{"id":2503,"date":"2020-09-29T07:40:11","date_gmt":"2020-09-29T06:40:11","guid":{"rendered":"https:\/\/businessfinancenews.com\/?p=2503"},"modified":"2023-08-22T17:40:53","modified_gmt":"2023-08-22T16:40:53","slug":"webull","status":"publish","type":"post","link":"https:\/\/businessfinancenews.com\/investments\/webull\/","title":{"rendered":"Webull Review"},"content":{"rendered":"\n

Webull Review<\/strong><\/h2>\n\n\n\n

Webull is a Chinese (7<\/a>) fintech company (1<\/a>), regulated by FINRA (4<\/a>), and the Security Exchange Commission (2<\/a>) (3<\/a>). It can be defined as one of the best brokerage services for intermediate and advanced investors (5<\/a>) who require trading without paying commissions and those who focus only on the US markets. Investors can create also demo accounts for free (6<\/a>).<\/p>\n\n\n\n

It is a company dedicated to traders that come from the United States, China, and India. However, it focuses solely on United States trade markets. The most important feature that we can mention in the introduction is that it is a zero-commission brokerage service.<\/p>\n\n\n\n

\"webull\"<\/figure>\n\n\n\n

When we did the test we do of all trading platforms, we must confess that we have been concerned about its Chinese origin, which we have revealed already in 2019 and which gained some virality in the US media in February 2021.<\/p>\n\n\n\n

However, Webull is regulated by the federal agencies FINRA and the SEC, both in the U.S., so we have not been able to verify any factors that might cause us to be distrustful as potential investors, such as lack of transparency, oversight, or scrutiny by any government agency in the EU or the U.S.<\/p>\n\n\n\n

Pros And Cons Of Webull<\/strong><\/h2>\n\n\n\n

Before starting the analysis of this broker in-depth, we usually summarize some pros and cons as an introduction.<\/p>\n\n\n\n

In the pros, we can mention that it has a very good trading platform on the web, in the mobile application, and in the desktop trading platform. Also, it is very easy to open an account being the process fully online. You can also open demo accounts.<\/p>\n\n\n\n

Furthermore, we can distinguish as the most important advantage of this platform that you can trade stocks and ETFs commission-free. Likewise, there are no maintenance fees or inactivity fees of any kind, so no indirect trading fees either.<\/p>\n\n\n\n

Among the cons, however, we can notice that there is very poor customer service and we will go more in detail into this when we reach the paragraph about customer service.<\/p>\n\n\n\n

There is a clear limitation in the available range of products that you can trade with. Furthermore, as with many of its competitors, you can only perform deposits to your Webull account through wire transfers and ACH. Thus, it is not possible to perform this deposit through any sort of electronic wallet, debit card, or credit card at all.<\/p>\n\n\n

\n
\"webull\"
I AM NOT A FAN OF TRADING IN MOBILE APPS, BUT I USE THEM TO CHECK MY POSITIONS AND FOLLOW UP WITH SOME COMPANIES. YOU CAN SET A WATCHLIST EASILY IN WEBULL.<\/figcaption><\/figure><\/div>\n\n\n

Fee Structure On Webull<\/strong><\/h2>\n\n\n\n

More advantages than disadvantages we find in the fee structure of Webull.<\/p>\n\n\n\n

As usual, we study the structure fee making a split between the direct fees and indirect fees.<\/p>\n\n\n\n

The direct trading fees come up when you perform a trading operation. There are many examples and the most typical example is the commission for an operation. There are other direct trading fees that you are obliged to pay that are overnight rates. These overnight rates oblige you to pay if you sustain a leveraged position for more than a trading day: the broker is lending you money.<\/p>\n\n\n\n

On the other hand, the indirect trading fees are fees that are not directly related to the quantity or to the type of operations. Instead, they are related to the contractual relationship you have with the brokerage party. A typical example is the obligation to pay a monthly fee, a fee due to inactivity of the account after a certain amount of time and another example is if you have to pay an annual fee for administrative expenses. An example of a monthly maintenance fee in a broker is the $5 you have to pay per month to maintain The Robinhood Gold<\/a> service. Another example is in banking services when you have to pay a maintenance fee for a secured credit card, with absolute independence of how much you have utilized the credit card.<\/p>\n\n\n\n

