Everyone should be able to build wealth. Understanding the risks and learning the basics of investment is a great way to build a prosperous financial future.
Until recently, it was difficult to trade or invest in stocks without having to pay commissions that eat into your profits.
There are now many brokers that offer zero commissions, making investing more affordable. Webull is a great alternative to Robinhood for many.
It’s important to admit that, when it comes to building wealth, I prefer to invest rather than trade. This doesn’t mean you have to hold onto your long positions for the duration of the trade.
It is not a good idea to leave positions on autopilot. Margin trading is something I detest. I’ve seen friends lose their businesses due to paying exorbitant rates of interest.
Table of Contents
What is Webull?
Open a Webull account to get started
Webull: Pros and Cons of the Use of Webull
Webull’s Offerings
The Use of Fundamental Analysis Tools Could Be Better
2021 Cons of Using Webull
Webull Can Do Better
Webull is best for whom?
Final Thoughts
What is Webull?
Webull, a relative novice in the online trading world that is attractive to young traders, has entered a competitive market. I am pleased to see the increase in participation of young retail investors in the markets. Webull is a mobile broker that offers online trading without commissions.
Webull’s mobile trading platform is aimed at traders with some experience in the financial markets and who are looking for advanced features such as real-time and detailed market data.
By constantly improving the tools that they provide to their subscribers, they are a legitimate online trading player.
Webull Background
Webull, founded in 2017, will have about 15,000,000 registered users by early 2021. This is a higher customer acceptance than Robinhood, despite its lower profile. It is impossible to avoid comparisons with Robinhood. Webull users switched to Webull when Robinhood temporarily halted its trading during the GameStop frenzy.
Webull’s customer base is rapidly growing, which could explain the rough start that I will share below.
Webull Trading Platform
Open a Webull account to get started
It is easy to create a Webull Account. Sign up using your email or mobile number. You will receive a code of verification. Select your preferred brokerage account. Choose between a margin or cash account.
Then, you can add your personal details, create a profile and answer questions about security and regulatory issues. Upload your ID using either a passport or state issued ID card. Identification can be provided by both sides of the driver’s licence.
Webull offers free stocks (ranging from $5 to $250) with a deposit of $100. I received two free shares. To fund your WeBull Account with an ACH Bank Transfer, you will need to be linked to a bank. There is technically no minimum deposit unless you open a margin account which requires a minimum of $2,000 to be deposited.
They will deposit two small amounts (like $0.09 or $0.33) in your bank account before they transfer the money to your Webull Account. Webull confirms the amounts deposited. The posting is delayed by 24 hours. I discovered the deposits on day two and tried to inform Webull many times.
What I experienced – A Unnecessary Delayed
I contacted customer service via email and phone. Every time I called I was put on hold for between 45-60 minutes. Come on guys! Doug was my customer service person and he was always the same. I wondered if it was just one person.
Doug was very friendly and apologetic. He also couldn’t figure out why my deposit verification didn’t work, which held back my trading account funding.
It took me days to set up my account. Finally, the tech support team intervened and fixed my account. It was because I signed up using an email address instead of a mobile app. But that shouldn’t have made a difference. Although I understand that the site is mobile-oriented and some people still prefer larger screens, it’s not surprising.
Webull was busy signing up new customers when the delay occurred. During the GameStop frenzy volumes increased and some Robinhood customers left when trading in certain stocks halted. Since then, I’ve learned that Doug is not alone as they are now adding more people to the customer service team.
Payment for Order Flow and Retail Trading
Webull is required to disclose that it uses “payment for flow” in its practice. Webull, Robinhood and many other small brokers are compensated for sending orders to market-makers for the execution of equity and option trades.
Zero-commission trading allows brokers to save money and improve their ability to deal with high volumes of orders.
As more people open trading accounts, the volume of stock and option trades has exploded. Many small brokers were overwhelmed by this activity. The daily average volume of equities grew from 7 billion dollars in 2019 to 14,7 billion dollars in early 2021.
Retail trading is responsible for a huge volume increase, as evidenced by the higher proportion of routes going to market makers.
Webull: Pros and Cons of the Use of Webull
No Fees Or Minimum Deposit
Webull offers free stock trading without a minimum requirement, but $100 is required to get yours. The zero commissions apply to all day trades, options trades (no charges per trade or contract), and other securities that they offer. No annual fees or charges are charged for inactivity.
