Webull Options - Everything You Need to Know About Webull Option Trading to Earn More

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How to Trade Options on Webull:

Open an account and get verified.

Top up your account in the most convenient way possible.

Analyze the market.

Open a call or put option. Get a profit in case of a correct forecast.

Webull is one of the highly trusted online brokers and offers a great environment for investors and brokers. It comes with a next-generation, easy-to-use, and revolutionizing online platform. One of the most prominent features of this online brokerage is the availability of exotic assets such as options.

The options market used to be considered for institutional investors, but it's no longer the case, thanks to the advanced functionality of online brokers. Now smaller investors are also increasingly turning to options trading. The Webull online trading platform comes with features and straightforward mechanics that make it easy even for novice traders to start their options trading journey. In this article, we’ll discuss everything you need to know about Webull options trading to earn more.

How to trade options on Webull:

Open a Webull account and get approved for options trading. Then navigate to the options trading page, select the underlying asset you want to trade, and enter the details of your trade, including the option type, expiration date, strike price, and number of contracts.

What are the Options?

Before we get into the procedure to perform options trading on Webull, it’s important to discuss what options are. Unlike common assets such as bonds and stocks, options basically are contracts between two different parties. These contracts provide the investor with the right to purchase or sell the desired asset like a bond or stock at a specified/strike price within a certain time duration. If the underlying asset fails to reach or cross the strike price within the specified time, the options contract expires worthless and is considered as out of the money.

Many investors and trading experts suggest that options trading is a highly risky business. But the fact of the matter is that it can involve less risk as compared to actually trading the underlying asset. However, it greatly depends upon the options trading strategy that you use. Moreover, trading options still carry considerable risk, and only the right approach to minimize that will allow you to earn profit. That’s why this type of trading isn’t for everyone.

Main Types of Options

Depending upon the type of the underlying securities, options can be of different categories such as stock options, index options, Forex options, Commodity options, Futures options, and Basket options. Primarily options are divided into two different types as discussed below:

Call Options

Call options contract provides the investor with the right to purchase the underlying security (not the obligation) at the strike/specified price. It allows the traders to buy calls if they believe that the underlying security price will increase. Moreover, they can also sell calls when they believe that the price will decrease.

Put Options

Put options contract provides the buyer with the right to sell the underlying security (not the obligation) at the strike/specified price. If the buyer with the put contract exercises his/her option, then the seller will be obligated to purchase the security. A trader purchases “puts” if s/he believes that the underlying security price will decrease and sells them if they predict that the price will increase.

Read more in the article Binary Call And Put Options.

Options trading Advantages

Options trading comes with many benefits, and some of the most important ones are listed below:

Lower Upfront Financial Commitment

The price that you need to buy an option is way less than purchasing shares outright. But if the trade goes in a positive direction, then the benefit will be the same as actually buying and selling the stock.

Flexibility

You, as an investor or trader, will have the chance to deploy several strategic moves before your Options contract expires, including:

  • Exercise the option, purchase the underlying securities, and sell them.

  • Exercise the option and purchase the underlying securities to improve your portfolio.

  • Sell options contracts with intrinsic value to a potential buyer.

  • Try to make some money by selling the “out of the money” contract before it expires.

Limited Loss for Option Buyers

You aren’t obligated to complete the trade when you buy a call or put. If the trade goes in the opposite direction as compared to your prediction, your losses are limited to the amount you actually paid for the Options contract and fee.

Freeze the Stock Price

Option contracts allow you to fix the stock price for a certain period at a specific price. It guarantees that you’ll be able to sell or purchase the stock before it expires at the strike rate depending upon your option type.

High Potential Returns

Option contracts allow you to gain higher returns by spending less money if the trade goes in the same direction as you predicted.

Option Trading Risks

Along with their benefits, options come with some downsides as well that you must understand before starting your options trading journey.

Expiration Date

All the option contracts have a specified expiration date, unlike stocks that you can hold for as long as you want. There's possibly no way to stop options from getting expired as the expiration dates get closer the time value decay rate increases. That's why it's critical to keep an eye on your options in order to keep them from expiring worthless.

