Webull vs Robinhood: Best Commission Free Online Brokerage?

webull vs robinhood

Webull vs Robinhood: Which Is The Best Commission Free Online Brokerage?

Imagine being able to trade stocks, options, cryptocurrency and exchange-traded funds without paying a penny in commissions or any hidden fees. Forget about imagining it; it’s already here.

Over the last decade, the commission costs for trading stocks have tremendously decreased. Now, we are at a point where commission-free trading is available on many different platforms.

For the average retail investor, there has never been a better time to invest with these free cutting-edge platforms.

These advances in technology and systems have allowed platforms such as Webull and Robinhood to thrive. These are two of the most popular free investing platforms out there today.

In this article, we are going to compare the Webull and Robinhood platforms. We will be identifying where each platform shines as well as where each platform could improve.

These apps are changing the face of trading, and we have a lot to tell you about each of them. Ultimately, it’s your choice, but we are here to help you make an informed decision.

Get a Free Stock from Webull Here

Get a Free Stock from Robinhood Here

Summary

  • Both Webull and Robinhood offer $0 commission trading with $0 minimum
  •  Webull now offers free IRA accounts, which are not offered on Robinhood 
  •  Robinhood offers fractional shares  which allows you to invest as little as $1 in stocks and ETFs (Webull does not offer fractional shares)
  • Webull offers commission free short selling in margin accounts
  •  Robinhood is designed for complete beginners  so intermediate and advanced traders will find the platform to be watered down and lacking in research tools
  •  Webull offers research tools above and beyond Robinhood  making it a better option for informed, research-oriented traders and investors
  •  Webull offers a trading simulator and Robinhood does not 
  • Both platforms fall short when it comes to customer service, which is something most people expect among free trading apps
  • Neither platform is a good fit for passive or long term investing (For that, we recommend checking out M1 Finance)
  • Investing Simple readers can get a FREE STOCK from Webull when they sign up using our link and fund their account with any amount.
  • Both platforms now offer options trading for free

What Is Robinhood?

Robinhood

Known as the app that pioneered commission-free trading, Robinhood opens doors for beginning investors looking to get their feet into the game without paying high commissions or dealing with large minimum account balances. Robinhood charges $0 in commissions and the minimum to open an account is, you guessed it, $0!

Click Here to Get Started With Robinhood!

Experts designed this platform with beginners in mind.

It is meant to be the most straightforward trading platform out there. As a result, intermediate to advanced traders often find this platform to be lacking when it comes to research tools, order types, and technical indicators.

Still, if you are looking for a simple platform to trade commission-free, it is an excellent option.

Brief History Of Robinhood

About ten years ago, two friends and roommates (and aspiring finance wizards) at Stanford University launched Robinhood. Following graduation, they headed to New York City, where they had great success building two finance companies selling trading software to hedge funds.

Along the way, as they gained familiarity with the system in the world of finance, they realized that big Wall Street firms pay effectively nothing to trade stocks, while most Americans must pay up to $10 for every trade.

They made it their mission to find a way to give everyone – yes, even people without significant wealth – access to getting into the financial markets.

Two years later, they headed back to Cali and founded Robinhood, a company that leverages technology to encourage everyone to participate in the larger financial system.

How Does Robinhood Work?

It’s very simple to open a Robinhood account right on your smartphone (or online).

Just plug in a few answers, like your contact info and how you’ll fund your account. You will also have to enter your social for tax reasons as well as some additional information about your employment. After that, they will ask you a few questions about your level of trading experience.

Then it’s onto the next step: launching your soon to be stellar investments.

Once your account is approved, you can make your initial deposit and begin investing. You may decide to invest in an individual stock, or maybe an ETF is better suited for you. Robinhood now offers fractional shares which means you can buy shares of stocks and ETFs in $1 increments.

How Does Robinhood Make Money?

These free trading apps are not operating a charity. They DO make money, but in more unconventional ways. The old model for brokerages was simply charing fees and commissions to customers.

Here’s a few ways they make money:

  • Robinhood Gold offers margin trading which starts at $5 per month
  • They do not pay interest on cash, they keep any interest they earn
  • Robinhood sells orders to market makers which give them a small kickback

Robinhood Features

In a nutshell, this is a beginner platform with some basic features. One key area where they shine is offering cryptocurrency as well as options trading. The fractional shares help smaller investors too!