You will be charged $75 to close your account or transfer your Webull.
Stocks for Free
Webull offers continuous promotions that offer free shares valued between $5 and $250 per share when you deposit $100 into your account. You are unlikely to receive a high-priced free stock. I received two shares: an AMC stock valued at $8, and a Southwestern Energy share valued $4.38.
Tradeable Securities
There are still some restrictions. Diversification can be achieved by selecting from hundreds of ETFs. Webull offers extended trading hours for pre-market (4:00am – 9:45am) and after hours (4:00pm – 8:08pm). The fact that you can does not mean you should, as the markets are volatile and have less liquidity.
Webull’s Offerings
Stocks
You can find out more about the options by clicking here.
ETFs
Gold
Cryptocurrency
ADRs are American Depository Receipts.
Webull offers a variety of IRAs, including traditional IRAs, Roth IRAs, and Rollover IRAs. According to their website, “more IRAs will be available soon.” They do not currently offer bonds, money markets or mutual funds. This is a big hole for those looking to diversify.
Easy-To-Use Customizable Dashboard
The dashboard is filled with 45 widgets or more to meet simple and complex needs. The company continuously improves its dashboard, allowing traders to analyze market trends and information to provide a better user experience. The trading panel can be customized to suit the investment strategy of each client.
Stock Charts
Stock charts are available in a variety of formats, from simple to complex. Prices can be displayed using Moving Averages (MA), line, bar charts, Candlesticks or Hollow Candles. Heiken Ashi and Colored Bars are also available. You can manipulate two charts, and compare them. I tend to focus more on the fundamentals than charts but I do plan to improve this skill.
Stock Screens
Webull offers the usual stock screens, such as top gainers and most active stocks, actual and estimated stock earnings, dividends and splits, and advances/declines. Customers can search for markets by location, including US, Hong Kong and London. They can also look at all the major global markets. These screens were easy to use, and they all fit on one page.
You can filter by market, industry, and capitalization. A neat IPO center shows activity on the primary market. There is no SPAC center on the dashboard, but I’m sure it will be added soon if interest is shown.
The Use of Fundamental Analysis Tools Could Be Better
Fundamental analysis tools are available to investors that many may find rudimentary. My first experience of the market was via a Quotron. I remember a librarian reading news from a teleprompter, including earnings results, dividend increases, management changes and other information.
Webull’s current fundamental analysis tools are available to customers and include financial statements, earnings estimates, analyst ratings, short interests, institutional holdings, ETFs, order flows, and more. This information is useful when I make purchase decisions. It helps me to identify changes in market sentiment.
Fundamental investors require more tools. Download SEC documents, research reports and other materials from Thomson Reuters and Ned Davis.
Technical Indicators
There are several tools on the site to help more experienced traders. Webull provides capital flow analysis to show inflows and outflows in the market. These indicators indicate money flowing into a particular stock or sector. Among technical indicators are Simple Moving Average (SMA), Exponential Moving Average (EMA), Bollinger bands, MACD and Volume.
Trading Level I and Level II
Stock trading uses two different trading screens, Level I and II. These screens give traders direct access to market data in real time, including the daily high and low prices, current bid and offer price, as well as the most recent trading price.
Webull offers traders Level 1 trading information that shows all current “bid and Ask” orders, as well as buys and sells.
The NASDAQ order book is essentially NASDAQ’s market data. The number of buyers at various price levels is shown.
Webull provides Level II trading free for three month and then $1.99 a month when you open a new account. Robinhood offers this service for free to its Gold members, who pay $5 a month.
Webull also offers paid subscriptions for data premium from regional markets such as Hong Kong Stock Exchange (HSE), Toronto Stock Exchange (TSX), and London Stock Exchange.
Trading Platform
Webull’s trading platform is praised and admired for being available in mobile and desktop formats. The desktop platform can be accessed via a browser or downloaded and includes advanced charts, screeners and many technical indicators.
The platform has many advanced features that traders will find appealing. You can create watch lists, price notifications, and voice commands.
