Does Webull Make Money? Yes, Here’s How:

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Most of you have probably heard of Webull, but for those of you who haven’t, Webull is one of the closest competitors to Robinhood. Like Robinhood, it is a FREE trading platform that charges no commission fees for transactions that take place on its platform. It is currently only available to residents of the United States. 

Since trading on Webull is completely free, you might be wondering, “Does Webull Make Money”? The answer is yes!

If you’re interested in knowing more about Webull, we have an entire Webull review where we go over everything you need to know about Webull. In that article, we briefly touch on how Webull makes money, however, the number of ways in which Webull makes money requires a detailed explanation, all too long to fit into a Webull Review. 

Thus, in this article, we will be taking an in-depth approach to analyzing how Webull makes money.

Paid Subscriptions

When customers join Webull, they automatically start off on a free account. In the regular free account, you have access to on-the-minute market data from any company in the US.

However, sometimes US market data is not enough. Sometimes investors are looking to put their money to work outside the borders of the United States. Thus, these investors would be looking for global market data.

For these customers, Webull offers a paid subscription to access on-the-minute global market data. This is a monthly subscription that ranges from $2.99/month to nearly $60/month for some data resources. If you access global data with a free account, the data you are seeing is lagging by about 15 minutes. Hence the example below.

webull data lag notification

Again, this only applies to market data outside of the US. All the data provided for US markets is 100% FREE

Interest On Uninvested Cash

Webull makes interest from the uninvested cash in its users’ accounts. Some brokers, like Robinhood, pay part of the interest they earn to customers on their uninvested cash, Webull does not. Most people invest the majority of the cash they have in a broker and leave a very small percentage as uninvested cash. 

Although this may not seem like a lot, the amount of uninvested cash really adds up once you multiply it by the number of users that Webull has. Webull makes money on this cash by lending it into short-term funds or money market accounts that pay small amounts of interest.

This is a practice followed by every brokerage around, it’s nothing new or different for brokers to do this with uninvested cash. And don’t worry, your cash is safe. This money is insured up to $250,000 by the SIPC. If something were to happen as a result of mismanagement, this cash is safe.

Margin Interest

A popular investment strategy is buying on margin. This isn’t particularly something I’m personally a fan of, but many traders out there use this strategy. If you are unfamiliar with this, this is simply when an individual investor borrows money from a broker to buy investments. The securities (stocks, ETFs, etc.) that the investor already owns on the platform serve as collateral for the borrowed money. Webull charges interest fees to trade on margin staring at 3.99%.

Trading on margin is not something you have to do when using Webull, you can always open a regular account and simply invest with money you actually have. 

Directing Order Flow

There are a number of different market makers or exchanges that Webull can send orders to whenever a customer makes a transaction. 

The way this works is whenever you buy or sell a security, Webull directs that order to a specific market maker. These market makers may pay Webull fractions of a cent per share that they send to them, instead of a different market maker. 

Although this may not seem like a lot of money, in a large trading platform like Webull, these fractions of a cent add up with the large volume of transactions!

Short Selling Fees

Short selling happens when a short seller borrows a stock, sells it, then buys it back (ideally at a smaller price to make a profit) to return it to the lender. Webull lends this stock to short-sellers by borrowing it from its users. Again, this borrowed stock is SIPC insured (in this case up to $500,000), so it is safe. 

When Webull lends this stock to short-sellers, it charges a fee for borrowing the stock of the said company. The rate of this fee varies by conditions in the market.

Other Fees

  • Deposit & Withdrawal Wire Fees: Depositing money via domestic wire transfer costs $8 for incoming money and $25 for outgoing money. International wires are $12.50 for incoming, $45 for outgoing. Please note, wire transfers are different from the usual ACH transfers, these are FREE.
  • ACAT Fee: Webull charges a $75 fee for outgoing transfers to other brokers, but not for incoming money from other brokers.
  • Passing On Regulatory Exchange Fees: Brokers that charge a commission don’t usually pass these regulatory exchange fees because the commission fees themselves cover them. In the case of Webull, these are passed to the customer because there are no commission fees to cover them.Below is a list of the regulatory exchange fees.