Full Loss

You can potentially lose every single penny that you used to buy options. It happens when your contract reaches the expiration date with out-of-the-money options.

Why Should You Consider Webull Options?

If you’re planning to start your options trading journey, then you can do it on Webull. It’s one of the best options out there for options trading because it offers an international-scale environment with tons of useful features. Most importantly, Webull options fees and commission are zero, and you can perform options trading without paying a single penny for fee or commission.

Webull Options Trading Advantages

The following are some of the advantages of using Webull for options trading:

Webull Options Markets

There are currently 5 different US options markets that Webull supports. Other than that, the following types of options are available on the platform.

  • Call Options

  • Put Options

Webull Account Opening

The first step to start options trading on Webull is to open your account, which is very easy and fast. You'll need to either install the desktop or smartphone application on your respective device. After opening the application, you'll need to click/tap on the Sign-Up button.

The system will ask you to enter your personal information such as name, email address, permanent address, social security number, date of birth, photo of your passport or ID card, etcetera. Moreover, you need to provide your financial experience, employment information, and financial status. You might also need to provide the source of your income. Once you have entered all the required details then, you’ll need to choose your account type (margin or cash), review the information, and submit the application.

Account Opening on Webull

Account Opening on Webull

How to Add Options to Your Webull Account?

Whether you selected a margin or cash account, Webull won’t allow you to start trading options right away. Webull has an extra application process that is required by law. Once your account is created, you’ll need to go to the Options Trading option, and you need to provide answers to a few questions that will allow you to add options to your account. The approval only takes 24-48 hours.

How to Trade Options on Webull

There are certain steps that you need to take in order to start options trading on Webull. For your convenience, we have compiled them below.

Log in to the Webull Account

The first step after creating your account and getting approved for options trading, you’ll need to login into your account. For that, you’ll need to use the same email address or phone number that you entered while creating your account and the password that you selected.

Once you have logged in successfully, you’ll need to click on the “Unlock Trading” option located on the right-hand side of the main page. You might also need to verify your identity in order to fund your Webull account.

Find the Options in the Webull Mobile App

In order to find the Options in the Webull mobile app, you’ll need to go to the stock details page. Here, you’ll need to tap on the “Options” button that will be located on the bottom bar. Then, you’ll need to tap on the option that you want to trade.

Options in Webull Trading App

Options in Webull Trading App

Find the Options in the Webull Desktop App

On the other hand, if you want to trade options by using the desktop application, then you'll need to tap on the Stocks icon located at the second number in the left-hand side column, as shown below.

Options on Webull Browser Version

Options on Webull Browser Version

Now you'll need to click on the "Options" tab, and it will take you to your selected stock's options chain.

Options on Webull Browser Version

Options on Webull Browser Version

Provide Market Research

Once your Webull account is ready for options trading, you need to spend sometime performing market research. An uninformed decision can entirely break the whole trading experience that you don't want. You'll need to take price movement and market timing into account while trading options much more than other types of trading. That's because option contacts, as mentioned above, have specified expiration dates.

Put VS Call: What to Choose

Performing market research allows you to make sure whether you want to choose a put or a call. If you predict that the price of the underlying security will go up, then you’d want to choose a call. On the other hand, if you think that the underlying security will lose its value, then you’d want to buy a pull option.

Take in Account Strike Price and Expiration Date

While trading options, it’s also critical to consider the expiration date and the strike price. The strike price is what you lock in your option contract. For example, if you have chosen "call," then the strike price will dictate the rate at which you can purchase the security. In case of a "put," the strike price will indicate the rate at which you can sell the security.

While trading options, you also need to choose the expiration date of the contract. It's actually the duration of the option, and you predict that you'll earn money when it expires. Mostly, the options contracts expire at the trading day end. In the US, for the listed stock options, the expiration date is mostly the third Friday of the month in which the contract expires.

