Webull Review – 2020

ADVERTISING DISCLOSURE

Webull is a free brokerage that lets you trade stocks, ETFs, and options via mobile app or desktop. Geared towards more active investors, Webull focuses on providing the tools and resources necessary to research and pick individual stocks.

If this doesn’t sound like you, you may want to learn the basics of how to start investing first. Otherwise, this Webull review will answer any of your questions before you sign up.

Many people often compare Webull and Robinhood. While Robinhood came first and helped standardize trading stocks without paying commissions, Webull extended the idea further. 

With Webull, you can use more advanced trading strategies and build on the core concepts Robinhood made famous. If you’re curious about learning more about Robinhood, check out our Robinhood review

Webull Review
webull logo

Name: Webull

Description: offers a robust variety of tools for the experienced investor. With commission-free trading of stocks, ETFs, and options, experienced investors will find a cheap and easy-to-pick-up alternative to traditional brokerages.

Overall
4.3
  • Pricing
  • User Experience
  • Ease Of Use
  • Customer Service

Summary

Webull offers a robust variety of tools for the experienced investor. With commission-free trading of stocks, ETFs, and options, experienced investors will find a cheap and easy-to-pick-up alternative to traditional brokerages.

Pros

  • Free stock worth $2.50 – $250 for signing up!
  • Ability to trade stocks, ETFs, and options without any commissions
  • $0 minimum investments
  • Trading simulator to practice investing risk-free
  • Ability to short assets
  • Allows you to invest on-margin (for a fee)
  • No inactivity fees, minimum deposits, or withdrawal fees
  • You can store your assets in an IRA or a taxable account
  • Extended trading hours
  • Email updates

Cons

  • Lack of ability to invest in mutual funds
  • No fractional shares
  • No premade portfolios
  • No options for dividend reinvestment
  • Many of the resources require paying for a subscription to access
  • Webull’s lack of explanations of its features can be intimidating for new and inexperienced traders
Webull free stock photo

How Does Webull Work?

Webull lets investors buy and sell stocks, ETFs, and options – all commission-free. You can keep your assets (money, stocks, ETFs) in either a taxable account or an IRA. Webull offers both Traditional and Roth IRAs.

Before we dive into the tools and services, let’s talk about how trading works on Webull.

If you want to trade stocks without fees or commissions, look no further. Using Webull’s search feature, you can look up a stock’s information. 

Webull offers a solid amount of information about the companies it lists for free, including return on equity (ROE), income statements, debt to asset percentages, and many others. You can also track any important updates live and pay for more advanced market data from non-US regions. 

Webull stock information photo

After you’ve looked at a company, you can trade the stock by clicking the large blue button in the bottom left corner or by taking advantage of Webull’s new “voice command” feature. This allows you just to say keywords like “buy” and “sell” to trade stocks or ETFs.

Webull offers several order types: limit orders, market orders, stop orders, and stop-limit orders. Also, you can set your order time limits as GTC or day.

Another big advantage Webull offers is trading during extended hours (4:00 am – 9:30 am EST and 4:00 pm – 8:00 pm EST). So, the experienced trader will have at least the fundamental tools at his disposal when placing orders through Webull.

You can also trade options on Webull without paying any contract fees or exercise fees. This can be a huge plus since a lot of traditional brokerages still charge per-contract fees.

Webull Pros & Cons

Webull Pros: 

  • You get a free stock worth $2.50 – $250 just for signing up!
  • Ability to trade stocks, ETFs, and options without commissions
  • $0 minimum investments
  • Trading simulator to practice investing risk-free
  • Ability to short assets
  • Allows you to invest on-margin (for a fee)
  • No inactivity fees, minimum deposits, or withdrawal fees
  • You can store your assets in an IRA or a taxable account
  • Extended trading hours
  • Email updates
  • A lot of useful resources available if you’re willing to pay
  • Good for day traders

Webull Cons:

  • Lack of ability to invest in mutual funds
  • Unlike Robinhood, Webull does not offer fractional shares
  • No premade / expert portfolios like M1 Finance
  • No options for dividend reinvestment
  • Many of the resources require paying for a subscription to access
  • Webull’s lack of explanations of its features can be intimidating for new and inexperienced traders
  • Advanced traders are likely better off paying commissions than buying Webull’s monthly subscription for level 2 access

Webull’s Key Features

Webull has a few prominent features that help it stand out from a lot of similar mobile-first brokerages like Robinhood. We’ll cover the main points: Webull’s free stock promotion, their laundry list of available tools, and their different account types.

Webull’s Free Stock

One of the most popular parts of Webull is the free stock users get when they sign up. The stock’s value is between $2.50 – $250, and they say it can take up to seven days to settle.

This means you may have to wait a week to be able to trade your newly gotten stock. Thus, there’s no promise that the stock’s value will stay above $2.50 if you’ve received it.

My free stock was Southwestern Energy Company (SWN), which Webull estimates to be worth $2.40. While this is lower than the originally stated $2.50, it’s still a free stock. It’s hard to complain about free!

