Investing Simple Logo
Get 1 Free Stock Worth Up To $200 From Robinhood!
Sign up with Robinhood, deposit any amount and get 1 Free Stock. It takes less than 3 minutes to sign up and claim your Free Stock Bonus.
Earn 5.00% APY with M1 High-Yield Savings Account
M1 Plus members can earn 5.00% APY on their deposits with no minimum balance required.
Webull free stock promotion
Get Up To 5 Free Stocks From Webull
Open a new Webull brokerage account today and deposit any amount of money to receive 5 free stocks. Webull offers commission free stock, ETF, option and crypto trading.
Written by Cari Scribner on December 20, 2021
FTC Disclosure: Some of the links on this site are affiliate links. Read our full disclaimer here.

How Does Webull Margin Work For Beginners?

In a nutshell, margin trading means buying securities with borrowed money.

As you can imagine, this can be very risky as you are liable to lose not only your money but Webull's money as well.

While the trading platform Webull does allow margin trading, there are a number of important details you should be aware of before getting started.

New to Webull? Check out my full tutorial below!

What Are Margin Accounts?

Margin accounts let you borrow money against the value of the securities in your account.

It allows you to access increased funds without having to sell off all the assets in your current portfolio.

It’s vital to remember that when you use a margin account, you open the door for both major profits and huge losses. This is because it’s possible to lose not only the value of the securities in your cash account, but also the funds you borrowed.

If you start to show losses that are greater than the limit set by the broker, this can lead to a margin call. When this happens, the brokerage platform can force the sale of securities or other assets in your account. The firm can also sell your securities or other assets without contacting you. You are not entitled to a time extension while in a margin call.

You will also pay interest on your margin account. However, margin interest is only charged for leveraged positions held overnight.

Learn More: Robinhood Retirement 3% Match

Robinhood is a popular "all-in-one" investing app.

While they are most well-known for their commission free stock trading, they've recently shaken up the Retirement Investing World too.

Introducing Robinhood Retirement; home of the biggest IRA match on the market.

Robinhood IRA Boost

Here's what you need to know:

  • Robinhood offers 2 types of retirement accounts - the Roth IRA and Traditional IRA
  • All Robinhood investors will get a 1% Match on what they Contribute or Transfer
  • Robinhood Gold members will get a 3% Match - the biggest on the market

And don't worry, this comes with a Portfolio Builder Tool. You don't have to construct your investment portfolio from scratch if you don't want to.

Lastly, you'll even get a free stock worth up to $200 when you open a new Robinhood account using our link.

Best Free Stock Promotions

Robinhood Logo1 Free Fractional Share Worth Up To $200Learn More
Webull LogoEarn Up To 75 Free Fractional SharesLearn More
Moomoo Logo5 Free Stocks When You Deposit $100+Learn More
Acorns Logo$20 Bonus When You Invest $5+Learn More

Margin vs Cash Accounts

Cash accounts allow you to day trade with money you have readily available. For example, if you have $1,000 settled in a cash account, you can only use up to the amount of $1,000 for trades, not a penny more.

Margin accounts allow you to borrow money against the value of the securities in your account. For example, if you have $2,500 in a margin account, you could use additional margin funds of up to $7,500 supplied by Webull, to purchase $10,000 worth of stock. 

It provides the opportunity to leverage your investment to potentially increase your return. At the same time, it presents the risk of magnifying your losses.

What Is Webull?

Webull is a commission-free stock and ETF trading platform that was launched in 2017. Today, it has nearly 10 million users across the U.S. and around the globe.

When you sign up to buy and sell stocks on Webull, you will not be charged any commission. There are also no minimum account requirements or account maintenance fees, making Webull one of the lowest cost brokers out there today.

Webull Account Types

  • Individual Cash (Taxable & Retirement)
  • Individual Margin

A Webull individual margin account allows you to borrow and trade up to 3 times your account equity.

For example, if you have $2,500 in a margin account, you could use additional margin funds of up to $7,500 supplied by Webull, to purchase $10,000 worth of stock.

However, there are account minimums and you will pay interest on all your trades on margin. Keep in mind, margin trading is high risk and not something we recommend. Only take on margin if you fully understand the risks involved.

Webull Margin Requirements

  • You must have at least $2,000 to qualify
  • Interest on margin trading is calculated on a daily basis and paid on a monthly basis
  • The margin rate is variable and is determined by the size of the margin loan

What Are The Risks Of Margin Trading?

It's important to understand the potential risks associated with margin trading before you consider taking this step.

Margin trading can make you or break you! It can enhance losses as well as gains. If you plan to use margin, make sure you understand the risks and always monitor your accounts carefully.

Some of the risks of margin trading include:

  • Greater potential risk of loss from your increased leverage
  • You will pay additional costs from margin interest charges
  • Potential margin calls for liquidation of your portfolio of securities

This type of trading is designed for experienced, active day traders who buy and sell securities multiple times in day.

Not For Passive Investing

On the Webull platform -  or any other financial app for that matter – buying on margin is not recommended for people who are new to the financial arena and looking for a longer-term, passive income strategy.

If the stocks and options you add to your portfolio on margin start to decline in value, you can lose all of the borrowed money. Also, you can be forced to sell some or all of the securities you own to pay back the loss.

Remember: stock prices can go up and down unpredictably!

Use Webull Margin Accounts With Care

Margin trading on Webull, as with any other platform, can be tempting but must always be used carefully. All traders know one of the most important things to do is protect their asset, and trading on margin leaves them vulnerable.

However, if you have done your research, you should now have a good overview of how margin trading works on the commission-free trading app Webull.

Article written by Cari Scribner

Read more

Power Your Investing

Choosing the right product and service is essential for your investing. Here are some of the tools and services to help your portfolio grow.
Robinhood provides an easy-to-use free trading platform for beginner investors. Robinhood has $0 account minimums. Get a free stock when you open an account below.
Try Robinhood
M1 Finance
M1 Finance offers a free investing platform where users can build portfolios of stocks and ETFs. Users can also choose from a variety of pre-built portfolios offered for free.
Try M1 Finance
Passively invest in private real estate deals with as little as $10. Fundrise allows you to own residential and commercial real estate across the U.S. starting at a 1% annual fee.
Try Fundrise
Copyright © 2018 – 2024 Investing Simple LLC. All Rights Reserved.
Investing Simple is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. Investing Simple has advertising relationships with some of the offers listed on this website. The information on Investing Simple could be different from what you find when visiting a third-party website. All products are presented without warranty. For more information, please read our full disclaimer.
Website managed by Stallion Cognitive™

Get 1 Free Stock Worth Up To $200 From Robinhood!

Don't Miss This Opportunity!

Investing Simple readers can claim a free stock from Robinhood worth up to $200 when they open a brokerage account and deposit any amount.

For US Residents only. Investing Simple is affiliated with Robinhood, and we may earn a commission when you sign up for Robinhood.

linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram