Is Webull Safe? Is Webull Legit? Honest Answers About Webull

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Is Webull Safe? Is Webull Legit? Webull is a broker founded in the USA in 2017. The company provides trading services on the stock markets with the following types of assets: stocks, ETFs, options, ADRs, cryptocurrencies. Webull is licensed by the SEC (one of the strictest regulators in the world) and FINRA, and is a member of the Securities Investor Protection Corporation (SIPC).

We’re going to take a look at one of the fastest-growing apps in the market: Webull. Before you invest your money into it, you’re probably wondering — is Webull safe? Is it legitimate? Don’t worry — we’ll answer all of your questions right here, with our in-depth guide.

Webull - works officially and is controlled by such well-known regulators as FINRA (Financial Regulatory Authority), SEC (US Securities and Exchange Commission). Also, Webull clients can count on insurance under the SIPC investor protection system.

Webull Background

Compared to the rest of the brokerage world, Webull is a relative newcomer. It was founded in 2017, but the company has managed to overcome its late entry and become a respected electronic trading platform. Taking cues from similarly new competitors like Robinhood, the designers behind Webull managed to create a platform targeting casual and new investors with a clean desktop interface and an easy-to-use mobile experience.

From its founding in 2017, the company slowly developed new features that made it more appealing to more advanced traders — such as NASDAQ level 2 market data, advanced orders, plenty of technical indicators, in-depth charting, customization, and a lot more.

And yet, none of these advanced features have made the platform less sleek or approachable, keeping the core offering relevant. In the past two years, the company has added options trading features, as well as for cryptocurrencies — and as of 2023, Webull is reportedly in talks for its initial public offering.

Is Webull Legit?

All of that being said — you should know that Webull is thoroughly legit, and it provides ample investor protection. We’ll go into more details on the regulations behind Webull below — but suffice it to say that FINRA and the SEC regulate Webull, and it’s also a SIPC member, keeping your deposited funds safe and secure from any financial issues that Webull could potentially experience in the future.

In fact, you’re safe for up to $500,000 in securities and $250,000 in cash if there are any issues that threaten the financial stability of Webull, thanks to its following of the rules set by the abovementioned regulators.

On top of that, Webull also partners itself with Apex Clearing — an immensely trustworthy and popular clearing firm, which ensures that all of your deposited and invested money ends up in its proper place.

As for the internal security measures of Webull itself, they have high-level encryptions that keep your personal data and account information secure and safe from any malware or external meddling.

All of this means that Webull is not only legitimate but also perfectly safe — with all of the best practices you’d want to see from an electronic trading platform.

Is Webull Regulated?

As mentioned above, Webull is considered safe because it’s regulated by top-tier financial institutions — ensuring Webull Financial LLC remains in full compliance with US, UK, and international laws governing investor rights.

Just like all legal and legitimate stock trading platforms, Webull is regulated by the U.S. Securities and Exchange Commission (SEC) and the Financial Conduct Authority (UK). Furthermore, they’re also regulated by FINRA — the Financial Industry Regulatory Authority.

Unlike the other institutions we’ve mentioned above, this is a private corporation. However, the FINRA is a self-regulatory organization within the stock trading community — making sure that member companies that act as brokerages or dabble in exchange markets operate transparently and legally.

For added safety, Webull is a member of the Securities Investor Protection Corporation — the SIPC. This is a non-profit, federally mandated, and member-funded corporation that has insured money deposited with US-registered brokerages since 1970.

How regulators control Webull

The federal securities laws that are applicable to Webull ensure that all investors receive fair treatment. And the upholding of these laws falls upon certain institutions whose work monitors all market participants.

For instance, the Securities and Exchange Commission requires investment professionals, fund managers, asset managers, and public companies to disclose significant information and financial data to investors — ensuring they have complete, accurate, and timely information to make informed investment decisions.

The SEC vigorously enforces all laws pertaining to federal securities and holds everyone accountable for wrongdoing.

On the other hand, FINRA also has investor protection at the core of its mission. They uphold the integrity of the financial markets as a government-authorized non-profit by overseeing all of the brokerage companies in the United States.