Zero Commissions

Robinhood allows users to trade stocks, ETFs, options, and cryptocurrency completely free. There are no strings attached or hidden fees of any kind. With Robinhood, what you see is what you get!

Simple App Design

They have the most straightforward user interface of any investing app we have tested. This is a pro for some and a con for others. We can 100 percent say that Robinhood is a beginner-friendly app. However, as you become a more experienced trader you may find that it is lacking in some areas.

Robinhood Gold

Robinhood Gold allows you to take advantage of several different features. It gives investors who can tolerate more risk the ability to trade on margin, which is also known as borrowed money.

robinhood gold

You can increase your buying power by trading on margin. Robinhood extends you a loan to purchase stocks relative to your account value.

You need to have at least $2,000 in your account to open a margin account.

It also allows you to have instant deposits from your bank and professional research reports from Morningstar.

You must opt into the service, which has a flat monthly fee based on margin (Robinhood refers to this as buying power) as well as your account size. Margin trading is hazardous, and beginner investors should not be using it. If you’re new to investing and wary of risk, we say skip this option for now until you’re familiar with all the ins-and-outs.

Instant Verification

Once you’re ready to go, you won’t be bogged down by account verifications.

Robinhood uses instant verification with many major banks. Bank transfers of up to $1,000 are available immediately for investing, and the same goes for profits of up to $1,000 from selling stocks.

Deposits more substantial than $1,000 will take around five business days to process.

Want to invest in a schedule? You can set up automatic deposits out of your bank account weekly, biweekly, monthly or quarterly.

Robinhood Minimum & Fees

Just like with Webull, this is a 100 percent free trading platform.

They do not charge any hidden fees, and there are no strings attached. Don’t have the cash to open a sizeable account? No worries. Robinhood doesn’t have a purchase minimum, which means people can get started investing right away.

Of course, to invest, you’ll need enough to purchase the investment you have your eye on. But you can start small, then gain momentum as you go along and become more confident and acquire more know-how. Thanks to fractional shares, you now only need $1 to buy a fraction of a share of any stock or ETF that trades on the platform.

Even though there is no minimum balance to open an account, however, you do need to have $2,000 to open a margin account.

Robinhood Pros

  • Easy to use, beginner-friendly platform
  • Ability to trade stocks, ETFs, cryptos, and options
  • Access to margin through Robinhood Gold
  • Free pre-market and extended-hours trading
  • Fractional shares make the share price irrelevant
  • Dividend reinvestment is now available too

Robinhood Cons

  • The app only supports basic order types
  • Minimal research tools and data available
  • No trading simulator
  • Do not offer retirement accounts

Free Stock From Robinhood

But here’s a real perk: there’s even a way to get free stock.

All you need to do is use this link, and Robinhood will add one share of free stock to your account when they approve your brokerage application. You’ll be able to keep the stock or sell it after two trading days.

How does Robinhood choose which stock you get?

They select the shares of free stock randomly from their inventory of settled shares. The keyword here is RANDOM. The Robinhood people choose the shares randomly, so you may not receive the same stock as others who open accounts at the same time as you do.

The value of the share you receive may be anywhere between $2.50 and $200 and fluctuates based on market movements.

Click Here To Download Robinhood (& Get Your Free Stock!)

Choosing The Right Platform

With so many platforms available today, it can be a bit overwhelming. The good news is, even if you make a decision and you change your mind, you are allowed to have multiple different brokerage accounts.

Some people, for example, will use Webull or Robinhood for their active trades and then do their long term investing within M1 Finance. You may find that using multiple platforms is more effective.

What Is Webull?

webull

Webull is a commission-free stock and ETF trading platform. Experts designed Webull for the active trader who is looking for a more dynamic user interface than most free platforms are offering.

This platform has features specifically for traders such as technical indicators, research agency ratings, financial calendars, and more. With easy access to margin, research tools, and live data, Webull has built an ideal platform for active traders.

Keep in mind… it is not designed for long-term passive investors.

Instead, it’s for those of us who are actively trading.

Since Webull is putting so much in front of you at your fingertips, it can be overwhelming if you are a complete beginner. Robinhood has created a true beginner-friendly platform, but most intermediate to advanced traders agree that it lacks in many areas.

Even though there are 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 effortless to navigate. For more info, check out our full Webull review.

BONUS: Free Stock!

Are you interested in getting a completely free stock?