Available Tools On Webull

The research tools are really where Webull shines most brightly. For a free brokerage, they offer a surprising array of different research tools.

My Watchlist photo

Webull’s watchlist lets you easily keep track of your favorite stocks in a single, customizable list. I found this tool useful to avoid constantly having to search for stocks as I investigated them.

Webull also allows you to turn on notifications for specific stocks on your watchlist. Using the Alert function, you can ask Webull to send you an alert whenever a security meets a specific condition.

The condition can be when the market price goes above or below a particular value or when the price moves by a certain percentage. If you’re afraid of missing out on a big movement, Webull’s Alert feature can be a huge help.

Webull’s Markets tab gives high-level information about current market conditions. Metrics such as net inflow and the best performing industries can help inform that day’s trading strategy. 

You can also use Webull to compare different stock indices against individual stocks to see how well you might be doing against the overall market. Or, you can compare different securities to measure their relative strengths.

When you search up a given security, you’ll see a page with some basic information. While the collection of information is useful, the advanced trader may find themselves wanting more. 

Broadly speaking, Webull offers information on the company’s financials (earnings forecasts, income statements, balance sheets), some key indicators (ROE, ROA, Debt to Asset, BVPS), and important metrics (PE ratio, earnings per share).

Webull’s Technical Data And Screener

Webull has several different indicators freely available, broken down into the following categories: 

  • Moving Averages
  • Support / Resistance Indicators
  • Trend Indicators
  • Overbought / Oversold Indicators
  • Market Strength Indicators
  • Other

We won’t go into a complete breakdown of each indicator since there are currently almost 50. But, some recent critical additions include RSI, ADX, and the ability to create Heiken-Ashi Candlesticks.

Technical indicators photo
T

While no service is likely to have every indicator out there, we were well-satisfied with Webull’s selection of technical data.

Webull’s stock screener also offers some useful added functionality. You can filter securities based on, among others, geographic region, analyst rating, available margin, financial indicators (P/E, EPS, Dividends, etc.), or technical indicators (MACD Golden Cross and KDJ Oversold).

The stock screener adds some simple quality-of-life improvements over other commission-free mobile apps like Robinhood. But, Webull likely won’t stack up against the offerings from a higher-end broker. 

Webull Account Types

You can open any of the following accounts on Webull: 

  • An individual taxable account
  • A margin account
  • Traditional or Roth IRAs

While a taxable account is standard and we discuss margin accounts below, the ability to use an IRA is significant. With an IRA, day traders can shield some or all of their gains from the short term capital gains tax.

This means you can feasibly pay much less in taxes than you otherwise would.

Day Trading On Webull

We’ve heard a lot of people ask, “Can I use Webull for day trading?” The short answer is, yes, but be wary of Webull’s DT calls. A Day Trading (DT) call is given when a user’s trades for the day exceed that day’s buying power and are designed to prevent excessive trading.

Webull explicitly states that these DT calls cannot be met by liquidating stocks. You must instead fund your account with the call’s total amount. After you’ve deposited enough money, you must keep the money in the account for a minimum of 48 hours before meeting the DT call.

These are the penalties for open and past due DT calls, as outlined by Webull:

“1) If you have one open DT call, initial day trade buying power will be calculated on a 2 times basis along with no time and tick release (PDT account), Non-PDT accounts will be calculated on a 4 times basis and still not use time and tick release.

2) If you have one DT call past due, your account will be restricted to liquidation-only status for 90 days.

3) If you have two DT call past due, your account will be closed for 90 days. You can deposit funds in your account during this period to meet the DT calls; doing so will reopen your account.”

Webull.com

However, this doesn’t mean you can’t use Webull for active trading. Their analytics provide more than enough information to do due diligence.

In fact, Webull goes out of its way to remind you about relevant stock information, including sending email updates about when a company in your portfolio will announce its earnings.

Given that this announcement could affect the company’s stock, it’s certainly a useful feature for the active trader to have.

Webull’s Real-time Data

Webull offers users free access to real-time data for US markets. But, you’ll have to pay to subscribe to data packages from international markets like London or Hong Kong.

By default, Webull only offers level 1 stock data, but this can also be upgraded with a subscription to level 2 data packages.

Webull premium data packages photo

However, it’s worth noting that even with only the information offered for free, Webull still provides an impressive amount of real-time data. This includes current prices as well as relevant market updates, and the homepage for Webull’s data is highly customizable. So, you can design whatever layout works best for you to stay up to date on what’s currently happening in the market.

Short Selling And Investing On-Margin

If you want to short sell stocks or ETFs, Webull lets you do this commission-free. The only requirement is the standard account balance of at least $2,000 as required by law. This is the same requirement for investing on-margin.

In this respect, Webull is very ahead of the game. There aren’t many other freely available brokerages that allow you to short sell stocks, especially without a commission. 

Webull lets you invest on-margin with 4:1 leverage on same-day trades and 2:1 leverage on overnight trades. This is useful if you want to buy on-margin and increase your potential earnings.