FINRA issues licenses and tests every entity that provides securities products, as well as the truthfulness of their advertising. Furthermore, they make sure that all investors have complete disclosure about their purchases before putting down their money. Billions of market events are analyzed by FINRA each day.

Is Webull a scam?

Most of the world’s reputable regulators provide investor protection for Webull, which means it’s definitely not a scam. In the United Kingdom, the FCA provides coverage for up to £85,000 for individual accounts, while FINRA and SEC provide coverage up to $500,000 in the United States. Some regulators and their investor protection €100,000 insurance, while only Australia’s ASIC provides no investor protection for Webull.

Is Webull Legit in My Country?

We’ve explained which of the world’s regulators provide investor insurance for Webull users. However, those aren’t the only countries where Webull is legal. While it may become operational in more countries in the future, currently, you can become a Webull user as a resident of:

  • 1

    Korea

  • 2

    China

  • 3

    United States

  • 4

    Japan

  • 5

    India

  • 6

    Malaysia

  • 7

    The Philippines

  • 8

    Turkey

  • 9

    Brazil

Is Webull Safe to Use?

Whenever you choose an online trading platform, it’s important to see what financial authorities regulate to guarantee the platform’s reputation. As you can see, Webull is monitored by top-tier financial institutions, guaranteeing a high level of investor protection.

On the other hand, Webull is a private company. And while there have been recent murmurs of an IPO valued at about $400 million, the company hasn’t gone public yet — which means it has no obligation to publish its financial information right now. The fact that they’re not listed on any stock exchange is a minor issue — as are the facts that it doesn’t have a banking license or any negative balance protection.

Still, it’s considered a legitimate trading platform by all of the relevant financial authorities. Generally, the safety of any brokerage can be judged by the protection you have as an investor and the broker’s background. And Webull is clear on both counts.

Investors protection fund

If you want to understand how you’re protected from any Webull failures as an investor, you need to know how the Securities Investor Protection Corporation (SIPC) functions. While we’ve explained some of their functions above, the main one that you’re interested in is their insurance against the loss of securities and cash — in the eventuality that any member broker should go bust.

Of course, you can’t expect the SIPC to cover millions of dollars — but they provide decent protection up to $500,000, with a $250,000 cash limit. This is one of the highest amounts covered by any investor protection scheme.

Furthermore, you should know that SIPC doesn’t cover all investments. They provide protection for:

  • Mutual funds

  • Bonds

  • Stocks

  • Notes

  • Investment company shares

The SIPS provides no protection for:

  • Commodity options

  • Commodity futures

  • Interests in silver or gold

  • Fixed annuity contracts

  • Unregistered limited partnerships

  • Unregistered investment contracts

Additional protection from Webull

External financial institutions aren’t the only ones providing insurance for trading on Webull. Apex Clearing, the clearing firm that Webull uses, gives their users additional insurance. Combined, their clients have $150 million in aggregate protection for securities and cash. For each individual client, there’s a limit on $900,000 in cash and $37.5 million in securities.

Webull Mobile App Security

Webull prioritizes the privacy and security of its users' personal data. They implement industry-standard security practices to ensure data remains safe from threats, such as unauthorized access, alteration, and destruction. All of Webull's online interactions are fortified with 128-bit encryption. Additionally, they utilize both firewalls and dual user authentication to further enhance security.

Being a member of the Securities Investor Protection Corporation, Webull provides its customers with a layer of assurance. If Webull were to unexpectedly shut down and assets disappear, customers would have protection up to $500,000, which includes up to $250,000 in cash, as stated by Webull. Moreover, Apex Clearing, the clearing firm for Webull, has an extra insurance policy.

This policy offers protection for both securities and cash, capping at a combined total of $150 million. Should users ever feel uneasy about potential unauthorized actions in their Webull account, they should reach out to customer support without hesitation.

