Webull Broker Review
A financial company having a strong focus on providing a great customer experience, Webull strives to respect the investor and to provide the best infrastructure for trading. With a strong focus on technology, it empowers investors to make the most of the market’s volatility by providing advanced and intelligent tools and services.
A regulated brokerage house with the SEC, Webull focuses on retail traders. It offers both brokerage accounts and IRAs, and it attracts clients via a simple process of opening a trading account and the possibility to use microdeposits.
On Webull Secure Website
No Minimum Deposit
How Webull Works?
Webull belongs to the new generation of brokerage houses ready to fight with the traditional houses for retail clients. It defies the unwritten laws that governed Wall Street investing for decades and slashed commissioning to zero.
Of course that the broker must have some other revenue stream, and it does. But its main tactic is volume. More precisely, by attracting as many small retail traders as possible and charging them smaller fees, the volume increases, and so it can compete successfully with big brokerage houses.
The coronavirus pandemic offers the perfect example for understanding brokers like Webull. When the government offered $600 weekly checks, people viewed the money as free-money and put it at work. A huge number of retail trading accounts were opened, but guess which brokers benefited from the new generation of traders? The traditional investment houses, with large minimum deposits, or brokers like Webull that accepts any deposit whatsoever? The retail phenomenon grew so large that it was often cited in financial media as the root cause that keeps the stock market advancing in times of a pandemic.
Many traditional investment houses that run large institutional businesses were taken by surprise by brokers like Webull, Acorns, or Robinhood. As competition intensified, they lowered their commissioning too, but not enough to compete with a company like Webull.
For instance, Webull charges no commission for trading options and no contract fees. In contrast, Merril Edge, one of its traditional competitors, charges $6.95 as options commission and $0.75 as contract fees. Speaking of contract fees, they are a common feature for the traditional industry, as names like Fidelity, Schwab, or TD Ameritrade still charge them, albeit after lowering the rates so to become more competitive.
The old brokerage houses claim at running a different type of business. They address the experienced trader, the educated investor with plenty of funds to move around, and son. But the world changes. Baby boomers are challenged by hoards of retail traders willing to bet $100 bucks on a company’s stock just because they heard some influencer propping it up on social media. Multiplied by thousands and thousands of similar orders, that’s big business for a brokerage house. Until the traditional houses learn that, the new generation of traders will favor brokers like Webull, for the simple reason that it is cheaper to gain exposure on the same market instruments.
Like any other broker, there are pros & cons for investors/traders. Here are the main benefits and drawbacks you should know before applying:
Besides the regular trading hours, Webull covers both the pre-market trading activity (from 04:00 AM to 09:30 AM ET) and the after-hours trading (from 04:00 PM to 08:00 PM ET).
This way, traders make the most of the earnings seasons as many U.S.-listed companies report earnings after the market closing bell. This is were Webull stands out from the competition as traders can buy and sell even before or after the regular cash market trading hours.
By clicking the markets tab on the company's website, the trading platform opens in a new browser. The beauty of it is that you can have a look at its main features even without opening an account with the broker. However, to make the full out of it, consider opening a brokerage account as it comes at no cost – no minimum deposit required.
Yes, that is correct – no minimum deposit is required when funding a trading account with Webull. However, to make the most of all the trading features offered (e.g., margin trading), one needs a minimum balance of $2,000 available for trading.
One of the main advantages when trading with Webull is that its investing platform gives access to over 100 exchanges from all over the world and data for over 100,000 investment subjects.
While not having a live chat option, the good part is that there is always someone at the other end of the emails sent to Webull. Moreover, even the weekend hours are covered, so investors can fire their questions at any one time using the two available email addresses found on the website.
Not many brokers offer their investors the possibility to test the trading platform and their offering for free. Yet, Webull does, and this is a big plus for the broker. A free demo account goes a long way, sparing the company from additional costs for explaining the platform’s functionality or the markets offered.
One of the features Webull is proud of, as it insists it is a tech company, it makes it simpler for traders to check the account and to even close or open positions.
Margin trading refers to the ability to buy more than the balance of the trading account allows, by borrowing funds from the broker. Its main advantage is that traders can gain more exposure on market rallies, benefiting more (in this case, being able to buy twice or four times as much as their funds allow) from the upside potential. However, the risk increases too.
But margin trading is exceedingly popular and used by all brokerage houses on Wall Street and throughout America. Webull has a condition in place for trading on margin – $2,000 in the trading account. Therefore, this condition comes in sharp contrast with the claim that no minimum deposit is required when trading with Webull.
That is correct, but to benefit from all the account’s capabilities, there is a minimum amount to have in the account. It is just a different way to put things into perspective, offering it a different marketing twist.
Yet another company that allows only U.S. residents to open a trading account. The SEC regulation requires that, but it limits a company’s perspectives in terms of its ability to attract foreign capital.
For example, Webull offers ADRs (American Depository Receipts) that allows investors to invest in foreign companies. Investors may want to do that to diversify their portfolio and take advantage of other opportunities outside the United States.
ADRs are ideal products to gain such exposure. However, the problem is that the company does not offer any clues about what ADRs are available for trading until the trader opens a live account. The company does offer data for more than 100,000 investment subjects, but that is only data – it does not mean that one can trade that instrument.
No education material is available. The only thing that comes closest to such a thing is the blog on the company's website.
It covers some basic topics related to investing, such as what is margin trading or a cash account, but besides that, Webull ignores the education part completely.
Webull Trading Products
|Stocks||Thousands of stocks to create a diversified portfolio|
|ETFs||Gain exposure to market sectors via ETF trading|
|ADRs||Diversification benefits offered via American Depository Receipts trading|
Webull offers only two account types, with little or no details regarding their features – a regular brokerage account to access all its products and an IRA account for retirement.