Webull is offering Investing Simple readers who open an account using this link and fund it with any amount get a free stock. The value of this stock is up to $300.

It is based on a lottery system, so it could be a lower value stock or one worth quite a bit more!

How Does Webull Make Money?

A lot of people are wondering how Webull makes money, and for a good reason! There are many free trading apps out there these days. I am here to tell you that they are not, in fact, operating a charity.

Webull makes money in several different ways outside of charging customers fees or collecting commissions.

  1. They offer paid subscriptions if you are looking for real-time global market data
  2. Webull offers margin accounts, allowing them to earn margin interest
  3. They can earn interest on all the idle cash held within brokerage accounts
  4. By directing order flow, they earn fractions of a cent on every trade placed

Webull Features

Robinhood did a great job gaining market share for beginner investors, but they did not meet the needs for intermediate active traders. That is why Webull was able to step in and gain market share so quickly. One of the newest features is fee free retirement accounts offered on the platfom!

Real-Time Market Data

Webull is most well-known for the data.

In fact, they were initially just an app for investment research before they added the trading feature! Webull offers real-time market data for all US markets. This is particularly important when it comes to trading, as your goal is to capitalize on very quick moves in the market.

webull market data

Unlike many trading platforms that have delayed quotation, Webull is sharing this data with traders through the app in real-time. For those looking for real-time data for global markets, Webull offers this for a monthly subscription.

Remember, however, that you do not need to pay for any subscriptions to access real-time data on US markets.

Real-time data is essential when you are using it to make trading decisions. As a trader, you are often looking to capitalize on micro-trends that can happen at the blink of an eye. Delayed reporting of price data could be very costly for an active trader.

Technical Indicators & Order Types

Traders rely on technical analysis or chart patterns.

Webull offers close to two dozen technical indicators available at the click of a button. They also offer a number of advanced order types that you do not see on other free platforms.

This includes OCO, OTO, and OTOCO.

Trading Simulator

This is one of the features that are totally unique to Webull. To be honest, the fact that other trading apps have not picked up this ball and run with it came as a surprise to us.

For beginners entering the stock market, paper trading is a very important step in the process. The trading simulator allows traders to practice without using real money.

Instead, you are using fake money and placing trades just like you would with real money. This allows you to test out trading strategies and become more familiar with the platform risk-free. Webull gives you $1,000,000 of play money in the free trading simulator.

Commission Free Short Selling

Most free brokerage accounts do not offer short selling.

This is an advanced trading strategy where you bet against a particular stock. Not only does Webull offer short selling, but it is also available commission-free. Short selling must take place in a margin account.

In order to open a margin account, your account balance needs to be $2,000 or more.

Analyst Ratings

One of our favorite features was the analyst ratings.

Webull offers a variety of research tools for both the technical trader and fundamental investor. This includes press releases, earnings reports, earnings dates, dividend dates, key financial documents, analyst ratings, and more.

Analysts make buy, sell, and hold recommendations about stocks. This can be very helpful to you when you look at making buying or selling decisions. They present this in a very organized fashion, and it is possible to get a good overview of a particular company in a matter of seconds through the app.

Fundamental Data

Fundamental investors study the financial health of a company to make a long-term bet. They look at key financial documents like the balance sheet, cash flow statement, and income statements. They also look at key metrics like earnings per share, PE ratio, and more!

Webull places all of this data at your fingertips.

You can view the numbers from the key financial documents as well as see visual graphs of the overall trends. They also offer helpful comparison tools that compare the metrics of one company to another in the same industry.

You will be able to answer questions like:

  • Is the company beating earnings expectations?
  • Are profits and revenue increasing?
  • What are the assets compared to the liabilities?
  • How does the overall valuation compare to peer companies?

Financial Calendars

Another useful feature for users is the financial calendar.

This calendar shows you important upcoming dates for a company, including dividend payments and earnings reports. Beyond that, there are also calendars that show what companies are reporting earnings each week as well as what are the up and coming IPOs or initial public offerings.

Watchlists And Alerts

Webull allows you to create watchlists of stocks that you want to keep an eye on!

You can also set price alerts that will allow you to get notifications from Webull when the price reaches a certain level. For example, if you were looking to buy a stock for under $100, you could set a price alert for when it reaches that level and receive a notification from Webull.

Webull Minimum & Fees

To echo what we said earlier, this is a 100 percent free trading platform just like Robinhood. 

