Margin Interest Rate Webull

Margin Interest Rate Webull

Webull, one of the newest online brokers, was founded in 2017 and launched with a mobile app only in May 2018. This mobile first launch was reflective of Webull’s most important target market: millennials. Webull is positioning itself to serve newer and more active traders, and others drawn to a platform offering a broad range of services for free, including no account minimums, commission free trading of stocks/ETFs and their options, and multiple cryptocurrencies. Webull does skew towards the self-directed investor, with a less comprehensive offering than full service competitors. That said, Webull customers get a lot of bang without the buck: a nice platform with a wide range of helpful tools and features, along with competitive margin rates. We’ll take an in-depth look at Webull to help you decide if it is the right broker for your portfolio needs.

Webull was Investopedia’s winner for Best Broker for Low-Cost Options Trading, Best Low-Cost Day Trading Platform, and Best Low-Cost Options Broker in our 2021 Best Online Brokers Review.

KEY TAKEAWAYS

  • Webull does not charge commissions for stock, ETF or option trades. There are no minimum account requirements. Margin trading is available for accounts with a minimum of $2000.
  • Webull offers options, stocks, ETFs and cryptocurrencies. This smaller selection of assets is meant to serve a client base that skews towards younger, self-directed customers comfortable with technology and wanting information on the go.
  • Webull is easy to use, providing good trading functionality and a broad package of tools and functionality including news, fundamental and technical analysis, and stock screeners.
  • Webull is not the broker that people should use if they are looking for more products such as managed accounts, mutual funds, fixed income, and mutual funds. Investors who prefer working with an investment advisor and want access to live trading assistance should look elsewhere.
  • Fractional cryptocurrency trading is possible in multiple cryptocurrencies including Bitcoin, Dodgecoin and Bitcoin Cash.

Who is Webull for?

Webull is for investors who want to get into financial markets with no minimum account sizes and commission free trading. Webull isn’t a full-service broker. Its customers require a DIY approach to some aspects of portfolio management. Webull customers have skewed younger than at other brokerage companies. Active traders will be attracted to the broker’s free model. Webull’s no-cost options trading will be particularly appealing to active traders. This is because all other brokers, including those that offer free stock and ETF trades such as Schwab, still charge commissions for each leg.

Pros

  • No commissions on stocks/ETFs, options, or cryptocurrencies
  • No minimums or fees, easy account setup
  • Free real-time streaming quotes
  • Simple to use platforms that provide excellent content and tools
  • Access to trading hours that are extended and pre-market

Cons

  • No income on excess cash
  • Potential for execution to be halted by payment of order flow
  • Portfolio management tools are limited in number
  • No access to fixed income, mutual funds, foreign exchange, or futures markets

Pros Explained

  • Webull offers something free of charge. No commission stock, ETF, option, and cryptocurrency trading is particularly appealing to traders that don’t need their hands held. Lower implementation costs makes it easier for traders to profit off a trading strategy.
  • The account opening process only takes a few minutes. It takes only a few minutes to get approval for account and options trading. You can also add your bank account or set up an ACH transfer free of charge in a matter of minutes. Even though the transfer might not be completed for several days, you will receive purchasing power.
  • Webull offers free real-time streaming quotes, and a three month free subscription to Level 2 Advance quotes. The service is Nasdaq TotalView, and it provides a greater depth of bids and asks on a security as well as information showing market depth. You can also find auction crossing information for all NASDAQ NYSE stocks and regionally listed stocks on NASDAQ Marketplace Center.
  • Webull’s desktop and mobile application platforms are relatively new, so it has a fresh, intuitive design and is easy to use. All the tools available are free and packed with useful tools to trade. The customizable workstation platform provides news, fundamental information on companies, and has watchlists, a stock screener, charting, and aggregate ratings from multiple analysts. Despite the information density, all of this is set up to work effectively in a streamlined way.
  • Many active traders like to trade the market in the pre and/or extended hour trading periods, and Webull customers have the ability to access these hours. Traders can choose whether they want their orders active during the non-regular trading day times.