  • ADR Fees: Webull passes on fees to the customer for holding ADRs. If you are unfamiliar with ADRs, they stand for American Depository Receipts. An ADR is a certificate issued by a U.S. depositary bank representing a specified number of shares of a foreign company’s stock, this certificate’s value is determined on the basis of the custodian bank where the brokerage sends the shares. 

The ADR trades on U.S. stock markets as any domestic shares would and offers investors a way to purchase overseas stock that would otherwise not be available to them. There are usually fees charged by the bank to the brokerage for the ADRs, this is the fee passed to the investor using ADRs.

Conclusion

Webull offers a creative way to provide customers with an easy-to-use free platform to trade on. The additional paid features they offer are a great way for them to make money. Webull also follows the same practices as other investors to make money, collecting interest on uninvested cash, earning micropayments for directing order flow, and charging for loaning shares to short-sellers are all practices followed by many other well-establish brokers.

As Webull continues to grow, it continues to improve. These improvements are what have made Webull so popular in such a short amount of time. Let’s also not forget the generous incentives they provide for investors simply for signing up for an account

If you have any questions about Webull or would like to share your experiences with Webull, please leave them down in the comment section below! I would love to read about what you all have to say about it!


Spread the wealth!

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32 Comments

  1. Must admit the trading platforms are quite new to me – but it is a topic that is catching my eye more and more and I’m considering looking into it in greater depth. Sadly I note that it is only available in the US. I am based in the UK and wondered if there are any platforms that you can recommend for me as a newbie? I like that this platform looks quite user friendly so perhaps a similar UK platform? It is always challenging knowing what information to follow and trust.  

    1. Yes, unfortunately, it isn’t available outside the US. Two that I know of that could serve as alternatives are eToro and Freetrade!

  2. I like that you break down the various ways Webull makes money.

    Do you think global market data or US market data like Webull is better for someone who is just starting with trading?

    The way you broke down the various fees is very helpful. Sometimes it is easy to overlook and glance over math but you display it in an easier-to-read format which was SUPER helpful. 

    Do you think that Webull is a reliable source to trade on?

    1. Of course 🙂 and I think for someone who is starting to trade and is new to it, start with paper trading before anything. But if you’ve already been through that and you’re pretty well educated on trading, start off with what you know here at home. US market data should be good to start off with, unless you really want to trade with international companies

  3. Thanks for a comprehensive review of Webull! When I first read that it doesn’t take charges on any transaction that occurs within the platform, I began to wonder how Webull makes its money. I thought I’d be able to join the trading platform, but I reside outside the United States.

    Would you kindly suggest or recommend a similar trading platform that allows international investors to participate? Hear from you soonest! Thanks.

    Joyce

    1. Awe yes 🙁 unfortunately, it isn’t available outside of the US. I think Etoro would be a good platform to look at if you’re outside of the US 🙂 

  4. Hey Misael. Very interesting post. I was reading before about Webull a bit and to be fair opinions were very mixed. Thank you for clear and transparent summary of platform possibilities and limitations. I think it’s a good place to start adventure with online trading, especially that basic functions of platform are free.

    1.  Of course! I’m glad it cleared things up. And yes, it is definitely great to start trading there 🙂

  5. This sounds like a good way to start trading. I like that there is no joining fee.

    I would have loved to join but unfortunately, I’m not from the US but from the UK. If there are any from the UK you could recommend that would be great?

    thank you for your helpful review 🙂

    1. Sure! Etoro is a good place to go to if you’re outside the US!

  6. Thanks for this post. Webull is quite new to me but its seems very interesting. I like the fact that I can start free on the platform and upgrade when I need a more comprehensive data. Can you recommend other platforms to me as I’m not residents in the US and ill like to explore 

    Thanks 

    1. Sure thing! Etoro is a great one if you’re outside the US 🙂

  7. Great review of WeBull, and thank u for introducing a new platform to me. I am currently trading on ICICI and Zerodha, but I want lower brokerage rates and a more sturdy platform. I will check out WeBull as you have made it sound like an essential. 