For the IRA account, the investors may choose between Roth, Traditional or Rollover IRA.
Commissions and Fees
Low pricing is key to Webull’s strategy to attract clients. As such, it advertises $0 commissions for trading stocks, options, or ETFs. Indeed, commissioning is not on the Webull’s revenue stream. So how does it make money?
The answer comes from other areas like:
- Margin interest
- Interest on free credit balances
- Stock loans
- Payment order flows
For annual margin rates, Webull charges a declining interest rate the bigger the account. It starts from 6.99% for any account with a balance between $0 and $25,000 and shrinks to 3.99% for balances bigger than $3,000,000. The interest margin is paid monthly, though Webull calculates it every day. Also, when deciding to trade on margin with Webull, keep in mind that it offers four times the buying power during regular trading hours and only two times in after-hours trading. Also important – only accounts with over $2,000 are suitable for margin trading.
For short selling, a fee is calculated for the cost of borrowing shares. Just like the interest on margin trading, the short-selling fee or the stock loan rate is calculated daily based on the changes on the market and paid monthly.
On top of the fees mentioned earlier, Webull pays regulatory fees. The only thing is that instead of being paid by the brokerage house, they are passed to the investor. The reasoning – this way, Webull can offer commission-free trading.
Other relevant fees exist, but nothing new when compared with other brokerage houses. For example, Webull charges $45 per withdrawal via wire transfer or $25 for domestic transfers.
Clients can get in contact with the broker by sending an email or simply picking up the phone and call. Webull offers 24/7 online help in the sense that investors get an answer back to inquiries sent over the weekend too.
While not the equivalent of a live chat option, it goes a long way, ensuring that no question remains unanswered.
Trading at Webulls is done via a web-based trading platform. The good part is that it is easy to access it, straight from the broker’s web page, without the need to download anything. However, if web-based trading is not your thing, you can always download the desktop version and install it on your personal computer. It goes without saying that mobile trading is supported at Webull.
Still on the trading platform, it is surprisingly easy to use and intuitive. Moreover, the broker offers the possibility to open a demo trading account, so the investor gets the chance to become familiar with the trading platform’s capabilities before trading with real money.
As for the indicators, Webulls trading platform only offers 50 indicators and 12 charting tools, the classic ones without technical analysis would not be possible.
No trading or investing education exists. If we can call the blog on the company’s website a source for trading education material, then that is all you will get from this broker on this aspect.
Moreover, only a few, basic topics are covered, with the blog existing mainly to attract traffic to the company’s website.
Step 1: Visit the Webull broker homepage and then click “Open an account.”
Step 2: The next page comes up, where you either sign up via email or via mobile.
Step 3: You will need to put in your exact email address or phone number, because a verification code will be sent to that address or number to complete your registration.
Here are our 3 choices of brokers which can use as a great alternative to Webull:
The house of Morgan has deep roots in the international financial system. You Invest by J.P. Morgan is just that – the low-cost arm of J.P. Morgan. While aiming for low-cost transactions and a limited investing offering, they feel safer knowing that the J.P. Morgan’s expertise is behind You Invest. After all, the two entities share the same customer service and educational material.
You Invest is best for traders not affording a traditional brokerage account and will settle with similar features but at a lower cost. Yes, the product offering is limited. Not all markets are present, and one may lack the flexibility to diversify the portfolio the way it may wish to.
All in all, this is one of the best brokerage houses tackling the new generation of traders. Born out of the desire to compete with rising stars like Robinhood, You Invest comes with J.P. Morgan’s expertise and knowledge in the brokerage industry.
Even among its own competitors, You Invest stands out. For instance, it has a strong social media presence and a simple pricing and product structure.
Robinhood has been around for over a decade, and as the name suggests, the overall aim was to democratize finance for all, slashing the cost of trading stocks for U.S. residents.
Today, Robinhood is one of the most popular brokerage platforms. It is also due to expand its services to the U.K. in the near future. With its introduction of fractional shares, Robinhood caters to traders who are cost sensitive. The company also offers access to cryptocurrency markets.
The target client for this company is the younger generation. This brokerage house is challenging the traditional broker, making waves in the industry. Robinhood understands that while traditional brokers have more account types and cover more markets, they lack the ability for quick responses to customer changes. So, they aim to give clients the power to participate without the bulk from the traditional industry.
Although it has caused a great deal of damage to lots of businesses, Robinhood has enjoyed additional business. With little to no sporting events for people to bet on, newbie investors have turned to Robinhood. This is a sure indication that over the coming years, Robinhood will continue to grow.
SoFi invest is NOT just another brokerage house into the niche of fractional shares investing. Instead, it is a non-bank extending its services into the investing world.
SoFi is a good broker for those that do not afford trading with a regular, traditional investing house. High transaction costs and other barriers to entry (e.g., high minimum initial deposit) keep many wannabe investors aside – investors that just cannot afford the services but are willing to take a chance.
For such investors, SoFi is the ideal choice. No commissions or fees for transactions, easy-to-understand products (crypto, stocks, ETFs), one account to trade them all from, a friendly app, and the ability to start investing with as little as $1.
On the other hand, it signals a lack of expertise. It only shows how easy it is to enter the brokerage industry should one has the funds to meet all the compliance required by the SEC. And SoFi does have the funds from the other businesses that generate more cash flow.
Webull Broker best for…
While not a major inconvenience, it does make one wonder why there is so little info about the company’s background available. After all, before investing with a broker, the trader is responsible for due diligence, for finding out everything there is to know about the brokerage house, like its history, management, and so on.
But I guess being regulated by SEC and providing SIPC protection downplays the fears that the Webull has something to hide.