The Cons

  • Customers of Webull do not receive interest on any cash balances. Webull does not support mutual fund trading so customers cannot proactively invest any cash in a money-market fund. In today’s low short-term interest rates, this may not seem to be a problem. However, the potential loss of interest on cash could be more apparent if rates rise.
  • Webull can offer trading and all other services for free because it receives payment for order flow (PFOF). This may affect Webull’s execution quality. The speed and precision that orders are generally filled at today somewhat lessens this as a significant issue for most traders, but day traders and those using other strategies highly dependent on execution quality may be at a disadvantage.
  • While Webull provides a lot of helpful tools for traders on its platform, the portfolio management tools are lacking. Webull customers are expected to be self-sufficient in making their own investing/trading decisions. There are no intra-day or daily market letters and no analyst reports or research on stocks other than aggregated analyst statistics. Webull does not offer financial advisors, recommended portfolios for rebalancing, control of tax lots on sales, or offer a dividend reinvestment program (DRIP). Webull currently doesn’t offer fractional shares. However, the broker stated that they are working on adding fractional stock shares.
  • Stocks, ETFs, options and cryptocurrencies make up the entire menu at Webull. Webull does not offer fixed income investments, mutual funds or international equities, options, or foreign currency offerings. You get what you see.

Usability

Webull is easy to use, with clean and intuitive navigation. Webull has a website, a desktop workstation, and a mobile app that are all similarly well designed. Because they were built so recently, the platforms have a modern look.

The website and desktop workstation are almost identical. They share the same menu and window layout. This main set of buttons is located on the left side of your screen. These buttons allow you to launch customizable quote boards. A stock page that provides a wealth information about a single stock, ETF or stock, as well as a market overview page and stock screener. An account tab shows balances, positions and buying power. You can also access bank transfers to and from your account. There is also a dedicated paper trading area. There are some minor differences between the website and the workstation, and the website only supports single leg options.

The mobile app uses primary features in a way consistent with the website and workstation, but there are design differences to handle the smaller screens the app is used on. The menu buttons on the bottom of the app screen change to be relevant to the content shown at the time. An example of this is the options button, which appears at the bottom to show an individual stock/ETF.

Watchlists can be easily created across all platforms directly from stock screener results. You don’t have to create watchlists on different platforms. Watchlists are also consistent across all platforms, including the web, mobile, and desktop. Order entry is straightforward, and traders can even customize trading ticket information such as order type and share amounts they most commonly use.

Trade Experience

Webull’s workstation can be customized to suit your needs. There are templates for day trading, stock trading, ETF trading, options trading and cryptocurrency trading. Traders can switch between these different template pages, and can build their own page layouts from scratch through widgets. Each widget contains different information such as news, basics, options, order entry, sales, time, and so forth. To save screen space, the widgets can be combined. The different widgets are accessible via marked tabs at top of the window. Widget windows can also be grouped together so a stock entered in one of the widgets will automatically update in the other widgets in the group.

Trading setups allow for highly customizable user experiences, such as hot keys, home page loaded at startup, default stock, option orders and commonly used share quantities. You can do the most customization and flexibility on your workstation. The website did not have all of the trading page templates available on the workstation, and the learning center was not accessible from the website. The system will guide you to different pages when appropriate, such as taking you to the stocks window to see stock-specific information, news, options, charting, and an analyst ratings overview.

It is easy to enter an order through Webull. The order screen can be added to different screens, and the stock order entry screen includes contingency orders for stop loss and/or profit taking levels. Order tickets can be created directly from your account holdings. Simply click on the market bid or offer to automatically add that information to the trade order widget. Trading was also available directly from the charting program, with active positions and orders clearly shown on the chart.

Mobile Trade Experience

As mentioned, although there are some minor differences between the website and the workstation, there is a basic consistency across all the platforms. Although the mobile app offers the same basic features of the website and the workstation, there are some design differences that allow for smaller screens. Menu buttons adapt along with the content screen you are on, serving up the main functions that you are likely to need. Mobile charting allows you to trade directly from the chart and shows you your open positions. Webull’s drawing tools are also much easier than many other brokers’ mobile charting software. The mobile app doesn’t allow access to Webull’s stock screener, but you can convert search results done on the website or workstation into a watchlist that will sync to the mobile app.

Range of Offerings

Webull focuses exclusively on U.S. Stock, ETF and U.S.-listed options. Webull offers only personal and IRA accounts within the United States. Although Webull’s product offerings are not as extensive as full-service brokers, they can meet the needs for younger customers who are less interested in fixed income. Webull allows trading in multiple cryptocurrency for as low as $1, which is a departure from many full-service brokers. There is no fixed income, mutual fund, futures, or traditional foreign exchange trading available. Investors using Webull can trade the following:

  • US Stocks/ETFs, long and short (2,0005 stocks) are currently listed on Webull’s easy-to-borrow list for short sales
  • US Listed Options on stocks and ETFs
  • Cryptocurrency trading in Bitcoin, Dodgecoin, Bitcoin Cash, Ethereum, Litecoin, ZEC, and XLM
  • Note: NY State is the only US state that has not yet approved cryptocurrency trading on Webull, but the company expects the approval shortly.

