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Sunday, September 27, 2020

Webull Review

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Webull Review

Webull is an American fintech company.  It is a company dedicated to traders that come from the United States, China, and India. However, it focuses solely in United States trade markets. The most important feature that we can mention in the introduction is that it is a zero commission brokerage service.

Short evaluation

Before starting the analysis of this broker in depth, we usually summarize some pros and cons as an introduction.

in the pros we can mention that it has a very good trading platform in the web, in the mobile application, and in the desktop trading platform. Also, that it is very easy to open an account being the process fully online. Also, we can mention as the most important advantage of this platform that you can trade stocks and ETFs commission free. Likewise, there are no maintenance fees or inactivity fees of any kind, so no indirect trading fees either.

Among the cons however we can mention that there is a very poor customer service and we will go more in detail into this when we reach the paragraph about customer service.

There is a clear limitation in the available range of products that you can trade with. Furthermore, as with many of its competitors you can only perform deposits to your Webull account through wire transfers. Thus, it is not possible to perform this deposit through any sort of electronic wallet, debit card, or credit card at all.

Fee structure

more pros than cons we find in the fee structure of Webull.

As usual we study the structure fee making a split between the direct fees and indirect fees.

The direct trading fees come up when you perform a trading operation. There are many examples and the most typical example is the commission for an operation. There are other direct trading fees that you are obliged to pay that are overnight rates. These overnight rates oblige you to pay if you sustain a leveraged position for more than a trading day: the broker is lending you money.

On the other hand, the indirect trading fees are fees that are not directly related to the quantity or to the type of the operations. Instead, they are related to the contractual relationship you have with the brokerage party. A typical example is the obligation to pay a monthly fee, a fee due to inactivity of the account after a certain amount of time and another example is if you have to pay an annual fee for administrative expenses. An example of a monthly maintenance fee in a broker are the $5 you have to pay per month to maintain The Robinhood gold service. Another example is in banking services when you have to pay a maintenance fee for a secured credit card, with independence of how much you have utilized the credit card.

Pros

You do not have to pay commissions for the trade of ETF and stocks that are based in the United States. As part of the indirect trading fees in Webull you are not charged for maintenance fees for fees in virtue of the inactivity of the account

But there are cons also and we have to mention them

Cons

There is an overnight charge and you incur in this charge when a leveraged position is sustained after more than a trading day. These financing rates are important and depend on a tier based on the volume off your debit balance. It ranges from 4% to 7%. If you have less than $25,000 in your debit balance it will be 7%. If you want to operate in leveraged positions, feel free to do it but know that you have quite high interest rate for this.

There are also fees for the bank transfers that are performed from the bank to your account to utilize the service. As usual it is more expensive for deposits outside the United States than for deposits that are coming inbound from domestic financial institutions. Transaction fee is $8.00.

We mentioned that there are withdrawal fees for each domestic transfer so if you transfer from your Webull account to your bank there is withdrawal fee of $25.In this sense it is exactly like with Tastyworks where you also have to pay $25.

Account opening

the advantages of opening an account in Webull is that it is done quite fast. Probably it is one of the fastest brokers to open an account. The process is quite straightforward. Likewise, there is no minimum deposit, and this is an advantage because you can really start trading was just a few dollars and you’re not obliged to perform a deposit that initially would be a lot of money.

With that said, let me put clear that the previous statement was for cash accounts. With margin accounts it is different.

If you are going to do operations with margin accounts, you must introduce a minimum deposit. This margin account requires a minimum of $2000. In the margin account, as you know already, you are performing trading operations with money that you are borrowing from the brokerage service you trade on leverage.

As it was the case with Tastyworks, in Webull you can work with cash and margin accounts.

However, there are a lot of limitations here that you do not suffer with some of the Webull´ s competitors. An example can be Tastyworks, because in Webull you cannot open a corporate account, a feature possible in Tastyworks and is possible in other brokerage services too. Furthermore, you cannot open joint accounts or custodian accounts in Webull.

