Many investors have stumbled upon Webull, which is a top trading platform for stocks, ETFs, and options. The platform was designed for intermediate and advanced traders as it comes packed full of charting tools and research capabilities.
With its feature rich platform, active traders may wonder if Webull is set up for day trading.
The short answer is yes, you can day trade on Webull. But there are many things you need to know about day trading, both on Webull or any other trading platform, before you jump in.
Webull is a popular commission-free stock and ETF trading platform.
Financial pros designed Webull for people who are active traders looking for a more dynamic user experience than many competing free platforms are offering. This platform has features that are valuable for traders including technical indicators, research agency ratings, financial calendars and more.
Webull pros include easy access to margin, research tools and live data, making it an ideal platform for active traders. For example, the research and data findings are clear and easy to follow, even for novices to the financial field.
Despite the fact that there is so much information and data packed into this app, Webull still maintains an excellent user interface. The app itself has a great design and it is very easy to navigate.
However, remember that Webull was not designed for long-term passive investors. Instead, it’s for those who are actively trading.
Let’s take a closer look at day trading, and then review what Webull offers day traders.
Be sure to check out our full Webull review for more.
Day trading is a strategy among active investors who buy and sell stocks and ETFs within the same day, or even repeated times over the course of a single day.
First off, we need to tell you day trading is extremely risky! It’s a strategy that needs to be based on something other than intuition or “feeling lucky” on any given day.
Day trading is a short-term strategy that investors use with a goal of making profits from small fluctuations in market prices on specific stocks and ETFs.
Basically, it is the polar opposite of a longer-term strategy that’s based on historical movement of the market, how a particular stock has fared, and how certain companies are growing (or decreasing) in stock value.
Most investors rely on long-term plans and consistently study market ups and downs to get an overall picture of what may be a good move on their part.
Day traders ride the roller coaster! They constantly monitor even the smallest price moves in their investments and leap when they see an opportunity to buy and sell. Yes, it can be lucrative for many, but it’s also an easy way to lose your shirt.
It can literally implode your portfolio if you do not have the experience and carefully drafted strategy learned over time.
If you’ve given it due thought and want to venture into day trading, you can do this on Webull.
One of the pros of day trading on Webull is your cross-platform access to the market. You can day trade on your phone and check the results on your computer and pad.
Day traders do not sit idly and check in with their positions on a casual basis. Instead, they are on constant watch for tiny fluctuations in stock prices.
Another thing you need to know is Webull’s margin rates, which are as low as $3.99%. The rate you receive depends on your account balance.
The key factor is experience and emotionless trading!
This is something you can’t learn overnight. Therefore, if you’re a newbie, it’s an enormous risk (and probably a bad move) to get involved in day trading.
Day trading also requires a large amount of capital. You legally need a minimum of $25,000 to start day trading stocks in the US. Otherwise, you are subject to pattern day trader rules.
A pattern day trader (PDT) is an investor who executes four or more day trades in the span of five business days in a margin account,
These traders are subject to special rules. The main rule is that in order to engage in pattern day trading, you must maintain an equity balance of at least $25,000 in a margin account. The required minimum equity must be in the account before you begin any day trading activities.
In other words, if you have less than $25,000 in your account, you can get a penalty for excessive trading. Excessive trading is more than 3 day trades per week. You can make 3 day trades in a 5 business day window, but if you make a 4th you will be flagged as a PDT.
This usually starts out with a warning, but could lead to a suspension placed on your account.
In the case of Webull, they prevent you from placing excessive trades.
Margin trading is an option for day traders. This is when investors use borrowed funds to make trades. It will let you use the current cash or your securities in your account as collateral for this loan.
Loosely translated, this means individual investors buy more stocks than they can afford to with their available capital.
In order to trade with a margin account, you are required to have at least $2,000 upfront in cash, which is called the minimum margin. This would help the trading platforms like Webull to recover some money if your day trading does not pay off and the market closes leaving you with a loss.
Webull offers traders up to 4x your buying power. Suppose you have $5,000. You could use margin and increase your buying power to $20,000.
When you open a margin account with Webull, the number of day trades you are allowed to make is based on the net value of your trading portfolio.
For example, if you have at least $25,000 in net account value, you will have unlimited day trades.
However if your margin account has less than $25,000 in net value, Webull will limit you to day trade just 3 times every 5 business days. The number of day trades you have initiated through Webull will be tracked and shown in a “Day Trades Left” pop-up.
Webull will open the door to let you day trade, and offers competitive margin rates.
If you want to make unlimited day trades, you will need at least $25,000 in net account value.
If not, you will be limited to just 3 day trades per 5 business days.
Before deciding whether or not to day trade on Webull, it's important to think about your goals. Day trading is very risky and requires substantial discipline to succeed. While the Webull platform does support day trading, you may be better served with taking a longer-term approach to investing.