Order Types

Webull offers most of the most popular order types such as market, limit and stop, stop limit, stop limit, trailing stops, and stop limit. There are also specialty orders such as one-cancel-the-other (OCO), one-triggers-an-OCO (OTOCO), and one-triggers-the-other (OTO), allowing traders to setup a conditional order where a filled limit order establishes an OCO attaching both a stop loss and a profit taking level order once the initial position is established. Webull does NOT offer market-if touched, market on-close, or similar orders.

Webull doesn’t offer traders control over tax lots on sales to close a long stock position; they use the first in, first out (FIFO) methodology. Webull does not offer automated trading, backtesting strategies or the ability to place orders.

Trading Technology

Although Webull’s trading technology may be basic, it can get the job done. Webull reports a net price increase of 0.0056 per share and $1 for each option contract. No smart order routing, trading automation, backtesting, or route control are available. That said, this is in keeping with the broker’s bare bones approach to keep costs down.

Prices

Webull is a no cost broker, not a low cost broker. They offer commission free trading in stocks, ETFs, and listed options, and they do not charge a fee for account minimums or for their robust platforms and tools. Webull’s margin rates are also competitive. When we talk about commission free trading, that means Webull does not charge for trades, but they do pass through Securities and Exchange Commission (SEC) transaction fees and various exchange and regulatory fees, which are typically pennies or fractional pennies per contract. Webull’s costs are as follows:

  • No commissions for online trades in equities, ETFs, or OTCBB trades
  • No commissions on exchange traded options
  • No commission on cryptocurrency trading
  • Margin is available for both leverage and short sales, and margin rates are based on account size. Breakpoint: Below $25K 6.99%, $100K 6.49%, $250K 5.99%, $500K 5.49% and $500K 5.49%. $1MM 4.99%. $3MM 4.49%. And >$3MM 3.99%.
  • Money transfers: There is no charge for ACH deposits and withdrawals. Wire Transfers cost $8 for US deposits and $12.5 if you are international. $25 for withdrawals within the US, and $25 for international withdrawals.
  • Charges for paper statements: confirmations are $2 for each confirm, account statements are $5 a statement; and the prospectus fee is $2.5 per mailing

How this broker makes money for you and from you

With the race towards no commission trading, understanding how brokerage companies generate revenue has become more opaque. Webull is unabashed in telling investors how they make money that allows them to provide a sophisticated platform and zero fee trading.

  • Payment from Order Flow: Webull clearly wants to be the first to offer no commission trading. Options are now free to trade on Webull. Webull’s pricing page is very clear and states that PFOF is the reason they are able to offer no commission trading. Webull receives an average of $0.00024 per share for its order flow, and an average of $0.525 per options contract; Webull’s price execution improvement averages are $0.0056 per share, and $1 per option contract.
  • Interest on Cash: Another important revenue stream for Webull is its ability to generate income from cash in its traders’ accounts, as the company does not pay interest on cash balances. Webull keeps the interest earned by Webull if you have cash in your bank account.
  • Stock Lending Program: Webull offers a stock lending program. The investor who lends the securities shares the revenue. The market demand for your securities determines the interest rate.

Account and Research Amenities

Webull offers a broad array of account information and research amenities, including fundamental data, news, and charting to help traders make informed investment decisions and identify stocks to trade. Webull doesn’t offer the same tools and information as full-service brokers such as individual analyst reports, daily market reports, or portfolio analysis tools.

Stock Screener

Webull offers a stock screener. It is available on the website and at the workstation, but not in the mobile app. The screener is limited to stocks and is easy enough to use, but it does not offer all the functionality that rival broker screeners offer. You can select from the United States, China, and Canada only; Webull provides data and charting for US, Honk Kong, Canada, China, and India markets, but it appears U.S. account holders are limited to trading in U.S. markets. For the U.S., you can select the exchanges to include (NYSE, AMEX, NASDAQ), and can filter by more than 25 industry sectors, financial information such as EPS, P/E, Dividends, and by nine pre-set technical indicators including overbought/oversold and moving average crosses.

Although the technical indicators are simple to use, they are not very comprehensive. We were unable to screen for stocks above their 200 moving. Other filters available include a consensus analyst rating with five grades (strong buy, buy, hold, underperform, sell) and if the stock can be traded on margin. Stocks can’t be screened for socially responsible investing (SRI). You can save a customized search and convert it to a watchlist. Choosing any of the stocks on the search results provides key statistics and financial information and an order window for that stock on the same page.