The major issue that I find in relation to registration of new customers, is that Webull is accepting only investors based in the United States, India and in China. This is a great limitation for the opening of international accounts as international investors would be looking for brokerage services elsewhere. In a comparison with Tastyworks, the majority of the countries were accepted in the platform but here there is a strong limitation to only those three countries.

Let’s see now what you have to do in order to open an account with Webull.

Verification of the account opening is very fast, and it took just a business day. The environment where you can open the account is as usual your computer desktop, the application in your cell phone, and the web application. Later on, we will go to these three different environments where you can work with Webull and we will analyze them with a little bit more detail.

You will see that very often I suggest downloading the client of the brokerage service in this case we bull install it in your computer and operate from there. This is not the exception. I will recommend you to install the desktop application. Go to the menu called “Account” and where it says Login instead of logging in, you will go to the option of “Sign In”.

As is typical when you register with a brokerage service you must inform some personal data about yourself. You must declare also your Social Security number. If you are employed, you must declare this employment status and because of financial compliance regulations, you are asked to declare which is your knowledge of finance.

In the same form you must upload a scan copy of your passport or any valid identification document that you have depending on the country. These countries are China, India and United States.

To finish the application registration, you must choose the account type. if you want to start with zero deposit you must select the option” Cash account”. Margin accounts are different and here is where you have to perform a deposit of a minimum of $2000.

Deposits and Withdrawals

These functionalities are not good in Webull. The investor can only use a wire transfer option the currency utilized are only the dollars of the United States. Also, this bank transfer charges a high fee and each time you do a deposit you have to pay this fee.

Let’s see now with some more detail the pros and cons in regard to the process flow of deposits and withdrawals.

The currency for the operations in Webull is only US dollars. This is a problem for foreign operators because even if you will do an equivalence in your local currency to know how much you are investing, what does not seem a big issue, there is another problem with this that I will explain you now.

The problem to work only with one currency is if you are a foreign investor. That is, you are for example from a country that does not use dollars in your bank account.  You will have to perform the payment of a fee for the conversion of the currency from, to put an example the currency from China, to the currency of the United States and vice versa.

But if you anyway want to operate with Webull despite this unfortunate requirement, you can sort this out in the following way.

You can open in companies like TransferWise or companies like Revolut what is called a multicurrency bank account. Opening this account is very easy and we have studied this in two different articles discussing about Revolut and about TransferWise.

This is a very good option that you have because if you want to operate in dollars and you come from a foreign country, you will open in one of these two companies I have just mentioned you, an account in dollars and you will operate from that account. Therefore, you do not have to pay conversion fees each time you do a deposit or withdraw funds from Weebull. You will be, for example doing a withdrawal from Webull to your associated multicurrency account in Revolut.

Now let´s continue with the deposit flow. Unluckily with Webull there is a deposit fee. When we analyzed Degido, Tastyworks, Interactive Brokers, and also Robinhood, this was all free but here with Webull, you have to pay $8.00 when the wire transfer is coming from a local American bank.

With Webull, and also with the Webull competitors, you have to associate your bank account with your Webull account before doing any kind of deposit into the account you have just opened. This is very logical and is similar to the situation with Robin Hood, Tastyworks. The customers that are residing outside the United States can use only the bank transfer to do these deposits.

Let´s talk about withdrawals. About the withdrawal of money from your Webull account to your bank account it takes one day until you can have the funds available in your account. This can be done in just a few clicks from the trading platform.

To do it, go to the Home menu select the option to withdraw funds and there select the option “transfer to my bank” and write down the quantity you want to withdraw.

The process begins in the background and you will have to wait one day until the funds appear available in your bank account.

User experience in The Platform

We will analyze separately the three different platforms that are available in Webull. These are the web application where you work online in your browser for example, I used Google Chrome browser. The second possibility is to use a mobile application that you can download and Android store or Apple iOS. The third possibility, and the one I recommend is to work in the desktop platform where you have to download and application client to your Mac or Windows based desktop computer.

Web trading platform functionality

The web application that you have to go to an URL then you log in and you work in your browser. I used Google Chrome browser and the functionality is like a software as a service or SAAS.