Top Security Rules to trade with Webull

Webull is a popular trading platform, and if you're a beginner, it's essential to understand its security rules. Here are five essential tips to keep in mind:

Understand the Do's and Don'ts of Trading Options

Webull offers guidance on option trading practices. For example, it advises against trading options that have low liquidity or those with a strike price significantly different from the stock's current value.

Learn the Basics of Webull

To use Webull, you can trade stocks, ETFs, and options. Opening an account requires you to be at least 18, possess a valid Social Security number, and reside in the U.S. or a U.S. territory.

Know the Option Trading Levels

Different option trading levels exist on Webull, each carrying its unique terms and conditions. Familiarize yourself with these levels before diving into option trading.

Choose Between a Cash or Margin Account

You have the option to pick either a cash or margin account on Webull. While the cash account is more direct, the margin account permits borrowing funds for investing. Ensure you weigh the advantages and disadvantages of each before making a decision.

Avoid the Pattern Day Trading Rule

For accounts with less than $25,000, the Pattern Day Trading rule applies. This rule restricts you to a maximum of three day trades within a rolling five-day window. To sidestep this rule, consider using a cash account over a margin one.

Armed with these tips, new Webull users can confidently navigate the platform and trade both securely and efficiently.

Do People Trust Webull? Should I Trust Webull?

As a broker, Webull has enjoyed steady growth since it opened its doors in 2017. And it has not only survived the 2020 crisis facilitated by COVID-19 — but it has managed to expand its service portfolio in that time. Since the end of November 2020, Webull has enabled its traders to use cryptocurrencies as trading instruments.

While cryptocurrency transactions can only be done via their mobile application and with a 1:2 or 1:4 leverage, it’s a great addition — and the minimum deposit for any kind of brokerage account is still just $1.

The platform has achieved immense growth in the past five years — bleeding plenty of traders from their main niche competitor, Robinhood. In the intervening period, they’ve achieved enough success to warrant a Goldman Sachs-led IPO, which is bound to happen shortly.

Webull Pros and Cons

Webull is definitely a legitimate, rising star among broker companies — providing an easy-to-use trading platform, plenty of different fundamental and technical analysis tools, and a wide variety of stock market assets. That being said, it’s not perfect — just like any other platform, it’s got its pros and cons. And we’ll take a short look at both categories right here:

👍 Webull Pros:

Zero commissions — you don’t have to pay any additional fees while trading ETFs, options, and stocks.

No deposit requirements — there’s no minimum deposit for retirement (IRA) and brokerage accounts.

Professional analytics — the platform provides traders with plenty of cutting-edge trading and analytics tools.

Proper insurance — Apex Clearing and different regulatory bodies provide insurance for Webull traders.

Reputable regulatory oversight — you can easily file a complaint with a number of institutions that control Webull activities.

Excellent customer support — 24/7 customer support in both English and Chinese

expenses

👎 Webull Cons:

Lack of Forex features — you can’t use Webull for transactions that involve currency pairs as a financial instrument.

Lack of OTC features — you can’t use Webull for trading in stocks, bonds, futures, or mutual funds in OTC markets.

Limited crypto support — so far, you can only make cryptocurrency transactions via the Webull mobile app.

Limited leverage — you need $2,000 in your account to have favorable leverage in trades.

Is Webull Really Free?

From the perspective of Webull itself, their services are free. They won’t charge you any commissions for trading in options, ETFs, and stocks found on US exchanges. Still, there are some extra charges and fees on other financial instruments.

While ACH transfers are free, there is a $30 fee that the broker will charge in the case of an incorrect account number or an insufficient balance. And the fee for withdrawals and deposits via bank transfers depends on the specific institutions.

If you’re making a deposit from non-US banks, there’s a $12.5 deposit fee and an $8 for US-based banks. As for withdrawals, people from non-US jurisdictions have to pay a $45 fee, while US citizens pay $25.

Also, there are clearing and trading fees that go toward OCC regulators, FINRA, and the SEC — usually up to $0.045 per contract or trade. Users should note there are additional fees for withdrawals that intermediaries, recipients, or banks may charge — but these are not related to Webull itself.

Is Webull Good For Beginners?

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Based on our review, we can conclude that Webull is definitely a great broker for beginners.

