Introduction
Webull is a relatively young online broker that was just established in 2017. The company is wholly owned by Chinese investors and has its headquarters in New York. It has just expanded its operations to Hong Kong and Singapore. This mobile-first launch that took place in May 2018 was a reflection of Webull’s most important target demographic, which is comprised of millennials. Webull is positioning itself to serve newer and more active traders, as well as others who are drawn to a platform offering a broad range of services for free. These free services include trading of stocks/ETFs and their options, as well as multiple cryptocurrencies, with no account minimums required. Webull’s product is less comprehensive than that of its full-service competitors, reflecting the company’s orientation on the self-directed investor. Having said that, consumers of Webull receive a lot of value for their money in the shape of a good platform that includes a broad variety of helpful tools and services, in addition to attractive profit rates. In order to assist you in determining whether or not Webull is the broker that best meets the requirements of your portfolio, we will do an in-depth analysis of the company.
Stock Screener
Webull has a stock screener, available on the workstation and website but not 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.
The technical indicators are easy to use, but somewhat limited. We were unable to screen for stocks above their 200-period moving average. 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.
Pros & Cons
Pros
• There are no commissions charged on stocks, exchange-traded funds (ETFs), options, or cryptocurrencies.
• Simple account setup and acceptance of available alternatives, as well as no fees or minimums
• Access to free streaming of real-time quotations
• There is now the option of purchasing fractional shares
• Ability to trade before the market opens and throughout extended hours
Cons
• There is no interest earned on overage funds
• The possibility of sacrificing execution because of compensation for order flow (PFOF)
• Only a limited number of tools are available for managing portfolios
• There is no access to fixed income markets, mutual fund markets, currency exchange markets, or futures markets
The Positives Exposed
Everyone wants something for free, and that is exactly what Webull gives. There are no commissions on stocks or exchange-traded funds (ETFs), options, or cryptocurrencies. The ability to trade stocks, ETFs, options, and cryptocurrencies without paying a commission is especially enticing to investors who are comfortable trading independently. It is much simpler for traders to turn a profit off of a trading technique when the implementation expenses are lower.
The procedure of opening an account only takes a few minutes, and there are neither fees nor minimums to worry about. • Easy account creation and options approval. You will gain clearance for both your trading account and your options trading pretty quickly, and adding your bank account and setting up a free ACH transfer takes no more than a couple of additional minutes of your time. You will be able to obtain buying power on the account after the transfer has been set up, even though the transfer of funds might not be completely completed for a few days.
• Free real-time streaming quotes: In addition to providing free real-time streaming quotations, Webull also provides a free subscription to Level 2 Advance quotes for a period of three months. The service in question is called Nasdaq TotalView, and it gives users access to information displaying market depth in addition to a larger depth of bids and asks on a securities. On the NASDAQ Market Center website, you can get information about auction crossing for all equities listed on the NASDAQ, the NYSE, and regional exchanges.
Webull has expanded its offerings to include fractional shares in the past year, making fractional shares available to customers. This enables investors to buy a portion of a share based on the amount of money they have available to invest in the company.
• Access to extended hours of trading as well as pre-market trading: There are a lot of active traders who prefer to trade the market during the pre and/or extended hour trading periods, and Webull customers have the possibility to access these hours. Traders have the option of deciding whether or not they want their orders to be active at periods that are not considered normal trading hours.
Defining the Drawbacks
Webull does not pay clients any interest on cash sums that are held in their account, therefore customers who have extra cash do not get any revenue from that cash. Customers of Webull are unable to proactively invest any unused cash they have in a money market fund because the brokerage does not facilitate the trading of mutual funds. It’s possible that this won’t be much of an issue given the current climate of extremely low short-term interest rates; however, if rates were to rise, the opportunity cost of missing out on earning interest on surplus cash would likely become more apparent.
• Potential give up on execution due to payment for order flow (PFOF): Webull is able to offer free trading in addition to all of its other services as a result of the payment for order flow that it is receiving (PFOF). Because of this, the quality of Webull’s price execution may suffer. Although the speed and precision with which orders are generally filled in today’s market helps to mitigate the significance of this issue for the majority of traders, day traders and those utilising other strategies that are highly dependent on execution quality may find themselves at a disadvantage.
• Webull’s platform offers traders a wide variety of helpful tools, but the tools for managing their portfolios are limited in scope. Despite the fact that Webull offers a wide variety of helpful tools for traders, the facilities for managing their portfolios are inadequate. Customers of Webull are expected to be self-sufficient and capable of making their own judgments on investing and trading. There are no market letters published on a daily or intra-day basis, and there are no research or analyst reports on equities other than aggregated figures from analysts. Webull does not provide investors with financial advisors, dividend reinvestment programmes, advised portfolios for rebalancing, or control of tax lots on sales (DRIP).