The user experience there in the web browser is very favorable and beginners will not feel intimidated by the environment. So, if you compare it with Tastyworks you will see that the platform of Webull is much easier to use.

The platform is available also in Chinese considering that China is one of the countries from where customers may arrive, and this is an advantage in comparison to Tastyworks also because that platform is only In English language.

The same as Tastyworks, to compare it with a similar dashboard, it has different panels. You have two panels in the borders one in the left and one in the right we certain tools and in the middle is your main workspace.

You can customize this workspace very easily and only leave in the dashboard the functionality that you are really using in your operations. This is a feature that we did not enjoy with Tastyworks where in the web version of the trading platform we had very little customization options and in my opinion the screen looked more cramped.

The login is only one step. There is not just step authentication in we will web based platform. And unluckily this is something that we are seeing very often in many brokerage services.: the lack of a 2-step authentication authorization process in this environment.

I always like to consider the search functionality because the way I work is by going to the search box and there I search a company by its name or by the ticker.  When I find it I simply select it and work with it. I was struggling a lot with Tastyworks because that search functionality did not allow me to filter well. However here with Webull, I did not have any issue to search and filter.

Order management

There are several types of orders that you can place.

  • Limit
  • stop
  • Stop limit
  • Market
  • Bracket orders

I have an article where I provide a good explanation of what these other types are. This is something that you need to know when you perform an order. If you are going to do trading, you have to be very good at order management so you have to be knowing all the order types that exist and how can they be useful for your interests.

In regard to alerts that you can set up there are options in Webull that you can use. Go to the search functionality we mentioned above. There you search the stock in the search box and when you find it there is a small bell icon. Just click on the Bell and you will be prompted to declare which kind of information you want to obtain in the future notifications

Mobile trading platform

Webull has probably the best of all the mobile trading platforms that we see in the market. Another good one is the Robinhood application, but both are addressed to different profile of investors.

You can download this cell phone application in Android and Apple iOS. As with the web application you can select which language you want to utilize. You have only English and Chinese.

At least in the Apple iOS application that is the one I tested you have a two-step login available. I am glad to find this feature, and this is something that we missed in other platforms. For example, in Tastyworks we always had only one step login.

With the search functionality I did not have any problem either. I could search, filter and select the asset without difficulties.

About the placement of orders, it was exactly like in the web application the process is very straightforward, and no difficulties were found.

Desktop trading application

This is my favorite. Anyway, you will find that I have a tendency to favor desktop applications from my previous reviews because I appreciate the additional real estate workspace that is available in a larger screen.

You can download the trading platform for your desktop it is available for Mac and for Windows you have also two languages that are English and Chinese.

You have the same variety of choices to perform orders as you have the same order types available that we discussed for the web application.

Very good and very similar to the web application, I find the desktop platform much better because you can customize very well the dashboard, select how you want to organize your workspace and how you want to customize your charts. Likewise, you can dismiss functionalities that you do not need.

And Luckily i did not have at this step authentication in the desktop platform and one of the things I would suggest weebl to improve is to have a 2 step authentication also in the desktop application.

Availability of product portfolio and market range

The range of products available in Webull is really very limited because you can only trade with American stocks and ETFs. You can forget about cryptocurrencies, futures, options, bonds, funds, and Forex.

Quite different is this with other competitors like Tastyworks, where you could operate with options and futures very well as the platform specialized in that.

Also, in comparison with Robin Hood you will miss the functionality of Robinhood that you could operate with cryptocurrencies.

So, we will be limited in Webull to ETFs and US based stocks. Quite limited in my opinion in the product range.

If you want to cover more product range and also cover other stock exchanges in different countries you will have to go to Degiro, Fidelity or Interactive Brokers that they work internationally very well.

If you are an American resident who wants to operate domestically with stocks, then Webull is fine for you.

Online information, research and educational resources

Webull offers for free several tools that will help you to research. I find them user friendly and available in all the three platforms:  In the web, in the cell phone application and in the desktop platform.

There is access to information from companies like Reuters, Bloomberg or Yahoo Finance. I found more news and research tools in Tastyworks and in Robinhood. In the latter you had to pay the $5 per month to access to Robinhood gold tier.