Webull Fees & Commissions

Webull, for the most part, does not charge any fees or commissions.

They charge no fees or commissions on trades for stocks, ETFs, or options, unless you’re short selling or trading on-margin. If you do opt for margin trading, you’ll have to pay Webull’s annual margin (fee) rate. This rate changes depending on the balance of your debit account:

Debit Account BalanceWebull Annual Margin Fee
$0 – $25,0006.99%
$25,000.01 – $100,0006.49%
$100,000.01 – $250,0005.99%
$250,000.01 – $500,0005.49%
$500,000.01 – $1,000,0004.99%
$1,000,000.01 – $3,000,0004.49%
$3,000.0001+3.99%

As you can see, this rate decreases the more money you have in your account. 

You’ll also have to pay interest for short selling stocks based on the stock loan rate and that stock’s daily market value. This rate is subject to change regularly, so it’s important to understand its fluctuations. 

The handful of fees Webull charges are listed plainly on the platform, but here’s a quick breakdown of them:

  • Deposits via wire transfers from a US account = $8 per deposit
  • Withdrawals via wire transfers from a US account = $25 per withdrawal
  • Deposits via wire transfers from a non-US account = $8 per deposit
  • Withdrawals via wire transfers from a non-US account = $25 per withdrawal

Beyond these fees, Webull only charges the federally-mandated fees. You’d have to pay these fees with any broker, so this shouldn’t be a differentiating factor in whether to use Webull.

How To Get Started On Webull

Creating an account takes only a couple of minutes and takes place entirely within the app itself. You fill out your name and email address, pick a username and password, enter some basic contact information, verify your identity by filling out some more standard information including your social security number and citizenship status, and then select how you want to fund your account. After that, you’re ready to go. The whole process took me 2 minutes!

You can go through this process on your phone or desktop, so take your pick.

From there, you’ll get to your free stock. You can also get a second stock, completely free, by connecting to your bank account and funding your Webull account with at least $100. This second stock’s value is between $12 – $1,400.

Webull stock reward program photo

That means you can get two stocks that total between $14.50 – $1,650. Note: these numbers are known to change over time, but they should stay in the same ballpark.

After you’ve claimed your free stocks from Webull, you have two options: simulated investing or real investing. 

If you want to use Webull’s demo account, Paper Trading, feel free to dive right in. You’ll receive $1 million of fake cash to start trading. This is a great way to test out new ideas, practice executing trades, or anything else you may want to do using real data but no real risks.

Alternatively, you can fund your account and start trading for real.

How Does Webull Earn Its Money?

Webull states very clearly on their site that they earn money via the following methods:

  • Paid data subscriptions
  • Interest on cash balances 
  • Fees to invest on margin 
  • Payment for order flow

While these are all standard industry practices, here’s a quick breakdown of each of them.

Webull’s paid data subscriptions provide access to several sources. Costs range from $2.99 per month for Nasdaq Basic or Taiwan Stock Exchange Level 1 to $59.99 for Hong Kong Stock Exchange Level 2. 

These subscriptions can be useful to traders who utilize time and sales data to plan entry and exit points. If this is you, you should also consider subscribing to a source on an annual basis rather than a monthly one, since you’ll receive a discount on the total cost.

Webull earns money through interest on their users’ cash balances. Operating similarly to a bank, Webull lends out securities and cash held in checking accounts to other institutions and charges those companies interest.

The fees traders pay for margin investing go directly to Webull. 

You can read more about payment for order flow in our Robinhood review. But simply put, it’s when a third-party company pays a company like Webull to send their clients’ stock or ETF orders to one market maker instead of another.

Is Webull Safe?

The short answer is, yes. Webull not only provides SIPC insurance, which covers up to $500,000 in securities or $250,000 in cash, they also have backing from Apex Clearing. 

Apex Clearing insures up to $150 million in combined cash and securities. The limits for individual investors’ insurance are $900k in cash per customer and $37.5 million in securities per customer. 

All of this means your funds are extraordinarily safe, given the extra insurance provided by Apex Clearing. 

While a security breach is always possible with any company, Webull encrypts your personal data and does not store the information locally or sell it to other third-parties. This means connecting Webull to your account involves minimal risk.

Should You Use Webull?

Webull certainly has a good amount of information and metrics at its disposal. However, this is likely not the right product for a new investor. Many of the main selling points of Webull are tied to its ability to execute more complex trades. 

If you lack the knowledge or comfort to do those, you may want to check out Robinhood or M1 Finance instead.

That said, the ability to invest with an IRA provides useful ways to avoid paying excessive capital gains taxes on any short term gains. Investors should take advantage of these accounts with the peace of mind that they’ll be protected through both the SIPC and Apex Clearing. 

Ultimately, Webull offers a robust variety of tools for the experienced investor. With commission-free trading of stocks, ETFs, and options, investors will find a cheap and easy-to-pick-up alternative to traditional brokerages.

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