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Written by Krysten Zinon on March 20, 2023
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Webull Cash Account Explained In 2023

A cash account is a type of brokerage account that requires investors to pay the full amount for securities purchased.

On the other hand, a margin account allows investors to leverage the funds and securities they already own to purchase additional securities.

In this article, we'll be discussing what a Webull cash account is and the requirements for opening one.

What Is A Webull Cash Account?

Webull offers two types of brokerage accounts, cash account, and margin account.

  • A cash account is best for beginners or those who prefer to avoid the risks of leveraging investments.
  • With a cash account, your money is your buying power, meaning you cannot borrow funds to place trades.
  • You must pay for the full amount of securities purchased upfront.

Requirements For Opening A Webull Cash Account

To open a Webull cash account, you must be at least 18 years old and a US citizen or a legal resident.

  • When you apply to open an account, Webull will ask for certain information that will allow them to confirm your identity.
  • This includes your name, US residential address, date of birth, Taxpayer Identification, which includes your social security number or Individual Taxpayer Identification Number (ITIN), telephone number, citizenship, and other identifying information.
  • To verify your identity, Webull will ask for copies of your driver's license, passport, permanent resident card, state ID, or visa.
  • Invalid forms of ID include, but are not limited to, military IDs, firearm licenses, and insurance cards.
  • Webull may also ask you to provide additional documents if necessary.

Buying Power

The buying power in a cash account is the maximum dollar amount available for placing trades.

In a cash account, your money is your buying power. You cannot borrow funds to place trades.

The buying power for a margin account is different. A margin account allows you to leverage the funds and securities you already own to purchase additional securities.

In turn, you pay interest on the borrowed money, and your securities serve as collateral for the loan.

Settlement Rules (Funds Settled)

In a cash account, you must pay attention to your settled funds and unsettled funds.

  • Settled funds are immediately available as buying power and can be withdrawn.
  • Unsettled funds mostly include cash received from liquidating positions in the last two days.

After it is settled, it becomes settled funds. If you have two or more good-faith violations, unsettled funds will not be available for trading until the closing trade has settled.

In a margin account, trading allows you to use unsettled funds to place trades. Proceeds from the sale of positions will immediately be available as buying power.

Day Trades

For a cash account, there is no limit to the number of day trades you can make with your settled funds.

However, trades placed in a cash account require 2 business days for the funds to fully settle before they can be used to buy and sell again.

Good-faith violations occur when the purchase of a security uses funds that have yet to settle in the account.

So, if you make day trades with a cash account while you do not have enough settled

This article was generated using automation technology, and thoroughly edited and fact-checked by an editor on our editorial staff.

Article written by Krysten Zinon

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