Place Your order

Once you have performed your due diligence and selected the option that you want to buy, then the only thing left is to place your order.

Placing order on Webull Platform

Placing order on Webull Platform

It’s important to double-check all the inputs before placing your order. You can also go to the graph section located at the left-bottom of the "Order Entry" tab. The graph provides you with a clearer idea regarding the profit and loss zones, as shown below.

Placing order on Webull Platform

Placing order on Webull Platform

You can also change the strike price by dragging the green hexagon.

Placing order on Webull Platform

Placing order on Webull Platform

Once you’re satisfied with all the entries and values, you’ll need to click on the “Buy” button to place your order.

Webull Options Fees

The best thing about using the Webull online trading platform is that it doesn’t charge any commission on options trading.

Webull VS Interactive Brokers Options Fees
Properties Webull Interactive Brokers

US stock options

0.0 US dollar

-

US stock index options

0.0 US dollar

6.5 US dollars
(10 contracts commission)

UK stock index options

-

23.8 US dollars
(10 contracts commission)

German stock index options

-

13.2 US dollars
(10 contracts commission)

Is Webull Options Trading Completely Free?

Webull doesn’t charge any fee from its users to perform options trading, and it extends to all the platforms that Webull offers. However, it's important to note that the fee is still applied by OCC, FINRA, and SEC.

Fee Structure Charged by

Transaction

(0.0000051 US dollars) x (Total Trade Amount in dollars (Min 0.01 us dollars) (Sells Only))

SEC (Securities and Exchange Commission)

Option Regulatory

Options Exchanges

(0.0388 US dollars) x (Number of Contracts (Buys and Sells))

Trading Activity

(0.002 US dollars) x (Number of Contracts (Min 0.01 US dollars) (Sells Only))

FINRA (Financial Industry Regulatory Authority)

Clearing

(0.02 US dollars) x (Number of Contracts (Max 55 US dollars per Trade) (Buys and Sells))

OCC (Options Clearing Corporation)

How Much Money Do I Need for a Start?

You can create your Webull account without spending a penny because there’s no account minimum required. But you’ll need an initial investment to start options trading. According to many trading experts, for the most effective options trading experience, you should have at least 3,000 to 5,000 US dollars as your initial investment.

The most advisable way is that it must happen gradually. We recommend you opt for the Webull demo account, where you don't need to pay anything. While you're playing around with your demo account, consider working on your trading strategy. Then you can start with your initial investment and keep in mind that having some extra amount of money brings flexibility. However, you should only invest the capital that you can afford to lose. Currently, the most active contracts for options trading are:

Company Symbol Strike Bid Ask Price

Apple

AAPL

150.00

0.72

0.74

146.39

Tesla

TSLA

645.00

0.70

1.57

644.22

AMC Entertainment

AMC

35.00

0.15

0.16

34.96

Amazon

AMZN

3,600.00

27.00

32.95

3,573.63

Nvidia

NVDA

730.00

3.05

3.85

726.44

Top 3 Options Trading Strategies

There are tons of option trading strategies that you can use to improve your trading experience. Moreover, you can also come up with your own strategy if you want. However, if you're just starting out, then consider using the following.

Single-Leg Option

Single-leg options or simply single options is one of the basic trading strategies. It only has a single leg, and in this strategy, you either sell a single option (with short put or short call), or you purchase a single option with long put and long call.

Vertical

The vertical option strategy involved the buying and selling process of several options at the same time, associated with the very same underlying asset, with the same expiration date and type. However, the strike prices are different.

Covered Stock

In the covered stock options strategy, you write a put or call option, and an equivalent short/long stock position covers it.

3 Tips for Successful Webull Options Trading

If you want to become a successful options trader using Webull, then consider investing your time in learning different option trading strategies. Moreover, it’s also important to understand how the system works thoroughly. Here are some tips that you can use for a head start.