First of all, their web platform is an excellent fit for any beginners — it’s got an optimal variety of order categories, decent customizability (workspace, charts), and it’s ultimately user friendly. Also, the Webull mobile platform is both well-designed and safe, with two-step authentication.

Many trading newcomers are wary of fees, and the lack of commissions for options, ETFs, and stocks is definitely a great boon for beginners. Plus, there are no payout and funding fees for ACH transfers, though wire transfer expenses are higher than with some of their competitors, which is something that can be improved upon.

Another reason why this platform is a great place for traders to start is a seamless account registration process. There’s no minimum deposit; everything is fully digital and lightning-fast.

Summary

When we draw the bottom line, the fees on Webull are pretty approachable, and the platform is easy to use. You can open an account in mere minutes, as there’s no minimal deposit — and you have all of the basic trading options that both beginners and advanced traders need.

There are a couple of drawbacks, most notably their portfolio of financial instruments and withdrawal options — the latter of which can be a bit too costly.

FAQs

Is it safe to use Webull?

Webull provides a high level of security through 128-bit encryption, two-factor authentication, firewalls, mobile security. The SIPC provides compensation up to $500,000.

Is Webull safe for beginners?

Yes, Webull is safe for beginners. There are no commissions for inactivity, a simple account opening format, structured trading platforms.

Does Webull give you money?

Webull pays additional income from the shares that are held in the trader's account. Profit is accrued daily, and the account is credited once a month.

Is Webull worth using?

Webull has many strengths, including a trading app for mobile trading (4.7 on the App Store and 4.5 on Google Play). The platform has many useful features.

How safe is Webull?

It’s a completely legitimate and legal brokerage, with plenty of oversight from the likes of FINRA and the SEC. These institutions guarantee that Webull is a brokerage that legally conducts its business, and their SIPC membership speaks to that fact as well.

Is Webull secure?

The platform has high-level encryption for account information, and all transactions are made secure with insurance from both FINRA and Apex Clearance.

Is Webull better than Robinhood?

If Bloomberg and similar trade publications are to be believed, Robinhood has lost plenty of users to Webull in the last couple of years. However, we’d say it’s a matter of preference — while Webull offers more quality-of-life features for beginners, Robinhood has some great analytics tools for experienced investors. Still, both platforms are free and extremely usable.

Who Owns Webull?

The Webull platform is operated and owned by the China-based Fumi Technology company — however, they have NYC offices with higher management as well.

Team that worked on the article

Andrey Mastykin
Author, Financial Expert at Traders Union

Knows about
Trading strategies, technical analysis, Forex, stock market, long-term investing

Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform. Andrey focuses on educating readers about the potential rewards and risks involved in trading financial markets.

He firmly believes that passive investing is a more suitable strategy for most individuals. Andrey's conservative approach and focus on risk management resonate with many readers, making him a trusted source of financial information.

Experience
Andrey's passion for finance began in 2009, and he has since accumulated extensive experience in trading and investing across various asset classes, including stocks, Forex, and cryptocurrencies.

He has spent over 15 years managing his own capital and working with financial portals, financial institutions, and IT companies, as a financial writer and analyst, further refining his investment expertise.

He is the author of several training courses on investing and trading in financial markets. Led multiple FX/Stocks/Crypto webinar educational presentations. Authored hundreds of articles on the global economy, stock, cryptocurrency, and Forex markets, along with trading strategies. He has also penned hundreds of professional reviews of financial firms.

Throughout his journey, Andrey has been heavily influenced by the works of renowned authors and investors like Benjamin Graham, Ray Dalio, Robert Shiller, and Nassim Taleb.

Dr. BJ Johnson
Dr. BJ Johnson
Developmental English Editor

Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.

The topics he covers include trading signals, cryptocurrencies, Forex brokers, stock brokers, expert advisors, binary options. He has also worked on the ratings of brokers and many other materials.

Dr. BJ Johnson’s motto: It always seems impossible until it’s done. You can do it.

Mirjan Hipolito
Cryptocurrency and stock expert

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). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.