Structured Fee Pros <\/strong><\/h3>\n\n\n\n

You do not have to pay commissions for the trade of ETF and stocks that are based in the United States. As part of the indirect trading fees in Webull you are not charged for maintenance fees for fees in virtue of the inactivity of the account<\/p>\n\n\n\n

But there are cons also and we have to mention them.<\/p>\n\n\n\n

Structured Fee Cons<\/strong><\/h3>\n\n\n\n

There is an overnight charge and you incur in this charge when a leveraged position is sustained after more than a trading day. These financing rates are important and depend on a tier based on the volume off your debit balance. It ranges from 4% to 7%. If you have less than $25,000 in your debit balance it will be 7%. If you want to operate in leveraged positions, feel free to do it but know that you have quite a high-interest rate for this.<\/p>\n\n\n\n

There are also fees for the bank transfers that are performed from the bank to your account to utilize the service. As usual it is more expensive for deposits outside the United States than for deposits that are coming inbound from domestic financial institutions. Transaction fee is $8.00.<\/p>\n\n\n\n

We mentioned that there are withdrawal fees for each domestic transfer so if you transfer from your Webull account to your bank there is a withdrawal fee of $25. In this sense, it is exactly like with Tastyworks<\/a> where you also have to pay $25.<\/p>\n\n\n

\n
\"webull<\/figure><\/div>\n\n\n

Account Opening With Webull<\/strong><\/h2>\n\n\n\n

The advantages of opening an account in Webull is that it is done quite fast. Probably it is one of the fastest brokers to open an account. The process is quite straightforward. Likewise, there is no minimum deposit, and this is an advantage because you can really start trading with just a few dollars and you are not obliged to perform a deposit that initially would be a lot of money.<\/p>\n\n\n\n

With that said, let me put clear that the previous statement was for cash accounts. With margin accounts it is different.<\/p>\n\n\n\n

If you are going to do operations with margin accounts, you must introduce a minimum deposit. This margin account requires a minimum of $2000. In the margin account, as you know already, you are performing trading operations with money that you are borrowing from the brokerage service you trade on leverage.<\/p>\n\n\n\n

As was the case with Tastyworks<\/a>, in Webull you can work with cash and margin accounts.<\/p>\n\n\n\n

However, there are a lot of limitations here that you do not suffer from some of the Webull\u00b4s competitors. An example can be Tastyworks because in Webull you cannot open a corporate account, a feature possible in Tastyworks, and is possible in other brokerage services too. Furthermore, you cannot open joint accounts or custodian accounts in Webull.<\/p>\n\n\n\n

Eligibility<\/strong><\/h3>\n\n\n\n

 The major issue that I find in relation to the registration of new customers, is that Webull is accepting only investors based in the United States, India, and in China. This is a great limitation for the opening of international accounts as international investors would be looking for brokerage services elsewhere. In comparison with Tastyworks, the majority of the countries were accepted in the platform but here there is a strong limitation to only those three countries.<\/p>\n\n\n\n

Process To Open New Accounts<\/strong><\/h3>\n\n\n\n

Let\u2019s see now what you have to do in order to open an account with Webull.<\/p>\n\n\n\n

Verification of the account opening is very fast, and it took just a business day. The environment where you can open the account is, as usual, your computer desktop, the application in your cell phone, and the web application. Later on, we will go to these three different environments where you can work with Webull and we will analyze them with a little bit more detail.<\/p>\n\n\n\n

You will see that very often I suggest downloading the client of the brokerage service in this case we bull install it in your computer and operate from there. This is not the exception. I will recommend you to install the desktop application. Go to the menu called \u201cAccount\u201d and where it says Login instead of logging in, you will go to the option of \u201cSign In\u201d.<\/p>\n\n\n\n

As is typical when you register with a brokerage service you must inform some personal data about yourself. You must declare also your Social Security number. If you are employed, you must declare this employment status and because of financial compliance regulations, you are asked to declare which is your knowledge of finance.<\/p>\n\n\n\n

In the same form, you must upload a scanned copy of your passport or any valid identification document that you have depending on the country. These countries are China, India, and the United States.<\/p>\n\n\n\n

To finish the application registration, you must choose the account type. if you want to start with zero deposit you must select the option\u201d Cash account\u201d. Margin accounts are different and here is where you have to perform a deposit of a minimum of $2000.<\/p>\n\n\n\n