They do not charge any hidden fees, and there are no strings attached. There is no minimum balance to open an account. However, you do need to have $2,000 to open a margin account.

There is a $0 fee for incoming ACATS stock transfers and $75 fee for outgoing transfers. For those funding the account with a wire transfer, the initial transfer in is free. After that, there may be fees associated with this wire transfer.

ACH or Automated Clearing House transfers are completely free. This a direct electronic transfer from your bank account to Webull. You can electronically transfer money to and from Webull at any time fee free.

Webull Pros

  • Get a FREE STOCK when you open and fund with any amount!
  • They recently added 100% free IRA accounts
  • Trades are 100 percent commission-free, including short selling
  • Research tools are in place for both technical traders and fundamental investors
  • The trading simulator lets you practice trading risk-free
  • Free extended hours trading pre-market and after-market
  • Real time data available on US markets for free
  • Webull now offers free options trading

Webull Cons

  • Might be “information overload” for complete beginners
  • No cryptos
  • Only one account type available
  • Do not currently offer fractional shares
  • No dividend reinvestment (DRIP)

Are Free Trades Legit?

Webull and Robinhood are offering a very similar platform for investors.

Both are leveraging technology and operating paperless businesses to be able to offer investors a commission-free and fee-free investing experience. Instead of charging a commission on trades like a traditional brokerage, they make money in a few different ways:

  1. They earn interest on the uninvested cash held within brokerage accounts
  2. They both offer paid subscriptions (Robinhood Gold, Webull Global Market Data)
  3. By lending shares out to short-sellers, they can earn interest in the process
  4. By directing order flow, they can earn a fraction of a cent on each trade placed
  5. Both offer margin trading, allowing them to earn margin interest

The old saying goes, if it seems too good to be true, it probably is.

The good news is that it is just not the case with these free investing platforms! Both Webull and Robinhood carry the same SIPC insurance as the mainstream brokerages. They simply found creative ways to make money outside of charging customers fees and commissions.

SEC & FINRA Fees

There are fees charged by the SEC and FINRA for each trade.

You will pay these fees regardless of what brokerage you use. It is important to understand that Webull passes these fees directly to these regulatory agencies, and Webull does not receive any of the money.


Webull vs Robinhood Verdict

Webull and Robinhood both offer commission-free trading with no minimum account balance. What really separates the two are the unique features of each platform. In a nutshell, Robinhood is designed for first time or beginner traders while Webull is meant for intermediate to advanced traders.

 Robinhood is designed for complete beginners who are looking to trade stocks, ETFs, cryptos or options, all commission-free.  Webull is for intermediate to advanced traders looking for more technical or fundamental data that you will find with most of these free trading platforms.

 One thing you will find is that they all lack solid customer support. Since they have to cut costs and operate lean business models, they do not offer any kind of phone support.  You are not able to call and ask questions or place trades over the phone. If you are looking for this type of customer service, you may want to consider an online discount broker.

webull vs robinhood

 Overall, we think Webull has the slight upper hand because they offer a trading simulator, as well as many research tools for both active traders and long-term investors.  However, Robinhood does have a competitive edge since they offer fractional shares now.

Webull recently added free IRAs which is not something Robinhood is offering at this time.

 At the end of the day, both platforms are 100 percent free, so you can try them both and see which one is a better fit for you! 

Neither platform is a good fit for long term investing. They do not offer dividend reinvestment, portfolio rebalancing tools or any guidance as far as building a well diversified portfolio. However, that is simply not the customer they are going after.

  • Think Or Swim is also a free platform, works fine for me. Great blog BTW.

    • Edward Canty says:

      Yes think or swim is a great platform! Equity trades on TD Ameritrade cost $6.95

      Glad you like our blog!

  • free proxy says:

    Hi,I read your blog on a regular basis. Your style is great, keep doing what you’re doing!

  • Thanks for the great info! Looking forward to more updates on this.

  • Kerry W says:

    Robbin Hood offers fractional shares now but their trade execution is not great. Webull offers options now their trade execution is better.

  • Justin P. says:

    Love your article, but your video review of Webull is wrong in a couple of areas. First they do have a web based platform and you can trade options with them. Also, they are now giving away 2 stocks. 1 When you open and another when you deposit an amount in there. Thought you should know so you could update your review! Love the work, keep it up man! Finally, having my email does not mean you have permission to use it for any marketing or newsletter purposes. Thanks so much.

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