Is Webull a Scam?
Have you ever thought about opening a brokerage account with Webull? Maybe you’re curious about Webull’s
security and credibility? If so, we have done all the research and have the answers to your questions! You’ll learn about who owns Webull, its background as a company, whether it’s a legitimate brokerage firm, how your money and investments with Webull are insured, and more.
Is Webull Safe?
Webull is the fastest growing discount broker that have appealed particularly to younger and less experienced investors.
As such, many people consider it an alternative to Robinhood, a superior alternative even. Indeed,
Webull offers many compelling features that Robinhood does not, such as advanced trading platform, technical analysis, virtual
trading, and robo advisor. Webull is thus better suited in many ways for more experienced and savvy traders.
That said, Webull has certain downsides, primarily the inability to trade mutual funds, bonds, or foreign stocks, which may deter many investors who want to have a more diversified portfolio with just one broker.
If you’re primarily interested in trading stocks, options, and ETFs, Webull is a very good choice for you, particularly if you want to take advantage of their more robust trading and analysis tools.
You can also take advantage of Webull’s free stock promotion,
which guarantees you at least one stock worth up to $1,000. If you happen to have a lot of friends interested in joining Webull, you can refer them and get free stocks too. And hey, you might just get lucky. (But you should know that most of the shares are not worth much.)
Webull continues to update its app, and has numerous upgrades, including the following:
Learning Tools – There’s information now accessible for additional insight into your investment choices
Message Center – Messages can now be customized so that you can organize information more effectively in different categories
New Account Homepage Design – This page allows for easier access of information
Financial Report Analysis – There’s now detailed financial information available visually so you can make faster, more informed decisions
Another cool feature is that Webull provides investors access to upcoming IPOs (initial public offerings). There’s a minimum $100 account balance and $100 minimum order for these offerings, however.
Is Webull Legitimate?
Webull Financial LLC is regulated by the U.S. Security and Exchange Commission (SEC) and incorporated in the state of Delaware since 2017. Their Reporting File Number is 008-69978.
Webull Financial LLC is also registered as a brokerage company with FINRA and its CRD# is 289063.
Webull does not have any disclosures there, which is always a good sign!
In short, Webull is a legitimate brokerage firm, with a focus on making investing accessible for new investors in particular. Webull had grown to over 20 million individual customer accounts.
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Is Webull Secure?
In terms of cybersecurity, Webull unfortunately does not have this information on their website. Nonetheless, it would be extremely surprising if they don’t use industry-standard encryption to protect customer data.
Is it Insured?
As for protecting your money, you are in good hands with Webull as it’s a member of SIPC (Securities Investor Protection Corporation). This means that your securities are covered up to $500,000, including up to $250,000 for cash claims. The broker's clearing firm, Apex Clearing, also maintains an additional insurance policy for securities and cash up to $150 million in total, with maximum limits of $37.5 million for any one client’s securities and $900,000 for cash.
So, thanks to SIPC coverage, your cash and securities are as protected with Webull as with any other
major broker. In fact, possibly even more so because to their additional insurance through Apex Clearing.
Also, as Webull is not a bank, it is not a member of the FDIC, which insures client deposits in American banks.
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Wrapping up: Is Webull a Scam?
All in all, Webull is not a scam. Although relatively new as a broker compared to many more established players, your money is protected and insured through standard financial insurance (SIPC).
Webull is a good option, particularly for intermediate to advanced investors. It can also help newer investors learn a lot about investing thanks to their educational resources and robust analysis tools.
Ultimately, if you begin investing with Webull, you can rest assured that your money is as safe with them as with any other broker-dealer out there, thanks to the SIPC coverage for your investments and cash holdings in your investment accounts.
2024 Webull Review
As we have already seen, legitimacy does not necessarily translate into a good experience. We need to dig deeper and see how Webull performs in specific areas.
Investment Products
Webull provides self-managed trading in the following asset classes:
- Stocks, including over-the-counter instruments
- Option contracts
- Exchange-traded funds
Although foreign stocks are not part of Webull’s equity offering, ADRs (American Depository Receipts) and REITs (Real Estate Investment Trusts) are.
Webull does have a registration as an investment advisor, and offers robo-advisor accounts.
Webull only offers a few tax structures for investing, such as retirement and individual taxable. It does not have joint, custodial, or trust accounts.
Customer Service
Webull customers can reach out for help using the company’s service email address (customerservices@webull.us). This option obviously is available 24 hours a day, 7 days a week. During the week from 9:00 am until 4:15 pm, EST, phone service is also available. During our testing of it, we have on occasion experienced long wait times, but it may be worth a shot. The number is (888) 828-0618.
Webull’s website has a help section that contains many FAQs (frequently asked questions) that customers may find helpful. The website also contains a few self-help features, like a funds transfer tool and widget to download account documents. And there is an internal messaging widget on the website trading platform (look for the “Contact Us” icon in the left-hand column).
Webull is an online-only brokerage firm. As such, it has no branch locations.
Webull Pricing
Webull is going to do a very good job here. The brokerage house
charges zero fees on its accounts.
There is no charge to open, close, or maintain an account. There is no minimum deposit requirement to get
one open, and there is no ongoing minimum balance requirement, either.