• Webull does not provide access to the fixed income, mutual fund, foreign exchange, or futures markets. Instead, its product offering consists solely of stocks, ETFs, options, and cryptocurrencies. Webull does not make any offerings in the categories of fixed income investments, mutual funds, international equities, futures, or foreign currency. You will receive exactly what you see.
Usability
Webull’s navigation is streamlined and straightforward, making it a breeze to use. Webull offers a desktop workstation, a website, and a mobile app, all of which have designs that are on par with one another in terms of quality. As a result of the platforms’ relatively recent construction, they all have a contemporary appearance and atmosphere.
Both the desktop workstation and the website have a menu and window layout that concentrates on a major set of buttons running down the left side of the screen. These two interfaces are virtually indistinguishable from one another. These buttons bring up quote boards that can be customised, a stock page that provides a wealth of information on a single stock or ETF, a page that provides a broad market overview, a stock screener, a trading screen that is highly customizable on the desktop platform, an account tab that displays balances, positions, buying power, performance, and risk level related to margin leverage, access to bank transfers into and out of the account, and a specialised paper trading area. There are a few minute distinctions between the website and the workstation, the most notable of which is that the website only offers options for a single leg.
The major functionalities of the mobile app are implemented in a manner that is similar with the way they are implemented on the website and the workstation; however, the mobile app’s design differs to accommodate the smaller displays that it is utilised on. The buttons that make up the app’s navigation menu move around so that they are always relevant to the material that is currently being displayed on the screen. For instance, a choice in the form of a button labelled “options” appears at the bottom of the stock screen that displays a particular stock or ETF.
Directly from the findings of stock screeners, watchlists may be quickly and easily generated on all supported platforms. Watchlists are also constant throughout the desktop application, the web, and the mobile app, which means that you do not need to configure these on various platforms. The entry of orders is simple, and traders can even personalise the information that appears on their trading tickets, including the order type and share quantities that they most frequently employ.
Trade Experience
The workstation that Webull provides is very modifiable, and there are templates available for day trading, options trading, day trading, trading cryptocurrencies, and trading equities and ETFs. Traders have the ability to toggle between these several template pages and construct their own page layouts from scratch using widgets. The widgets each hold a variety of information, including order input, time and sales, fundamentals, news, and options, amongst other things. It is possible to combine the widgets in order to save screen space, and the various widgets can be accessed through the tabs that are marked at the top of the window. It is also possible to group widget windows together such that if a stock is updated in one of the widgets in a group, it will immediately reflect in all of the other widgets in that group.
A highly personalised user experience is also possible with the trading configuration thanks to features such as hot keys, a home page that loads automatically when the programme begins, preset stock and option orders, and frequently used share numbers. The workstation offers the greatest degree of adaptability and personalization of any other area. The website did not contain all of the trading page designs that were available on the workstation, and the website did not provide access to the learning centre. When necessary, the system will direct you to a different page, such as moving you to the stocks window so that you can read information relevant to specific stocks, such as news, options, charting, and an overview of analyst ratings. It is also essential to remember that the platform does not permit trading in multiple legs of options at this time.
Webull makes it simple to place an order through their platform. The order screen is one of those that can be added to a variety of other screens; for example, the stock order input screen includes contingent orders for stop loss and/or profit taking levels. You can also generate order tickets straight from the holdings in your account. If you click on the bid or offer of a particular market, the relevant information will be entered into the trade order widget immediately. Trading was also possible straight from the charting tool, and both open positions and open orders were presented in a clear manner on the chart.
Mobile Trade Experience
On May 23, 2022, the corporation made the announcement that Webull 8.0 had been released. The most recent edition of the mobile app offers traders more educational and modifiable information, such as enhanced charting tools, alerting settings, options trading, and financial reporting capabilities. The mobile app, the website, and the workstation all have the same fundamental functionality; however, the mobile app is designed differently to accommodate the smaller screens. The menu buttons adjust themselves to match the content screen that you are now viewing, providing access to the primary functions that you are most likely to make use of. The charting on Mobile not only displays open positions but also enables trading directly from the chart itself. The mobile charting software used by many other brokers was more difficult to use compared to the sketching tools provided by Webull. The mobile app does not provide access to Webull’s stock screener; however, search results completed on the website or at a workstation can be converted into a watchlist and synchronised with the mobile app.
