volatile markets. For this reason, choose a penny stock broker with this feature. The platform should also provide access to the necessary trading tools, such as research and learning materials. Most importantly, ensure it is user-friendly, customisable, and compatible with desktop and mobile devices for seamless navigation.
Although penny stocks are company shares traded for less than £5 per share, you must have a budget. Note that UK penny stocks brokers have different trading and non-trading charges, so make sure you confirm this before making a choice.
For example, check the minimum deposit, transaction costs, inactivity fees, and more. Some brokers also have hidden charges. Therefore, ensure you understand what to expect with a penny stock broker to plan accordingly.
The best penny stock broker in the UK should host a plethora of penny stocks to explore and diversify your portfolio with. A broker with additional asset classes will enable you to test different securities before choosing the ones that work best for their strategies.
Any broker for penny stock trading should have responsive and dedicated customer service. Such support services help you find relevant solutions quickly whenever you encounter issues while trading penny stocks. Although some of the penny stock brokers in the UK, including our recommended ones, have 24/5 support services, others are available 24/7. Therefore, choose a broker based on your trading schedule.
Whether you are new to penny stock trading or an expert trying to find the best broker, you should not rush into creating a live account before testing its performance. Instead, start by creating a demo account, which is usually free and does not carry trading risks. With a demo account, it’s easy to confirm the above elements and decide whether a broker is worth trading with.
Although the tips above will help you find the best penny stock broker for your needs, include analysing user testimonials in this process. This way, you will understand brokers’ strengths and weaknesses and choose what you are comfortable with. So, visit Google Play, the App Store, and Trustpilot to analyse as many user ratings and comments as possible.
How to Sign up for an Account with a Penny Stock Broker
Now that you know the top penny stock brokers in the UK, you probably wonder how to get started. Fret not for. Below, we will give you proper guidance on setting up an account and trading penny stocks.
Step 1: Visit your broker’s official website
Step 2: Create a penny stock trading account
Step 3: Participate in account verification
Step 4: Make a deposit
Step 5: Trade penny stock
If you have chosen a penny stock broker from our list of recommendations above, click any of the links on this page to quickly access it. Before you proceed further, understand the broker’s terms of service. Plus, install its trading app on your mobile device. This way, you can easily manage your positions whenever you step away from your trading station.
Proceed to sign up for a trading account using your personal details. These include your name, email, phone number, source of income, and more. Plus, create a unique username and a strong password to secure your account further from unauthorised access. Note that the details you provide at this stage should be accurate since you will be required to verify them later.
Your penny stock broker will require you to verify your personal details before fully activating your account. You will be asked to share a copy of a government-issued ID card for identity verification. Some brokers will also want proof of location, which requires a copy of a recent utility bill or bank statement.
Note that you will participate in this procedure on all FCA-regulated brokers, like the ones referenced above. It is a standard protocol that must be adhered to to keep online trading platforms safe from imposters.
It may take up to two days for your penny stocks account to be fully activated. Once you receive an email notification, make a deposit. Consider your broker’s minimum deposit requirement and transaction charges to ensure you trade under budget. Most importantly, transact with the most convenient options, whether credit/debit cards, e-wallets, or bank transfers.
Your broker will confirm your deposit and automatically lead you to its listed penny stocks. After conducting thorough market research, choose an option that best suits your knowledge and strategy. You should then decide how to trade the penny stock, whether as CFDs or indices. You can also opt to buy the asset and take full ownership. Simply choose a trade size and apply risk management controls to mitigate massive losses in case the trade goes against you.
Conclusion
Penny stock trading allows traders to venture into the stock market without spending a lot of money. You can explore the UK shares market for as little as £1. Simply conduct thorough market research to select an option you are fully familiar with. As mentioned earlier, the stock market is volatile, and while you may earn profits from penny stock trading, losses are inevitable. Therefore, consider keeping a trading diary that entails all your trading strategies. This will help you easily identify your mistakes and avoid repeating them. Plus, start exploring the share market with a broker’s demo account and spread your risks across multiple shares.
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