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Yes, Webull does indeed provide free trading on stocks and options. In addition, they take zero commission, apply zero trading fees, and do not require a minimum amount of funds in your account. So whether you’re an experienced trader or are just starting, this attractive offer will help you save money regardless of your trading volume.
To develop their platform and make a profit, Webull generates revenue in other ways. Keep reading to find out more.
How does Webull business model work?
Trading commissions - 0%
Profit from margin trading
Profit from Short Selling
Profit from market makers
How Does Webull Make Money? 4 Main Options
Webull makes money by using the same methods as most other brokers. Short selling fees, margin trading fees, paid subscriptions, interest on cash, order flow fees, and outgoing transfer fees make up most of the back-end revenue streams.
The main difference? No commissions. While it might seem like a single line item, trade commissions are the primary revenue source for many traditional brokers. Webull removes these trading fees to attract users to its platform. The more users on the platform, the more activity that contributes to the back-end revenue streams.
Let’s take a further look at some of the main ways that Webull makes money below. You can also find detailed information regarding fees on their website.
Webull Margin Trading
Margin trading allows you to borrow money to purchase stocks and other securities. This loan increases your buying power and enables you to place larger orders, but borrowers should make sure not to invest more than they can afford to lose.
Webull offers up to four-times day trading buying power and up to double overnight buying power to margin traders. To open a margin account, you must have a minimum balance of $2000. The interest rates associated with margin trading can be found in the table below.
Debit Balance
Annual Margin Rate
$0 – 25,000
6.99%
$25,000.01 – 100,000
6.49%
$100,000.01 – 250,000
5.99%
$250,000.01 – 500,000
5.49%
$500,000.01 – 1,000,000
4.99%
$1,000,000.01 – 3,000,000
4.59%
> $3,000,000
3.99%
Subscriptions
Webull offers global market insights for an additional subscription fee of $1.99/month.
Paying for this higher tier will grant you access to the following Level 2 data:
Nasdaq TotalView – gives you the Nasdaq 30 best bids/offers as well as Nasdaq time and sales
Real-time Options Price Reporting Authority (OPRA) sale and quotation data
Toronto Stock Exchange best bid/offer quotes and transaction ticker
Taiwan Stock Exchange best bid/offer quotes and transaction ticker
Hong Kong Exchange 10 sets of bid/ask data quotes and transaction ticker
Short Selling
When you short sell, you are selling stocks or other securities that you don’t own. Webull will lend you these stocks and charge you interest until you give them back, similar to margin trading.
To short sell, you borrow stocks or other securities in the anticipation that their value will drop. Then, after selling these stocks on the open market, you wait until the price has fallen before repurchasing those stocks and returning them to the original lender or brokerage.
Be aware that while people do make significant profits by short selling, the strategy also has a very high risk/reward ratio. If the stock price does not fall or increases dramatically, you could incur heavy losses when you return the stocks.
To short sell on Webull, you must first open a margin account on the platform with a minimum balance of $2000. Daily interest is charged on any open short selling positions.
Working With Market Makers
Another way that Webull generates income is by directing order flow to market makers. These market makers compete against other stock exchanges, like the Nasdaq, and can often provide better offers.
Webull will send trade orders to certain market makers who try to make a profit on the bid-ask spread. If a profit has been made, the market maker will give Webull a small fraction of that profit.
Although these profits are usually fractions of a cent per trade, they can add up to substantial amounts given the immense volume of transactions handled by Webull.
How Does Webull Explain its Business Model?
Webull prides itself on providing a zero commission, zero fee, no minimum brokerage platform. In the words of Anthony Denier, CEO of Webull Financial, “Webull believes in the Internet model. We believe that our superior platform will attract so many users that the tiny amounts of revenue we do generate per account will add up to make our business model profitable.”
In early 2023, Webull reached a record 952,000 active users on a single day. It’s evident that their business model has resonated with a large group of people. According to Webull, this is because a conflict of customer interests does not compromise the platform. For example, other brokers may try to coerce customers into trading more frequently to boost their commissions. However, Webull doesn’t apply this pressure, and its user base seems to appreciate their approach.
Summary
Webull’s zero fee trading platform certainly presents an attractive opportunity for investors looking to avoid accumulating expensive fees. By shifting their income-generating approach to other complementary services, Webull has built a formidable platform that offers users advanced technological capabilities and insightful market data.
If you’re interested in a robust trading platform that will maximize your savings on fees and commissions, then Webull is well worth your consideration.
The Webull broker is characterized by low-quality execution of transactions. Transactions revolve within the company. If you compare trading here with trading in other companies, the difference will be very noticeable. I do not advise.
I have been cooperating with Webull for the third month. It seems to me that this is a sufficient period to see all the obvious advantages and disadvantages of the company. First, about the cons, which, perhaps, only catch me. I don't like their terminal from the word "generally". It lacks tools for analysis, and performance leaves much to be desired. Another disadvantage is that access to margin trading is opened from $2,000 in the account balance. But still, I lingered here, because there are pluses: trading without spreads, increased leverage on intraday trading and a demo account for testing strategies. I don’t see a worthy replacement among competitors yet, I stay with Webull until better times.
I won’t complain about Webull either. My homie advised me to cooperate with this broker and I immediately checked its legal documents. It’s as clear as day, the company operates in the legal field. Trust my experience, there are a lot of scammers these days but Webull is not one of them. The broker's terminal is rock-solid, and after the last update, it became even more convenient to use it compared to before. Everything is smooth with payments and the company strives to make the process even better.
I opened an account with Webull a year ago, the company's experts helped to develop a strategy and decide on financial instruments. I cannot say that I am very impressed with the results, but there is an indisputable plus from our cooperation. Transactions are well protected, there is no commission for withdrawing funds from the account.
FAQ
What can I trade for free on Webull?
You can trade stocks, ETFs, and options listed on U.S. exchanges.
How does Webull make money?
Short selling fees, margin trading fees, paid subscriptions, interest on cash, order flow fees, and outgoing transfer fees.
Does Webull offer paid subscriptions?
Subscriptions of $1.99/month are available for access to global market data and in-depth stock exchange information.
Does Webull offer zero minimum margin trading?
No. You must have an account balance of $2000 to be approved for margin trading.
A broker is a legal entity or individual that performs as an intermediary when making trades in the financial markets. Private investors cannot trade without a broker, since only brokers can execute trades on the exchanges.
Trading involves the act of buying and selling financial assets like stocks, currencies, or commodities with the intention of profiting from market price fluctuations. Traders employ various strategies, analysis techniques, and risk management practices to make informed decisions and optimize their chances of success in the financial markets.
Short selling in trading involves selling an asset the trader doesn't own, anticipating its price will decrease, allowing them to repurchase it at a lower price to profit from the difference.
Day trading involves buying and selling financial assets within the same trading day, with the goal of profiting from short-term price fluctuations, and positions are typically not held overnight.
Hafijur Rahaman is a professional content writer with a focus on trading. He joined Traders Union as a writer in 2022. His goal is to help both new and pro traders in this competitive sector. He enjoys making constant improvements to content, always finding better and simpler ways to communicate the message.
Ivan is a financial expert and analyst specializing in Forex, crypto, and stock trading. He prefers conservative trading strategies with low and medium risks, as well as medium-term and long-term investments. He has been working with financial markets for 8 years. Ivan prepares text materials for novice traders. He specializes in reviews and assessment of brokers, analyzing their reliability, trading conditions, and features.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).