Take in Account Risks

Regardless of your trading style and type, it’s not possible to eliminate the risk factor. However, you can minimize it by coming up with a strong risk management strategy. But for that, you must take all the risk factors into account. Keep in mind that option can be a very highly leveraged instrument, and in extreme cases, you can even lose your entire deposit if the trade goes against you. But a risk management strategy can allow you to minimize your losses, and it's also important to aim for low-risk strategies based on options.

Develop Your Own Strategy

If you're experienced and confident enough, then you can create your own options trading strategy. But for that, you’ll need to analyze the current market state thoroughly. Then you’ll need to make sure that the stocks or market state match your trading strategy.

Learn constantly

In order to become a successful options trader, you'll need to develop sharp skills, and it’s only possible by learning constantly. Bear in mind that successful trading requires good knowledge of trading strategies, risk management, mathematics. Additionally, you must also understand how to perform market analysis and read technical indicators. We recommend you spend most of your time reading and understanding the educational and research material that Webull offers.

So, Should I Try Webull Options?

The simple answer is yes. You can definitely try Webull for options trading because it offers many opportunities and a great trading environment. However, you must also take into account the market risks. Without the required knowledge and skills, you won’t be able to earn profit even by using the best platform. It’s important to note that entering the open market means that you’ll need to compete with professionals, experts, and highly educated traders.

Summary

Options trading can be very profitable, and undoubtedly it brings many advantages to the table. While the rewards can be high, so can the risks. That's why it's important to make sure that you understand the associated risk factors. Another critical aspect of becoming a successful options trader is choosing the right online platform. Affordability, available educational material, and ease-of-use are some of the most important factors, and you can find all of them with Webull. We hope this guide will help you to understand options trading and how to approach it.

FAQs

Why can't I trade options on Webull?

There could be several reasons why you're unable to trade options on Webull, such as not having approval for options trading or not meeting the account requirements. If you're having trouble trading options on Webull, you can contact their customer service for assistance.

Is Webull good for day trading options?

Webull is a popular platform for day trading options, as it offers a variety of advanced trading tools and features. However, it's important to note that options trading carries significant risk and should only be undertaken by experienced traders who understand the risks involved.

How much money do you need to trade options in Webull?

The amount of money you need to trade options on Webull depends on the specific option you want to trade and your trading strategy. In general, options trading requires a higher level of capital than stock trading due to the higher risk involved. It's recommended to have a significant amount of trading capital and a solid understanding of options trading before entering the market.

How do you get approved for options on Webull?

To get approved for options trading on Webull, you need to meet certain eligibility requirements, such as having a minimum account balance and completing the required options trading education.

How long does it take to get my “options account” approved on Webull?

Webull usually takes 24 to 48 hours to review your account, and you get a reply from the brokerage within that time.

Is it possible to trade Webull paper trading options?

No, currently, Webull doesn't support options trading in its paper trading account.

Does Webull support option strategies?

Yes, Webull supports tons of options strategies, and you can access these strategies on both mobile and desktop applications.

What does “options exercise” mean?

In options trading, exercising options means implementing the rights to purchase or sell the underlying security.

Team that worked on the article

Oleg Tkachenko
Author and expert at Traders Union

Oleg Tkachenko is an economist-analyst and a risk manager with a practical experience of working in financial institutions for over seven years. Oleg specializes in the analysis of commodities, Forex, stock markets and non-standard investment markets (cryptocurrency, hypes, peer-to-peer lending). He holds a Master’s Degree from the Ukrainian Academy of Banking of the National Bank of Ukraine, Kharkiv Banking Institute. Oleg became an author for Traders Union in 2018; in 2020 he joined the TU’s team of financial experts.

At Traders Union, Oleg is involved in expanded reviews of brokerage companies, and in monitoring the relevancy of the information provided in them. He analyzes trading strategies and indicators, and prepares educational articles on the topic of finance. In addition, Oleg carries out expert research in the Forex and stock markets, and also binary options and cryptocurrency markets. In particular, he checks brokerage companies, studies their performance and growth, tests new services offered by brokers, software and the level of customer support.

Oleg’s motto: Information is a force that opens boundless opportunities, but requires relevancy!

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.