Margin Trading Available
Margin trading is not for me, especially when it comes to young traders who are untrained. Margin trading is not available to those who are less mature or unable to handle its risks. You must have at least $2,000 on your account to qualify for margin trading.
Webull’s stated margin rates appear to be comparable with those of other providers. The rates vary depending on the size of the margin loan. Rates vary depending on the size of the margin loan.
The interest on margin is calculated daily, and paid every month. Brokers often change margin requirements or increase rates when the market becomes volatile.
Short Selling
Investors or traders who sell short take a position short instead of buying a stock long. You must borrow shares to take a short position and pay margin interest. The fee charged for borrowing the stock is what determines the cost of a short-sale. Webull charges a fee that changes daily for each stock available.
The risks of margin and short selling cannot be overstated. Brokers can increase their margin or leverage requirements when markets are volatile.
Security and Safety
It is important to invest your money in a safe and secure online trading platform. Webull is regulated both by the SEC & FINRA. SIPC will cover up to $5000 per account and $250,000 in cash for members.
Security features like two-factor authentication and encryption of passwords and personal information are important. You must also create two separate passwords to use for different functions.
Users should take steps to protect their accounts as much as possible.
Virtual Trading and Competitions
You can use their tools to do paper or virtual trading without having to deposit any money when you first open your account. This feature is ideal for beginners who wish to get comfortable and practice with the website.
Robinhood doesn’t have any simulated trading, as far as I am aware. This feature was appealing to me because I have students play simulated stock market simulations in my classroom to learn how to trade and invest stocks.
There’s even more. Webull offers Paper Trading Competitions that encourage participants by offering prizes of up to $300 to those who have a positive return each week.
The simulation is the perfect way to introduce new traders to trading.
Cons of Webull
Investment Limits
Webull has some gaps, including mutual funds, OTC stock, and bonds. Since 2019, they have steadily built their product line, currently offering cryptocurrency trading and options. They do not yet offer pink sheets or fractional shares, which I hope will never happen.
Webull offers the ability to open an IRA on their platform. They will still need mutual funds to diversify their accounts.
Cash Management
Webull does not pay interest on cash that isn’t invested or has a bank partner to manage this option. Robinhood offers interest on idle funds, and Reddit comments indicate that many users choose to stay with the company because of this.
Webull needs to purchase this product as soon as rates start rising.
You Prefer Better Education Support
It is vital to provide educational support to the young investors who have joined firms such as WeBull since the March Lockdown to begin trading. WeBull’s education material is woefully lacking, especially for advanced trading. Financial world needs more academic support.
You may come across many financial terms and concepts when trading or investing.
Needs Better Customer Support
Although I am sure that it was not just me, I have a feeling I may not be alone. The minimum wait time was 45 minutes and could go up to 109 minutes when I called customer service. (Yes, I counted!)
This is unacceptable. Especially when I tried to transfer the money that had been transferred from my bank into my account. I was persistent but others may have given up.
On one of my long waits I looked up Webull on the internet and found that they had a “F” rating with the Better Business Bureau (BBB) along with many complaints.
When I checked the BBB ratings of several brokers, I was not surprised to see that they all have F grades. This includes Robinhood and Fidelity. TD Ameritrade is an exception with an A-minus.
When I do manage to get through to a person at WeBull customer service, the staff is patient and helpful. They need more live customer service.
Webull Can Do Better
Webull continues to expand their product line, but they need to add more mutual funds, bonds and fractional shares.
It would be a good idea to partner with a local bank and offer an interest rate on cash that is sitting idle.
Webull should improve customer service for issues that are not explained, such as my experience or educational materials.
Webull is best for whom?
Webull offers a paper trading option for beginners who may not be ready to invest in their first trade. The platform is most suitable for intermediate traders who are looking for simplicity or want to do more advanced trading. I use Webull to trade and invest separately from my financial advisor or other accounts.
WeBull is not a platform for full-time day traders. They require a system that is far more sophisticated.
Final Thoughts
Webull has emerged as a viable competitor and alternative to Robinhood. Its customer base is growing to the point where it could be the number two online broker for retail traders. This relative newcomer to the world of zero-commission trading online is constantly expanding its product line in order to satisfy customers and leverage their trading platform.
This article was originally published on Wealth of Geeks. It has been republished by permission.
