Webull is an investment app that allows you to buy and sell stocks and ETFs right from your phone.
One of the things that makes Webull so appealing to many people is the fact that they don’t charge commission fees.
They also don’t have any account minimum requirements for their users. This makes investing in the stock market much more accessible to people who may normally have been able to afford it. Read our detailed review of Webull here.
If they don’t charge commission fees, then you may be wondering – how do they make money?
Here, we’ve compiled the ways that Webull profits from app users:
1. Paid Subscriptions
One of the ways that Webull makes money is by offering paid subscriptions to committed investors.
These paid subscriptions give you access to advanced trading features that you don’t get access to with the free version.
While you can still trade successfully with all of the free features, serious investors often find that they can implement a broader range of investment strategies with the paid features.
Webull is targeted more towards intermediate and advanced investors, rather than beginners, so there’s enough interest among their subscriber base to make this a viable option.
With the paid subscription, you get access to international market data, as well as extensive real time data that goes above and beyond what you get in the free version.
These subscriptions are $4.99 per month or $53.99 per year. Although they aren’t necessary for all users, these subscriptions are very helpful for the more serious investors on the platform.
2. Margin Trading
Webull allows you to trade on margin, which is a very exciting feature for active traders.
For those who trade several times per day, margin trading allows you to place trades without waiting for financial transfers to go through. However, since it’s riskier than other types of trades, Webull does charge margin fees, which helps them make money.
Webull’s margin fees start at 3.99 percent, and you need a minimum account balance of $2,000 to trade on margin. Webull only allows you to sell on margin 4 times per day or 2 times during the overnight periods.
It’s important to be very careful with this feature, as they will automatically liquidate your existing shares if you trade on margin and go below the $2,000 minimum.
3. Order Flow
On the back end, Webull makes some of their money by selling order flow securities.
This means that when other firms are busy and have too many buy and sell orders, they pay for Webull to process them.
This is common practice among brokerages, and it helps them make extra money on days when they have more processing power available than they really need.
Webull makes use of any extra cash left sitting idle in customers’ accounts by investing it in things like money market accounts.
On an individual basis, the amount they invest is very small, but when multiplied by thousands of accounts across the platform, it adds up to a substantial source of income for Webull.
These investments don’t affect account holders, but they do allow Webull to keep running a commission-free platform.
These techniques that Webull uses to make money are also used by other brokerages throughout the country. However, Webull’s model is different in that they don’t charge commission fees.
They believe that by making trading more accessible to everyone, they will make more money using these small income generators, simply by virtue of having a high volume of users. So far, this strategy has been working, and Webull has received plenty of press and attention surrounding their platform.
They’ve carved out a niche for people who want to go beyond beginner-level investing and explore active trading, but are priced out of traditional broker services (or just don’t want to pay any additional fees).
Is Webull worth it?
You may be wondering if Webull is worth using, particularly compared to other investment apps.
For active traders, or those who want to up their investment gain, Webull provides incredible value that is difficult to beat. They offer in-depth trading tools to help you make smart investment decisions and actively grow your wealth.
They have real-time charts and indicators, analyst reports, financial news and calendars, and stock sorting tools, all available in the free version. You get even more functionality in the subscription version.
Webull makes it easy to keep up with all of the fluctuations in the market and trade throughout the day. Since Webull doesn’t charge commission fees and doesn’t have account minimums, it makes it much easier to make the investments you want, without having to worry about spending on additional fees.
Another helpful feature that makes Webull very appealing is its paper trading accounts.
These are essentially virtual accounts where you can practice trading without money.
Pro Tip: Webull is currently running a promotion. If you sign up today with a special referral link, you will get a FREE STOCK (valued $8 – $1000)
This is a great way to test out new investment strategies before actually putting them into practice. It also helps you get a feel for how the app works if you’re still relatively new to investing.
As previously mentioned, Webull offers the option to trade on margin. This is something that’s very rare for a trading app and is hugely appealing for many day traders.
They also offer extended trading hours that go above and beyond other apps – you can trade in extended hour sessions from 4 to 9:30 AM and 4 to 8 PM EST, in addition to the main trading session. Their customer service has also received praise from many existing users.
Their customer service team responds very quickly, and you can reach them via email, online live chat, or phone.
There are a few downsides to using Webull, and there are a few types of traders that may not benefit from it.
Webull currently only offers the option to trade stocks and ETFs, so if you’re looking to trade something else, like mutual funds, it may not be the best option for you. Another thing to consider is the fact that Webull encourages financial independence and puts you in total control of how you invest your assets.
It’s designed with active traders in mind. If you want to use a buy-and-hold investment strategy, or just want someone else to do the bulk of the work for you, this may not be the best option for you.
Webull is also not the best choice for those who are entirely new to investing.
Webull offers advanced features and has a complex interface, and this can be very overwhelming if you haven’t invested before and aren’t familiar with the basic concepts and terms.
In these cases, you may be better off using a different investment service.
Getting Started With Webull
If you are interested in getting started with Webull, the process is fairly simple.
You’ll need to download the mobile app (their desktop version is still in the works), and then make a profile.
To make a profile, you will need to provide your bank account information so you can make trades.
They currently only allow you to fund your Webull account with bank transfers, not credit or debit cards.
You will also need to provide some personal information to verify your identity, which is required by the federal organizations that regulate brokers like Webull.
From there, Webull will need to approve your account.
This usually takes less than a day and can happen in as little as a few hours. Once you are approved, they will make two small deposits into your bank account to verify its legitimacy. Then, you can start trading with Webull.
As one of the most exciting new investment services on the market, Webull is really changing the game and giving more people the ability to get into active investing.
By having no commission fees or minimum balances, and having everything accessible on a smartphone, it means that more users can get into active daily trading.
By using other means to make money, they are making the service better for the consumers that use it, with a fun and stress-free investing experience
As you can clearly see, Webull is a legitimate company and the are taking market share away from Robinhood.
There are also a member of Securities Investor Protection Corporation (SIPC), which protects customers up to $500,000 (including $250,000 for claims for cash).
You can read more in our Robinhood vs Webull article.
If you have not yet opened a Webull account, I would recommend giving them a shot. Make sure to use a referral link to get your free stock.