Deposits and Withdrawals<\/strong><\/h2>\n\n\n\n

These functionalities are not good at Webull. The investor can only use a wire transfer option the currency utilized is only the dollars of the United States. Also, this bank transfer charges a high fee, and each time you do a deposit you have to pay this fee.<\/p>\n\n\n\n

Let\u2019s see now with some more detail the pros and cons in regard to the process flow of deposits and withdrawals.<\/p>\n\n\n\n

The currency for the operations in Webull is only US dollars. This is a problem for foreign operators because even if you will do an equivalence in your local currency to know how much you are investing, what does not seem a big issue, there is another problem with this that I will explain to you now.<\/p>\n\n\n\n

The problem to work only with one currency is if you are a foreign investor. That is, you are for example from a country that does not use dollars in your bank account.  You will have to perform the payment of a fee for the conversion of the currency from, to put an example the currency from China to the currency of the United States and vice versa.<\/p>\n\n\n\n

But if you anyway want to operate with Webull despite this unfortunate requirement, you can sort this out in the following way.<\/p>\n\n\n\n

You can open in companies like TransferWise or companies like Revolut what is called a multicurrency bank account. Opening this account is very easy and we have studied this in two different articles discussing Revolut and about TransferWise.<\/p>\n\n\n\n

This is a very good option that you have because if you want to operate in dollars and you come from a foreign country, you will open in one of these two companies I have just mentioned you, an account in dollars and you will operate from that account. Therefore, you do not have to pay conversion fees each time you do a deposit or withdraw funds from Webull. You will be, for example doing a withdrawal from Webull to your associated multicurrency account in Revolut.<\/p>\n\n\n\n

Now let\u00b4s continue with the deposit flow. Unluckily with Webull, there is a deposit fee. When we analyzed Degiro, Tastyworks<\/a>, Interactive Brokers<\/a>, and also Robinhood<\/a>, this was all free but here with Webull, you have to pay $8.00 when the wire transfer is coming from a local American bank.<\/p>\n\n\n\n

With Webull, and also with the Webull competitors, you have to associate your bank account with your Webull account before doing any kind of deposit into the account you have just opened. This is very logical and is similar to the situation with Robinhood<\/a>, Firstrade<\/a>, Tastyworks<\/a>, and the other brokerage services. The customers that are residing outside the United States can use only the bank transfer to do these deposits.<\/p>\n\n\n\n

Let\u00b4s talk about withdrawals. About the withdrawal of money from your Webull account to your bank account it takes one day until you can have the funds available in your account. This can be done in just a few clicks from the trading platform.<\/p>\n\n\n\n

To do it, go to the Home menu select the option to withdraw funds, and there select the option Transfer To My Bank\u201d and write down the quantity you want to withdraw and thus, transfer to your account.<\/p>\n\n\n\n

The process begins in the background and you will have to wait one day until the funds appear available in your bank account.<\/p>\n\n\n\n

Webull Negative Cash Balance<\/strong><\/h2>\n\n\n\n

Why is my cash balance negative in Webull? You have a Webull negative cash balance because the deposit that you have performed through wire transfer or ACH is still not settled in your account, thus appearing as a negative cash balance. Before the aforementioned settlement takes place, you are technically operating on credit and with a negative cash balance sign.<\/strong><\/p>\n\n\n\n

After the deposit, your account will be credited with up to one thousand dollars. This can be utilized by the trader to operate. Nevertheless, until the deposit performed via transfer or ACH is settled, you are technically operating through a credit. Because of this “credit”, your account appears with a negative balance. <\/p>\n\n\n\n

The settlement of the deposit takes about five business days. You can see the expected settlement in your account in the “Deposits” module.<\/p>\n\n\n\n

The clearance and settlement process takes a lot of time in Webull. Therefore, you may encounter several days a negative cash balance despite your deposit.<\/p>\n\n\n\n

Your deposit can be through a standard transfer or an ACH, and in both of these cases the delas take several days when we compare them with other trading platforms that we have reviewed here.<\/p>\n\n\n\n

Order Management Inside Webull<\/strong><\/h2>\n\n\n\n

There are several types of orders that you can place.<\/p>\n\n\n\n