There is fundamental data for the stocks and ETF’s for the last five years. There are some charting tools but I find that the customization is limited for some user profile that have specific requirements regarding technical indicators . So, it is OK for the majority of the users but some of them will have problems in the customization of the charts.

Likewise, you have access to information about stocks in the Indian and the Chinese market. This information is not necessary inside the platform because in Webull you can only operate in US markets and by the way, only in stocks and a ETFs.

There is a demonstration account available. In my opinion this is one of the most important features that beginners and experienced traders need to have when they are working with a brokerage service. The beginner, because part of his learning is to perform operations within the demonstration account. The more experienced trader also requires the demonstration account so he can understand how easy and how customizable the dashboard and the workspace are.

But despite the demonstration account, the educational resources are not sufficient in this platform. There are no tutorials and no videos. In comparison with Tastyworks you have there a complete channel that is live during trading hours and many videos, some short, some long that are tutorials about the trading platform and about online trading in general.

In Webull, there are no tutorial videos about the platform and no educational resources about online trading in general. Here Webull could satisfy many beginners who want to start trading and would be more engaged with the Webull platform if they would have had availability to educational resources and tutorial videos.

There are some articles available also, but I find them very generic and are not updated frequently.

Customer service

Customer service for many investors is the most important part of the features that they consider when they select a brokerage service. And here I find the customer service in Webull that is not good.

Let me tell you why. There is no office or physical location where you can go. In cases like Fidelity or Charles Schwab you have physical locations to go and obtain a person-to-person customer service. This itself is not a big problem because most of the brokers have only online presence nowadays and anyway you can enjoy very good customer service even online. I am thinking now in Tastyworks and Robinhood brokerage services. Both have very good customer service despite the absence of any physical location to serve current and prospective customers.

The email service was very bad we did not receive any response to a very simple question regarding order management and types of orders available. Another question was simply if there are operations with futures and options available (there are not).

There is no telephone service available and so you do not have any kind of customer service that can answer you quickly.

There is nevertheless a message center within the platform where the answers were good and relevant. As I always do, I ask a simple question and a more technical one, and they were answered quite well inside that so-called “Message Center”.

Message Center, contrary to the support services from many competitors like Tastyworks, is also on the weekends, outside trading hours of course.

However, overall, the customer service is not good because sometimes you want to talk to someone, or you want to have a support answer by Mail because you need evidence of the response that they provide you. Therefore, the message center even if it is very good is not enough as the only channel to receive support. I understand that you should have available a telephone number or an email at least.

Regulatory protection

As is typical in the brokerage services we usually review, Webull is registered and regulated by the SEC and by FINRA. We discussed about the SEC and FINRA in other articles. You have to know that the SEC is the Securities and Exchange Commission and FINRA is the Financial Industry Regulatory Authority and Webull is registered in both acknowledged recognized and regulated by these two federal agencies.

There is an investor protection thanks to an investor protection scheme of half a million dollars and this includes a quarter million for cash. Webull offers security as it is registered and regulated properly.

We will does not have a banking license. This should not worry you because it is registered in the SEC and in FINRA and this is sufficient for a financial institution like Webull.

There is a negative point here because Webull is not providing negative balance protection. If you want to know more about the negative balance protection, we have an article where we explain what it is and what you need to know about it.

Conclusions

There are some drawbacks in Webull, not all is excellent with them. First of all, the range of product portfolio is very low (stocks and ETFs) and also is low de availability of markets. This is because you can only trade with stocks of the United States market and ETF’s. This is little in comparison with the most important competitors.

Also is negative that the customer service is only available inside the trading platform in the message center and you do not have any telephone number to call or any email because I tried the email and no reply at that time.

But the good thing is that it is very easy to open an account, it is very fast, and you can open accounts without any kind of fee. You have a demonstration account to start getting familiar with the platform and this demo account is very good. Furthermore the dashboard and workspaces are excellent in all environments: mobile, web browser and client for your desktop platform.

Therefore, as it is so easy to open an account, start trading stocks and ETF’s without commission and with a demo account to test the platform, I suggest you try it and register using the link below.

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