How Does Webull Make Money? 7 Ways Webull Makes Money in 2021

Introduction to Webull

Not everyone who trades or buys stocks is a stock trader. When you think of stock trading, you might think of influential investors working on Wall Street. However, trading can be done by anyone. Stock trading is when you sell and buy stocks to capitalize on the different prices of the stock. You’re essentially betting that the stock you chose will yield a return for you in a day, month, year, or the following decades. To trade, you need to use a reputable broker platform to trade and sell stocks, like Webull.

Webull was founded in 2017 and is regulated by the SEC (U.S. Securities and Exchange Commission) and FINRA (Financial Industry Regulatory Authority). It offers competitive features to users, including discounts and zero-fee services. Webull offers free access to various services like cryptocurrency, short selling, options trading, domestic stocks, IRA’s, trading on margin, pre-market and after-hours trading. Webull is considered relatively safe to use because of the amount of regulation over the platform and its half a million-dollar investor protection.

Ways Webull Makes Money

1. Webull’s Referral Program

In today’s market, companies don’t have to spend millions of dollars to acquire their customers. Instead, all they need is an excellent referral program, word of mouth, and a social media platform. Webull capitalizes on this program by offering two free stocks to anyone who opens a new account, and two free stocks to the person who referred their friends. This works well because it provides incentives for both parties to participate in Webull.

Webull makes it easy to create a referral link and share it with friends. The sign-up process only takes a few moments, and once the person has finished registration and deposited $100 into their account, both parties receive two stocks. The more people that are referred, the more users Webull gains on its platform. It’s an inexpensive way for Webull to grow its platform and make more money.

We’ll help you get to know more about Webull Referrals or you may directly use this Webull Referral Link to sign-up.

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2. Webull Offers Paid Subscriptions

One of the easiest ways Webull makes money is to offer paid subscriptions to view premium information on the global market. Basic data has always been and will always be free with the platform. However, when users first sign up, they receive a free trial to see higher level quotes. After their subscription expires, they must pay the monthly subscription fee to gain access to this information. Traders will find it valuable because it helps them find the best bid and offers on NASDAQ while offering multiple tools and analytics to make informed decisions.

3. WeBull Collects Interest on Cash Balances

Webull makes money from the interest of cash balances held in users’ accounts. Webull will loan out the cash that is sitting in their user’s accounts to other financial institutions, like banks, and charge a small interest on that cash. When the money is repaid to Webull, they will keep the interest from that loan as profit. This is similar to what your local bank or financial institution already does to make money on cash balances. It’s a safe and commonly used procedure to create income.

4. WeBull Collects Money From Order Flows

Webull collects money by directing the flow of your orders. When you sell or purchase an order, Webull has to choose a market participant to send the order to. Market participants want Webull’s business because of the high number of trades that occur on the platform. While Webull does not charge its customers any fees to trade, it instead charges market participants. Webull only charges a fraction of a cent for each order flow to their market participants. However, with the volume of transactions that occur each day on Webull, the amount of money they make can quickly add up.

5. Webull Collects Margin Fees

A popular strategy investors will use is called buying on margin. In this process, you can obtain a loan from Webull to buy additional ETF’s or stocks. Usually, Webull will match whatever you put in. For example, if you decide to invest $1,000, you could potentially be loaned an additional $1,000 from Webull. This loan comes with interest, and if you don’t pay the interest, the stocks you purchased can be taken from you. The money Webull makes will either be on the interest rate or from the stocks if the interest is not paid back. The current rates for these loans start at 3.99% but can change depending on what is happening in the market.

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6. WeBull will Charge Withdrawal and Deposit Fees

ACH transfers are free through the Webull platform, but that’s not always the route investors will use to transfer money to and from their accounts. First, if your ACH transfer bounces back, Webull will charge $30 per bounce. If you need to wire funds into your account, domestically or internationally, be prepared to face a hefty free. Wiring in funds domestically will cost $8, internationally will cost $12.50. If you’re looking to withdraw via domestic wire, expect a $25 charge or a $45 charge if it’s international.

7. Webull Collects Short Seller Fees

Similar to loaning out cash to other institutions, Webull will loan out shares to short-sellers. When the stocks are sold, they keep the interest that was paid back to them. Loaning out shares is a safe and commonly used procedure that most financial institutions and brokerages use. However, Webull will make extra money from this type of loan because they will charge interest to sellers on a daily basis until the stock is sold, which can quickly add up.

Is Webull Safe?

To determine if any trading platform is safe for you to use, it’s essential to check the background of the broker and how you are protected if something was to go wrong. With Webull, the platform is regulated by the SEC (U.S. Securities and Exchange Commission) and FINRA (Financial Industry Regulatory Authority), which sets the standard and rules for how a platform can operate.

Your money is also protected with SIPC, which stands for the Securities Investor Protection Corporation. SPIC will protect against any loss you may incur if the broker goes under or cannot continue business for any reason. The limits are higher than most other investor protector programs, with a limit of $500,000 per person.

However, not everything is protected by the Securities Investor Protection Corporation. The Securities Investor Protection Corporation will generally cover things like mutual funds, funds, stocks, notes, and other investment company shares or securities. However, it does not protect any currency, fixed annuity contracts, interests in gold or silver, unregister limited partnerships, or unregistered investment contracts. If you fall into any of these categories, it’s important to note that you’re not covered.

Is Webull Good for Beginners?

Webull is an excellent platform because of its variety of functions and capabilities that can help traders along their journey, including:

  • Live Market data which can be customized to see different regions, countries, cryptocurrencies, and global markets.

  • Supported on a variety of platforms such as Andriod, Mac, Windows, or iOS

  • Tutorials, Recommendations, and tons of resources to update you on the market and how to use specific tools or features of the application.

  • Free trades and options with no fees or commission charged.

  • Paper Trading to practice your trading skills and strategies without losing real money.

While the paper trading feature is excellent for beginners to learn about trading and try out different strategies, it will take a bit of time to learn and feel comfortable on the platform. The Webull platform is great for intermediate investors who understand how to read charters and stock screens or active investors who have a portfolio smaller than $100,000.

Is Webull Worth It?

If you’re looking to trade outside of the United States, you should look elsewhere. Webull only supports United States options, ETFs, and stocks. When you’re outside the United States but want to trade on the market, you can create an account. If you cannot attach your bank account to ACH transfer your funds, you’re looking at some hefty fees to wire transfer money into and out of your account. And when you’re unfamiliar with the wiring process and need customer support, Webull is limited in that avenue.

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Webull makes it easy to trade Options, ETFs, and U.S. stocks without paying out any commissions. The platform is easy to use and well-structured, so you can find the information you’re looking for and analyze the current market before investing your money into a trade. With constant updates and live market information, you’re always in the know.

Opening your completely digital account is easy and fast to do with just a few clicks. You can open your account sitting on your couch or on a long car ride. If you’re looking for an easy way to trade smartly, Webull should be a consideration. Plus, if you sign up using a Webull referral and deposit at least $100 into your account, you’ll receive two free stocks!

There are a lot more you should know about Webull. Read our Webull Review to know the Webull fees, pros and cons, trading platforms, and many more.