Does thinkorswim Offer OTC and Penny Stocks?
If you use thinkorswim as your trading platform and would like to trade penny stocks, you’re in luck. TD Ameritrade, the broker behind the popular trading platform, offers many OTC securities to its customers. If you want to trade foreign stocks, Pink Sheet penny stocks, Expert Market, or Grey Market securities, keep reading to learn if TD Ameritrade’s award-winning trading platform, thinkorswim, makes it possible.
Penny stock availability at TD Ameritrade/thinkorswim
There are a large number of penny stocks available at thinkorswim. The broker has long been a top destination for investors interested in penny stocks and OTC securities. Traders like thinkorswim for the built-in screening capabilities of the platform, as well as the advanced charting, market news, and hotkeys for order management.
At thinkorswim, it can be helpful to look at penny stocks in two separate categories. This is because the rules and commissions differ depending on the type of stock you are trading.
On one side, you have stocks trading under $5 that are listed on U.S. exchanges, like NYSE and Nasdaq. On the other side, you have stocks listed on the OTC BB and on the Pink Sheets Exchange.
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Scanning for penny stocks on thinkorswim
To find penny stocks on thinkorswim, the easiest way is to use the Stock Hacker tool, found under the scan tab.
One of the more popular ways to scan for penny stocks is to search for OTC Only securities. However, you can also find exchange-listed penny stocks by using price as a criterion.
In fact, the list of modifiers that you can add to your penny stock scans is nearly endless but it better to start simple and add new intricacies as you need them.
Here are some basic settings that you can start with:
If you want to search for OTC stocks only, you can select that option from the ‘Scan In’ menu.
Some traders use Last Price (under $5), Shares (over 10m), and Volume (over 100,000) as a starting scan. These settings will provide a list of OTC stocks that are more heavily traded at the time that you run the scan. At the same time, the companies will have enough share availability to add some security.
The same process can be used to find penny stocks that are listed on exchanges. Simply ‘turn off’ the OTC Only setting to search everywhere (All Listed Stocks).
Thinkorswim penny stock and OTC Fees
| Thinkorswim penny stock commission | $0 |
| Thinkorswim penny stock surcharge | $0 |
| Thinkorswim large order surcharge | $0 |
| Thinkorswim ECN surcharge | $0 |
| TD Ameritrade OTC stocks commission | $6.95 |
One thing that you will quickly notice with thinkorswim is the fact that there are high fees that come with OTC securities.
While listed stocks under $5 are still commission-free on the platform, securities that are classified as OTC or Pink Sheets come with a fee.
The commission for OTC stocks (per trade) is $6.95.
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Firstrade as a no-fee alternative
While we do like thinkorswim for OTC BB trading, there is no denying that the high commissions can make things difficult in certain situations. For traders not accustomed to placing very large orders, the commissions may prove to be a little high. High frequency traders might also find the fees a bit high as commissions are charged on a per-trade basis.
If you are looking for a broker offering OTC securities that does not charge any fees, Firstrade is a very good alternative to thinkorswim. Firstrade offers a complete range of Pink Sheet and OTC BB securities, and traders can buy and sell them at no extra charge.
OTC stock screener at Firstrade
To find OTC stocks on Firstrade, you can find the Screeners option under Research & Tools.
With Stocks Screener page open, you can select ‘Exchange’, then ‘OTC BB’ and ‘OTC Pink’. You can then add modifiers like ‘Share Price’ and ‘Short Interest’ to narrow the search results. It is a good idea to set the minimum price to $0.10 as Firstrade no longer allows trading on securities under the 10 cent mark.
Trading Penny Stocks at Firstrade
Once you have a list of tickers that meet your specified criteria, simply click on the ticker and select Buy. Doing so will populate the order ticket where you can specify a limit price and any other instructions that you would like to include.
When you are happy with your order, you may either preview the order or send it directly.
OTC trading restrictions
Until fairly recently, you could trade Grey Market, Expert Market, and Pink No Information OTC Stocks on both thinkorswim and Firstrade. At the end of 2021, however, SEC made a ruling that US-based investors could no longer purchase these types of securities. Reasons given were extreme volatility, fraudulent activity, and unreliable price quote data.
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