Variety of Services and Products
Webull is focused on the United States. Webull’s product offerings may not be a match for the breadth of offerings available at full service brokers, but they do meet the needs of their younger customer base, which is less interested in fixed income. Webull offers stock and ETF trading, as well as U.S. listed options, and the only accounts it offers in the United States are personal and IRA accounts. Webull, in contrast to the majority of full-service brokers, allows customers to trade in numerous cryptocurrencies for as little as one dollar. In addition, the company is now doing beta testing on a cryptocurrency wallet. However, the company does not offer trading in fixed income, mutual funds, futures, or the more traditional form of foreign exchange. However, during the course of the past year, Webull has expanded its offering to include both OTC stocks and fractional shares, which means that the selection is continually expanding. Investors that use Webull have the following trading options:
• Long and short positions on US-listed stocks and exchange-traded funds (2,085 equities are now included on Webull’s easy-to-borrow stock list for short sales)
• Options on US-listed stocks and exchange-traded funds (ETFs)
• Over-the-counter (OTC) securities with a market value of 100 or more 5
• Trading in many cryptocurrencies, including Bitcoin, Dodgecoin, Bitcoin Cash, Ethereum, Litecoin, Shiba Inu, Chiliz, Synthetix, Gala, and more.6
Order Types
Webull provides access to the order types that are utilised the most frequently, such as market, limit, stop, stop limit, and trailing stops. There are also specialty orders such as one-cancel-the-other (OCO), one-triggers-an-OCO (OTOCO), and one-triggers-the-other (OTO), which enable traders to set up a conditional order in which a filled limit order establishes an OCO attaching both a stop loss and a profit taking level order once the initial position is established. These orders include one-triggers-an-OCO (OTOCO), which stands for one- Webull does not provide customers with the option to place market-if-touched, market-on-close, or comparable orders.
Webull does not provide traders control over tax lots when they are selling long stock positions; instead, they adopt the first in, first out (FIFO) system. In addition, Webull does not offer automated trading, the capability to stage orders, or backtesting of trading techniques.
Technology Used in Trading
The trading system that Webull uses is really simple, yet it does the job that it’s supposed to. There is no intelligent order routing, no trading automation, no backtesting facilities, and no ability to route your own orders. Webull estimates a net price improvement of 0.0083 per share on an order size of 100-499.7 There is no method to route your own orders. Having said that, the broker’s minimalist approach is consistent with this, as it helps to keep costs to a minimum.
Costs
Webull is not a discount broker; rather, it is a broker that does not charge any fees. They do not charge a cost for account minimums and do not charge commissions for trading stocks, ETFs, or listed options. Additionally, they do not charge a price for their powerful trading platforms and tools. The margin rates offered by Webull are competitive as well. When we talk about commission free trading, this indicates that Webull does not charge for trades; however, they do pass through transaction fees that are charged by the Securities and Exchange Commission (SEC) as well as various exchange and regulatory fees, which are typically pennies or fractions of pennies per contract.8 Webull’s costs are as follows:
• There are no commissions charged for equity, ETF, or OTCBB trades made through the web platform.
• There are no commissions on options that are exchange traded
• There are no fees associated with exchanging cryptocurrencies.
• Leverage and short sales can both make use of margin, and the rates for margin use are determined by the size of the account. 6.99% on the first $25,000, 6.49% on the next $100,000, 5.99% on the next $250,000, 5.49% on the next $500,000, 4.99% on the next $1,000,000, 4.49% on the next $3,000,000, and 3.99% on everything beyond that.8
• Money transfers: ACH deposits and withdrawals are free of charge; wire transfers cost $8 for deposits in the United States and $12.5 if they are made internationally; wire transfers cost $25 for withdrawals in the United States and $40 if they are made internationally.
• There are fees associated with paper statements, including confirmations at a rate of $2 for each confirm, account statements at a rate of $5 for each statement, and a prospectus cost of $2.5 each mailing.
How this Broker Will Make Money for You While Also Making Money Off of You
Understanding how brokerage companies generate income has gotten increasingly difficult as the industry races toward eliminating the need for commissions on trades. Webull does not feel any shame in explaining to potential investors how they generate revenue, which enables them to offer a sophisticated platform with no transaction fees.
• Payment From Order Flow: Webull is clearly all-in on the continuing race towards no commission trading – even options are now free to trade on Webull – and they are very transparent in stating at the top of its pricing page that PFOF is the primary reason they can offer no commission trading and no fees for access to their well-built platforms. This is because PFOF allows them to generate revenue from the volume of orders that pass through their system. Webull is compensated an average of $0.01088 per share for its order flow and $0.55 each options contract on average. The figure for options is around average, while the one for stocks is, as was to be expected, among the highest for all assessed brokers.
