The last ten years of investing will undoubtedly be some for the record books. Besides a few years of remarkable market returns, the equity markets investors have seen some major innovation.
In fact, investing institutions are referring to the past few years as the years of the retail investor. Retail investor is a very loose piece of terminology but is taken to mean those who are not professional investors or represented by professional investing institutions.
The relatively recent innovation in equity markets investing platforms has opened investing opportunities for the retail investor. Investing platforms like Robinhood take credit for the rise of retail investors by creating a simple, beginner-friendly investment platform.
Another platform to join in the rise of the retail investor is Webull. A lot of people are familiar with Webull’s marketing campaign of referring friends to get free stocks. In addition to sweet sign-on bonuses, Webull also helps retail investors invest in their own stocks they like without extreme fees and platform regulation.
To learn more about all of the offerings of Webull, head to our Webull summary article. While this article will cover some of the advantages of using Webull, the main purpose is to cover all of the fees associated with the Webull platform.
According to the official Webull website, there are five main buckets of fees associated with Webull accounts. Each bucket represents unique and different account offerings. While all buckets are commission free, there are still costs associated with trading that will be explored later in this article. The five high-level buckets are listed below.
|1 Free Fractional Share Worth $5 To $200||Claim Bonus|
|6 Free Fractional Shares When You Deposit $1+||Claim Bonus|
|5 Free Stocks When You Deposit $100+||Claim Bonus|
|$20 Bonus When You Invest $5+||Claim Bonus|
First, it is important to understand where each of these fees are coming from. Webull is very clear that all trades on its platform are commission free. However, there are relevant government fees (SEC and FINRA) that can apply to any transaction.
The SEC stands for Security and Exchange Committee. This is an independent government agency that is responsible for protecting fair trades in the equity markets.
FINRA stands for the Financial Industry Regulatory Authority. Unlike the SEC, FINRA is a non-government agency that enforces rules of brokers and broker-dealer firms in the United States.
While Webull is a commission free trading platform, they do pass along fees from the SEC and FINRA. These fees may apply to all sell transactions on the Webull platform. In other words, there is $0 in fees to buy stocks and ETFs on the Webull platform.
The Regulatory Transaction fee rate (charged by the SEC) is 0.00051% of all sale orders (with a minimum of $0.01 fee per transaction). That means that for every $1M in sales, your Regulatory Transaction fee would be $5.10.
The FINRA trading fee rate (charged by FINRA) is charged by a per share basis rather than percent of sale like the SEC. The FINRA trading fee rate is $0.00013 per share (with a minimum of $0.01 fee per transaction and a maximum of $6.49).
Webull states that it does not profit from any of the above fees as these are all regulatory fees passed to the investor.
Unlike many competitors, Webull does not charge any contract fees for stock options trading. Additionally, Webull maintains its commission free trading for all stock option trades as well.
As with stock and ETF trades though, Webull passes all regulatory fees to the investor. Stock options trading have additional fees that apply to options trading that do not apply to stock and ETF trading.
The four external fees charged through Webull for stock options trading are SEC fees, FINRA fees, OCC Regulatory fees, and OCC Clearing fees. It is important to note that these regulatory fees do change. You can stay up-to-date by checking the fees on the official Webull website.
The Regulatory Transaction fee rate (charged by the SEC) is 0.00051% of all sale orders (with a minimum of $0.01 fee per transaction). That means that for every $1M in sales, your Regulatory Transaction fee would be $5.10. This fee is for sale orders only.
The FINRA trading fee rate (charged by FINRA) is charged by a per contract basis rather than percent of sale like the SEC. The FINRA trading fee rate is $0.00218 per contract sold (with a minimum of $0.01 fee per transaction). This fee is for sale orders only.
The third and fourth fees come from the OCC. The OCC stands for the Options Clearing Corp and is the regulator for all options trading in the United States.
The OCC regulatory fees are a per contract fee charged on all option buy and sell transactions. The fee is currently $0.02915 per contract purchased or sold.
The OCC clearing fees are also a per contract fee charge on all option buy and sell transactions. The fee is $0.02 per contract purchased or sold. The maximum OCC clearing fee per trade is $55.
As with any brokerage, borrowing money comes at a cost. Webull only charges margin interest on levered positions that are held overnight. In other words, if you are to open and close a position on margin in one day you don’t have to worry about these additional fees.
However, if you plan on borrowing money overnight (keeping your levered positions open overnight), you will be subject to margin interest. This amount of interest depends on the dollar amount borrowed. Margin interest is accrued on a daily basis and is paid on a monthly basis.
The daily interest is a simple formula that you can apply to your investments. Daily margin interest is equal to the borrowed cash * Margin Rate / 360. Webull’s current margin rates are outlined below (but are subject to change at any time).
|Debit Balance||Annual Margin Rate|
To learn more about how margin trading works, check out our free article on Webull margin trading.
This fourth bucket of fees is fairly straightforward. While level I sales data is free on the Webull platform, there is a $1.99 monthly charge for level II market data.
To learn more about what is included with Webull level II data, head to the official Webull website.
The final bucket of fees can be categorized as other miscellaneous fees that an investor may come across on the Webull platform. While most fees are covered in this article, there may be a few that are smaller and less frequent that may not be mentioned in this section.
A short transaction of any kind includes borrowing shares of a company before selling the shares. Just as there is a fee associated with borrowing money on margin, there is a fee associated with borrowing stocks.
This loan rate changes with market conditions but is always accrued on a daily basis and charged daily.
The formula for short selling fees is the market value of the stock when market closes * that stock specific loan rate / 360.
Webull investors have access to trading index options on the Webull platform. Unfortunately, index options carry different fees than individual stock options.
These fees are determined by the trading exchange and differ by ticker symbol. Because of that, these index option fees all vary. However, it is important to understand that index options carry different fees than stock options.
Given that Webull is a commission free trading platform, investors often wonder if there are any other fees they can incur while using the trading platform. Unfortunately, commission fee does not necessarily mean fee free and that is the case for Webull.
Webull has five main buckets of fees for investors that use the platform. Those five buckets of fees are as follows: stocks/ETF trading fees, stock option trading fees, margin interest, level II market data fees, and miscellaneous fees.
A lot of the above fees are not fees created by Webull but rather regulatory fees that Webull passes along to the customer. Webull has stated that the platform does not profit from any of the regulatory fees on the company platform. However, other fees like margin interest are fees that Webull has enabled to make a profit.
Even though there are fees on the trading platform, the regulatory fees are often extremely small. Retail investors typically only see a few cents of charge on their trades because of these fees. To learn more about how these fees can impact your portfolio, check out the official list of fees on the Webull website.
If Webull sounds like a good investment platform for you, sign up for free today!
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