How Webull Makes Money

Webull is an exciting, promising commission-free stock trading app that launched in May of 2018. Commission-free trading platforms paved the path, and Webull saw an opportunity to offer users a more robust trading platform, making this a platform that should rise to the front of the pack. Webull picks up where other platforms fall short in terms of the features and data available to traders.

Here is our full review of the Webull investing app!

At the end of the day, when you are comparing these free trading platforms, what sets them apart are the features offered. Some of the unique features of Webull are a built-in stock trading simulator, commission free short selling, free extended hours trading, and access to a lot more data and research tools. This makes for an ideal platform for active traders.

Webull FREE stock promotion: If you sign up via our link, you will get a free stock! You just have to open and fund the account with $100.

1. Paid Subscriptions

One of these avenues is offering paid subscriptions for market quotations. These paid subscriptions are called Webull Global Market Data. This is significant if you are looking for real-time global market data.

For example, if you wanted access to TST Level-1 you would pay them $4.99 a month or $53.99 a year. If you’re a trader looking for better features and up-to-the-minute prices, you might want to sign up for this.

2. Margin Fees

Webull offers trading on margin on its platform. In the stock market, margin trading happens when individual investors buy more stocks than they can afford. They do this by borrowing money from a broker to make investments. When an investor uses margin to buy or sell securities, he pays for them using a combination of his own funds and borrowed money from a broker.

Webull charges fees to trade on margin beginning at 3.99 percent. This is another way Webull makes money, but again, it’s not likely to break your bank.

3. Interest On Cash

Webull will make a small margin on any idle cash held in accounts across the platform. The cash is invested in short-term funds or money market accounts in order to capitalize on cash not being put to use. It may seem like a small amount to gain for Webull, but investing tiny amounts of cash across all their accounts can add up to a significant amount of interest over time.

4. Order Flow

Many free brokerages such as Webull make money by selling order flow. Order flow or transaction flow happens when someone believes the price of a security will move, and then decides to execute an order (transaction) in the market. Webull earns a fraction of a cent for every trade placed, and while this may not seem significant, in a robust trading platform, it quickly adds up.

5. Short Seller Fees

By lending shares out to short sellers, Webull can set fees for the process.

Short selling is when investors sell stocks they don’t own. Short sellers believe the price of the stock will fall, or want to hedge against potential price volatility in securities they already own.

If the price of the stock drops, short sellers buy the stock at the lower price and make a profit. If the price of the stock rises, short sellers will unfortunately incur a loss.

The cost for a short sale is the fee for borrowing the stock. The fee charged by Webull changes every day for every available stock, and is charged on a daily basis.  Keep in mind that to short sell on Webull, you need a margin account, and your net account value must be $2,000 or higher.

6. Other Fees

If you’re transferring stocks from Webull to an outside broker, there is a $75 fee for each outgoing transfer. That’s a miniscule fee considering the amount you may be transferring!

It’s important to note that Webull does not benefit financially from security transfers. The outgoing transfer fees are charged by Apex, its clearing firm. Webull does not charge any fees for incoming transfers, but your outgoing broker may charge you for transferring out. We can’t say exactly what that might be, since the specific amount of fees varies by brokers. You will need to check with your outgoing broker for more info.

By being somewhat creative in making a profit, Webull offers an outstanding investment platform, with most features free of charge. It makes investing simple, and hopefully less stressful!

Webull FREE stock promotion: If you sign up via our link, you will get a free stock! You just have to open and fund the account with $100.

Author

Personal Finance Enthusiast, 6-Figure Investor.

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