Trades of securities at Webull
generally carry no commissions, and options have no per-contract fees, either. Exercises and assignments are free, too.
There are a few exceptions to the zero-commission rule. For example, F-shares are $5 per trade on the buy side and $0.05 on the sell side. Trades of penny stocks (defined as less than $1 in market price) consisting of more than 100,000 shares cost 0.02¢ per share. There is a maximum commission of 5% of trade value on these transactions.
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Website
Trading securities is fairly easy on Webull’s website. The website itself only has account management tools, but clicking on the Trade tab in the top menu generates a trading platform in a discrete browser tab.
The platform has some really useful features on it that we have to mention. Charting is on a high level with lots of tools. A right-click menu has the following choices:
- New Order
- New advanced order
- Add to watchlist
- Create alert
- Drawing tools
- Gap
- Notes
- Reset chart
The regular trade ticket (the “New order” one) delivers several features. Margin accounts will see an orange button for sell short, and the quantity field offers a percent of account value, a very unique item. Bracket orders create the possibility of day trading.
The advanced order widget offers the most advanced trading experience with OTO (one triggers the others) and OCO (one cancels the others). It’s possible to add multiple legs to an order, too.
Mobile App
Besides its robust website, Webull has a pretty good mobile app, too. The software loses the advanced order ticket but it has two others: the regular one from the website and a big button ticket that is useful for quickly sending orders to the exchanges.
Although the overall experience is fairly similar, there are some important differences. First of all, the mobile app has social networking. It’s possible to make posts on individual assets, follow other users, like or dislike a post, reply to a post, and repost one.
Then there is the Promotion Center. Found under the Menu icon, this section frequently has all sorts of stock bonuses for performing a variety of activities. Webull customers should definitely pay attention to this section.
Finally, options trading is more advanced on the mobile app than on the website. The website only offers trading in calls and puts, but the app has integrated spreads with descriptions of them. Examples include:
- Iron condors
- Butterflies
- Straddles
- Collars
Tapping on the spread’s name on the order ticket generates a pop-up window with profit-loss diagrams.
Webull’s mobile software can be used on a tablet for better viewing.
Other Software
Webull doesn’t have a smartwatch app or API. It does have a very good desktop platform, though. During our test drive of the software, we really liked full-screen charting with lots of graphing tools. Examples of technical studies include:
- Average directional index
- TTM Squeeze
- Aroon oscillator
Then there are multiple layouts. It’s really easy to create a new one underneath the main menu, which is represented by the top-left icon. A custom name can be created for each layout, and there is no maximum number that can be created.
Of great importance on the platform is the very useful stock screener. This can be pulled up by clicking on the Screener icon in the left-hand menu. Some foreign exchanges are available, although only American securities can actually be traded. There are many other search criteria, and a particular scan can be saved.
Finally, the platform has a paper-trading icon, which is a great resource for practicing the software without risking real money. (The other two platforms already investigated also have simulated trading.)
Margin Borrowing
Webull customers can open individual taxable accounts in either cash or margin mode. It’s possible to open a cash account and later upgrade it to margin status. This requires a $2,000 account value first, however.
Webull’s software shows margin requirements for individual stocks and funds. Examples of margin details include overnight leverage and maintenance requirement.
Webull offers 4:1 day-trading leverage on stocks and non-leveraged ETFs. It does not offer portfolio margin at this time.
The cost of trading with other people’s money at Webull is fairly reasonable based on the current environment of high interest rates.
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Debit Balance
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Webull Margin Rate
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under $25,000
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9.74%
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$25,000.01 - $100,000
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9.24%
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$100,000.01 - $250,000
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8.74%
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$250,000.01 - $500,000
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8.24%
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$500,000.01 - 1,000,000
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7.24%
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1,000,000.01 - 3,000,000
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6.74%
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>3,000,000.00
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5.74%
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Miscellaneous Services
Cash Management Features: Webull offers an impressive
5% APY interest on cash balances–much more than all banks.
DRIP Availability: Webull offers automatic dividend reinvesting.
Initial Public Offerings: It’s quite easy to get in on upcoming IPOs at Webull (look for the IPO Center on the Markets tab on the mobile app).
Extended Hours: Pre-market and after-hours trading are both available
(total hours are from 4:00 am, EST, until 8:00 pm). Webull does not offer overnight trading in any ETFs.
Fractional Shares: Equities can be purchased using whole dollars.
Individual Retirement Accounts: Webull now has IRAs. There are two types available, Roth and Traditional, although Webull only allows one type per customer.
Recommendations
ETF and Stock Trading: Webull is certainly a very good choice for active equity trading. We especially recommend using its desktop platform, which has some really good research tools, such as news articles and analyst ratings with price targets.
Retirement Savers and Long-Term Investors: We can defend Webull for its no-fee IRA service.
Beginning Investors: Webull is a decent place for novices, thanks to robo advisor and demo trading on all three
platforms.
Small Accounts: Without any fees or account minimums, Webull is an excellent choice for small investors. Fractional-share trading rather than whole-share trading brings the trading minimum to $5 or less.
Webull Review Judgement
Webull is a legitimate company with lots of trading services. Despite the strength of its software, there are few costs involved with trading here, which makes us like this brokerage firm all the more.
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Updated on 4/3/2024.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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