• Interest on Cash Despite the fact that the company does not pay interest on cash balances, Webull is able to create income from the cash that is held in the accounts of its traders. This is a significant source of revenue for the company. When you have cash in your account, Webull will keep the interest that it generates and add it to its own profits.
• Stock Lending Program: Webull does in fact provide a stock lending programme, under which the investor who lends the shares is entitled to a portion of the money generated by the programme. The amount of interest that will be paid out through the loan programme is entirely contingent upon the demand that the market has for your securities.
Facilities for Account Management and Research
For the purpose of assisting traders in making educated investment decisions and locating stocks to trade, Webull provides a comprehensive range of account information and research amenities. These amenities include fundamental data, news, and charting. However, Webull does not give the types of tools and information that are offered by full-service brokers. These tools and information include things like daily market data, individual analyst reports, and in-depth research tools for portfolios.
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. You can then bring up the payout graph at maturity for the strategy, and use tools to further customize the strategy through different order types or adjusting the width between strike prices 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. Mobile app charting is a bit different than on the web and workstation because of the smaller screen size, but it is very intuitive. Order tickets and alerts can be created directly from charts, and analysis like Bollinger Bands®, simple and exponential moving averages (SMA/EMA), relative strength index (RSI), average trading range (ATR), multiple stochastics variations, and other commonly used analysis can be easily added to a chart. In addition, the company recently added more granularity to the charting capabilities, with charting intervals of 1, 5 and 30 seconds now available. It seems odd, though, that neither the 50, 100, or 200-period MA was included in the set of six defaults in the program.
Charting on both platforms boast a magnet feature that makes it easy to put trend lines at the exact high or low for a chosen date. Charts show open orders and cost basis information if applicable, and the mobile app charting also has a helpful set of buttons to show the trader if the stock is marginable or shortable, with the corresponding leverage multipliers. Webull’s charting tool should work well for the majority of traders who utilize charts to supplement investment/trading decisions and help determine their trade timing, as well as entry and exit points.
Those looking for customizable program trading, pattern recognition, more sophisticated market analysis and charting techniques would likely use different software, but these traders should know that Webull does not currently provide an API to let third-party charting programs access its price data.
Tools and Calculators
Webull does not offer financial calculators or related tools, in contrast to the robust suite found at full-service brokers. There is no in-depth portfolio analysis, no automated rebalancing, and none of the general portfolio management tools standard at the larger online brokers.
Trading Idea Generators
Webull does not offer an automated idea generator, although there are several stock breakdown lists to see things like most active, biggest movers, an earnings calendar, heat maps, and sector/industry breakdowns to identify opportunities.
News
The news provided free to all clients is the Benzinga Newswire, which works as a basic scrolling window with headline news and business stories, and information on economic releases. Stories can be pulled up by clicking on the news line of interest. The news screen will be specific to the stock selected for analysis within the stocks tab.
Third-Party Research
Webull does not offer third-party research, but they do offer a breakdown of ratings from multiple analyst ratings in a very clean and easy to use graphics.
Fractional Dividend Reinvestment Plan (DRIP)
Webull does not currently have a dividend reinvestment plan, although it has added fractional share capabilities. The company states that this may be added in the future.
Cash Management
There is no cash management associated with trader accounts at Webull. Foregoing interest on cash balances is a concession Webull takes in order to offer a free platform and no commission trading.
SRI/ESG Research Amenities
Webull does not offer the ability to screen or search stocks or ETFs for socially responsible investing (SRI) or environmental, social, and governance (ESG) factors.
Portfolio Analysis
Webull does not offer a broad suite of portfolio analysis tools, but it does provide what most self-directed investors need. This includes account performance metrics on the account page as well as the ability to download tax forms, account statements, and confirmations through the web or desktop platforms. The reports and information available are all in real-time, and include realized/unrealized gains/losses, gains/losses net of deposits and withdrawals, income from dividends and interest, unrealized long-term and short-term capital gains, and the internal rate of return (IRR) as well as information on margin and buying power.
Education
Webull’s Learning Center does not provide investor education about portfolio management and trading, so Webull traders are pretty much on their own when it comes to learning how to manage an account and trade. Instead, Webull provides a series of instructional material, primarily using text and screenshots, on how to use Webull’s platforms and features. There are sections that introduce workstation, cover frequently used features, show how to customize layouts, and highlight the trading tools available.