ETF and Mutual Fund Screener

Webull does not offer an ETF screener, and they do not offer mutual funds on their platform at all.

Options Screener

Webull does not have a screener to identify specific option trade opportunities, but they do have tools to help construct the most common one, two, and four leg option strategies (vertical spreads, straddles/strangles, butterflies/condors, etc.) using a drop-down menu on the option chain table to select the strategy. The strategy’s payout graph will be displayed at maturity. You can also customize it by choosing different order types and adjusting the strike price ranges in multi-leg strategies.

Fixed Income Screener

Webull does not offer fixed income on their platform.

Charting

Webull built its own charting functionality, and it is a solid offering. The mobile app charting interface is smaller than the web and works well on small screens. Order tickets and alerts can be created directly from charts, and analysis like Bollinger Bands(r), moving and exponential moving averages (MA/EMA), relative strength index (RSI), average trading range (ATR), multiple stochastics variations, and other commonly used analysis can be easily added to a chart. It seems strange that the 50, 100, and 200-period MAs were not included in the six defaults.

Webull is a new web-based trading platform that has made waves in the Forex market. Webull, which is operated by Chinese online holding business Fumi Technology, enables clients to purchase and sell an assortment of virtual assets, such as shares, ETFs, derivatives and commodities such as gold, dogecoin and shiba inu coin. You can also get market commentary and trade alerts from industry experts to help you make informed investment decisions. A demo account with the webull trading app is required for investors to get a feel of how the system works and to determine its suitability for their investment goals.

 

The Java-based software platform used for desktop trading platforms is the basis of the webull trading app. The webull platform allows access to real time quotes of stocks and options as well as to fundamental data such as market depth, price and volume. The webull desktop trading platform is designed for both iOS and android devices and comes loaded with over one million product images and a large variety of media files. To use the webull app, first download the free trial web version and install the webull trading platform on your phone. In less than five minutes you are all set and ready to trade from anywhere in the world!

 

Webull allows traders to buy and sell securities with real money. This means that webull trading does not require any particular expertise in order to execute trades. The app uses mathematical algorithms and sophisticated algorithms to identify good opportunities and prevent losses. It analyzes market signals and actions and then makes trades. For example, once the app identifies that the peak volume for a given security may be on the rise, it immediately alerts traders so that they can take action before the price starts to move. The best part is that all trades are fully customizable. Trades can be customized to allow traders to set investment limits, strike amounts, and stop loss types. This allows them to set custom or automatic limits at the time they feel the investment is at risk.

 

Webull requires a minimum deposit to trade. The maximum amount is unlimited. Once investors have created an account with webull, they can start depositing funds into their new account. Traders can start either holding a ‘buy’ or’sell’ option, and they are able to do transactions in two ways – using cash transactions or using credit card transfers. Using credit cards is recommended for smaller investments because there are more transfer fees.

 

Many people have asked us why webull is better than traditional trading platforms. We can tell them that webull allows investors to conduct two types of transactions – buying and selling. Traditional trading requires that you wait until the end to complete a transaction. This will be reflected in your profit or loss statement. You can choose the time you want to make a transaction with webull. This will be reflected on your trading Profit and Loss Statement. Trading with webull allows you to set a limit on how much money you are willing and able to lose. This gives you more control over your investments and accountability.

 

Another reason why webull is superior to other systems is that the webull financial trading platform provides investors with real-time protection from third parties. Because webull has a counterparty protection feature, it is impossible for anyone but the authorized user to modify, change or close your accounts. Webull offers true asset protection. This is far better than any other system that doesn’t offer this level of protection. We can also tell investors that by using webull, they will not be legally obligated to pay taxes on the gains from their investments in the U.S., as webull contracts and investment deals are not considered income for the taxable year.

 

Many traders use webull as their main trading platform, but there are many others who also use it for back-testing, fundamental tests, and even for their margin calls and transactions. Webull can also be used by investors for their custom trading needs. For instance, some brokers provide webull trading as a free service to their clients. This service may be offered by some webull brokers for a small fee. Webull is a great product for investors large and small because of all the benefits it offers.

 

Overall, webull is an excellent platform for new traders, as well as experienced ones, because it provides a low-cost, hands-free, transparent way to trade on the equity market. The investor can decide how much he/she trades because there are no fees or commissions to pay. Overall, it is hard to beat webull.

 

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