    The best part is that like Robinhood, it is a FREE trading platform that charges no commission fees for transactions that take place on its platform. That’s a big positive. 

    Thanks once again. Regards,

    Aps

    1. I’m glad that this review was helpful! Thank you for your feedback 🙂

  8. Webull sounds like an interesting alternative to Robinhood.  Do you have any suggestions for people starting out?  I have some cash that is sitting in one of my accounts that is slowly withering away due to inflation.  I would like to invest it, but I’m always afraid of losing it, which is stupid because I’m already losing money by just having it sitting as cash and not investing it.

    1. If you would like to expose your money to more growth but are still very hesitant to expose it to risk, you could always put it in a high-yield savings account in an online bank or a federal credit union that offers a high yield. If you don’t yet have an emergency fund, it might be a good idea to first get started with that before you start investing. That’s the order I did things in

  9. Hello Misael! I’ve only recently started to be more involved with trading stocks. I currently use TD Ameritrade but starting to realize the day time trading hours are very limited. I heard Webull has an advantage in that they open at 4 AM eastern time so you get to trade way before everyone else does who doesn’t have an account. Knowing that, I am thinking of creating an account one of these days. I also did not know some of the other terminologies but your post provided just that. Thank you for this informative post.

    1. I’m glad this has been helpful 🙂

  10. I have been doing research about trading platforms for weeks but I couldn’t find one that is legit. 

    I mean there are a lot of them operating as MLM or even worse – pyramid Scheme but finally, Webull seems like a good opportunity for me to invest. 

    The fact that one can join for free is awesome and I am ready to give it a try. 

    Glad I have stumbled upon your site 🙂 

    1. I’m glad this was helpful 🙂 and ugh, I hate MLMs

  11. I’ve been wanting to start investing in the stock market but was unsure how to do it or what the cost was.  I’m very happy to know that this company is popular, trustworthy and free to use.  I think it’s time for me to get started investing!  Thank you for this great review!

    1. Of course. Glad it helped!

  12. I have never heard of this company before but I’m so glad I got the opportunity to do so on this article piece. Just like any other company; there’s some pros to the programs as well as cons and that’s completely understandable. I appreciate their honest outcomes. I think the only thing that they need to change in a near future is the opportunity to expand this business until it reaches other countries. 

    1. Glad to hear this was helpful! And yes, they certainly do need to expand out

  13. I have known of people using both Robin Hood and web bull I think web bull clearly has some advantages over other free trading platforms. I have thought about using this platform in the past because of the advantages it has and clearly provides a better user experience over others. You’ve done a great job providing information on the subject and I think this will be very helpful to new investors looking to start up a portfolio. Great article keep up the good work 

    Jonathon 

    1. I actually use them both! And yes, the features on Webull are much more advanced and useful! Robinhood just had that friendly interface that is certainly helpful for beginners

  14. Great to find an article with a little more information on the Webull trading platform. As I am always keen to investigate any trading platform before I invest my time and money, I am happy you have gone in to detail and explained fully how they can offer this platform with no subscription fees as it was my main question. I feel this is a must read article for any potential Webull user. Thanks for taking the time to share your knowledge!

    1. Thank you for your feedback 🙂 I’m glad to hear this was helfpul

  15. I am impressed by the quality of your article. No, I have never heard about Webull. I have seen many positive points. Your money is assured up to 250K. But even if this platform offer an easy-to-use tool to invest,  I feel that there is still a danger : you still need to do your research before you invest and the easy-side of Webull can make you forget that important step…  But I will try this platform for sure.

    1. I couldn’t agree more with you. People must not let the ease of use of ANY investing platform take away the hard work that is still involved with investing, and that is doing your research!

  16. Great review and I was glad to see that there are other free to use (up to a point) platforms besides Robinhood. I am trying to learn more about trading and want to start off small to get my toes wet, but was disappointed to see that they only offer services to US customers.

    I see you recommended EToro and Freetrade to a customer in your comments from the UK. Do you know of any good ones for South Africans?

    1. Actually, EToro would also be a good option for people in South Africa as well!

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