While traders can review their order history, Webull does not offer a dedicated trading journal. It is also no surprise that a free platform at a zero commission broker does not offer sophisticated back testing of strategies. While Webull offers a paper trading feature to help familiarize traders with how to place orders and trade, the features are very limited. Unlike trading on the actual platform, for example, you can’t enter a limit order with conditional stop loss and profit taking orders. Furthermore, there is no options trading available through Webull’s paper trading. Because of this, you may not be able to simulate what you would actually be doing in the market. That said, the paper trading feature fulfills its purpose of getting a new trader comfortable with the platform and the basics of order entry.
Customer Service
Webull’s narrow focus on younger, tech-savvy, self-directed customers primarily interested in the no-cost opportunity for trading results in a sparse customer support offering. Webull does not have financial advisors, but its customers can speak with a live broker if they are willing to wait on the phone – Webull’s average hold time is more than two hours.
- Phone available during trading hours only.
- Online chat with a live agent during business hours.
Security and Reliability
- Two-factor authentication is available on all platforms.
- Mobile offers biometric logon as an option by fingerprint or facial recognition.
- There is a separate six digit numerical passcode for trading access, adding an additional layer of protection.
- Webull did not have any serious platform outages
- Webull has not had a data breach.
- Webull goes beyond the Securities Investor Protection Corporation (SIPC) protection of $500 thousand ($250 thousand of cash) by having purchased an additional insurance policy providing an aggregate amount of $150 million of protection, with maximum limits per individual of $37.5 million ($900 million in cash) for losses suffered unrelated to account losses related to value of securities.
Transparency
Webull’s pricing is very straight-forward and fully disclosed.8 The company is completely open in the second paragraph of its pricing page, accompanied with a link to their SEC rule 606 disclosure, that payment for order flow (PFOF) is the primary generator of revenue allowing users on its platform to trade commission free. Other fees are listed clearly on the website’s well marked pricing page. Webull explains how they pass through SEC, exchange, and regulatory fees that are typically fractions of a penny per volume traded.
Webull’s tiered margin rates and associated buying power are clearly displayed on the pricing page, but it was not as easy to find disclosures related to the risks of margin trading on the website. Webull does, however, provide a helpful account risk measure that visually informs a trader if they are at greater risk for a margin call.
Webull has taken an interesting approach with its honesty about payment for order flow being key to its free business model. Unlike some other brokers that have buried it in the fine print, the company is essentially telling clients upfront that they can have a free platform or no payment for order flow, but not both.
Available Account Types
Webull offers a cash and margin account for individuals, both taxable. The difference between these accounts is that the cash account is solely cash transactions, meaning you have to put money into the account and then purchase the assets. The margin account is available only once your account value is at or above $2000, and allows for you to borrow against your portfolio to buy more assets. Beyond the two individual taxable accounts, Webull also supports:
- Traditional individual retirement account (IRA)
- Roth IRA
- Rollover IRA3
Final Verdict
Webull is a great deal for the trader or active investor that doesn’t need hand holding. There is no minimum account size, the margin rates are competitive, there are zero commissions on stocks, ETFs, options, and cryptocurrencies. Moreover, you get access to well-designed and intuitive trading platforms for the desktop and mobile devices providing helpful trading tools at no extra cost. While full service brokerage firms like Charles Schwab also offer commission free trading in stocks and ETFs now, their $0.65 commission per option contract and higher margin rates makes Webull an appealing alternative for margin users and active option traders who may otherwise find Webull’s options trading tools somewhat lacking (but still functional).
With technology providing acceptable fills on limit and other order types, most traders will be satisfied with Webull. That said, NASDAQ Level 2 quotes will not be enough to entice serious day traders who want the best price execution or full control over how their orders are routed. Investors looking for a full service broker with financial planning services and tools will have to look elsewhere, as will traders with strategies that rely heavily on execution speed and quality. Webull is for the self-directed trader who wants to keep costs down as much as possible.
Webull is designed for investors who are interested in entering the financial markets without being required to maintain a minimum account size and without incurring trading commissions. Because Webull is not a full-service broker, its clients are required to handle certain facets of portfolio management on their own. This necessitates some level of do-it-yourself work. Customers of Webull have a tendency to be younger than those of other brokerage companies. Active traders are also likely to be interested in the no-cost approach offered by the broker. Because other brokers, even those that have moved to commission-free stock and ETF trades like Schwab, continue to charge commission on each leg of options trades, active options traders will be particularly interested in Webull’s free options trading. This is because other brokers continue to charge commission on options trades.
