Webull vs Robinhood [2023]: The Winner is Clear
Investing is one of the most important things you can do to build wealth. It has never been easier to open an account and start investing than it is right now. So you’ve decided to invest. Congrats! You’re in good company: according to a recent study, approximately half of American households have money invested in the stock market.
But with so many discount online brokers to choose from, which one should you sign up for? In this article, we compare two of the most popular choices: Webull and Robinhood. We’ll look at each brokerage’s fees, account minimums, and investment options to help you decide which is right for you.
Webull vs Robinhood?
| Webull | Robinhood | |
|---|---|---|
| Account Minimums | •Cash Account - $0 •Margin Account - $2,000 | •Cash Account - $0 •Margin Account - $2,000 |
| Asset Classes | •Stocks •Options •ETFs •Cryptocurrency | •Stocks •Options •ETFs •Cryptocurrency |
| Account Types | •Cash Account •Margin Account •Traditional IRA •Roth IRA | •Cash Account •Margin Account |
| Dividend Reinvestment | No | Yes |
| Fractional Shares | Yes | Yes |
| Charting | Advanced | Basic |
| Best For | Advanced Traders | New Traders |
Anyone interested in investing has probably heard of Robinhood and Webull. They’re two of the most popular investing platforms out there, and for good reason. Both platforms offer commission-free trading, which is a huge draw for investors who want to keep more of their profits. But what exactly are Robinhood and Webull?
Robinhood is a mobile app-based online broker that offers commission-free trades on a variety of securities, including stocks, ETFs, options, and more. The platform is designed for casual investors who want to build a portfolio with minimal costs.
Webull is another mobile app-based brokerage that offers commission-free trades, but it also provides advanced features for more experienced investors. Webull, like Robinhood, also offers commission-free trades on stocks, ETFs, options, and more. The platform also provides real-time market data and news, making it a great resource for active traders.
How does Webull work
Webull is an online investing platform that offers commission-free trades and is available to users in the U.S. Once you sign up for an account, you can link your bank account and start transferring funds. Once your account is funded, you can start to trade stocks, ETFs, options, and cryptocurrencies.
You can also access research reports, real-time news, and market data. Plus, Webull offers extended-hours trading and margin accounts for eligible users.
So how does Webull make money? The company generates revenue from interest on cash balances and margin loans, as well as from rebates on order flows. So if you’re looking for a commission-free way to invest in the stock market, Webull may be worth checking out.
How does Robinhood work
Robinhood is an investing app that allows users to trade stocks, ETFs, and options with zero commission fees. Robinhood was designed for a new generation of investors – those who are comfortable with technology and who want to take a more active role in their financial future. The app is incredibly simple to use, and it offers a great way to get started in investing without breaking the bank.
So, how does Robinhood make money? Well, they don’t charge you any commission fees, so they must be making their money some other way, right? Robinhood makes most of its revenue from something called “payment for order flow.” When you place an order to buy or sell a stock, that order doesn’t go straight to the market. Instead, it goes to one of Robinhood’s market makers – firms that specialize in executing trades.
The market maker then fills your order and charges Robinhood a small fee for doing so. In turn, Robinhood passes some of that fee on to you in the form of a rebate (hence the name “payment for order flow”). This system may sound a bit complicated, but it saves investors money because it allows Robinhood to keep its commission fees at zero.
Webull vs Robinhood: What account types do they offer?
When it comes to choosing an investment platform, there are a lot of factors to consider. One important question is: what types of accounts does the platform offer? There are three main types of accounts you should be aware of.
Retirement IRA accounts
The first account to be aware of is a Traditional IRA or Roth IRA. These retirement accounts offer great tax benefits compared to a standard taxable brokerage account. If this is the account you are seeking then the choice will be easy. Webull is the only app that offers retirement accounts as an option.
There has been talk this year of Robinhood offering retirement accounts, though no date has been set for a release of these account types.
Individual Taxable Accounts
One of the most important accounts for your long-term financial health is the taxable brokerage account. Also known as an individual brokerage account, this account is exactly what it sounds like: a personal investment account that is subject to capital gains taxes. While that may not sound very appealing at first glance, there are a lot of advantages to having a taxable brokerage account.
For one thing, it gives you a lot more flexibility in terms of when and how you withdraw money from your investments. And since you’re only taxed on the gains you make, it’s possible to minimize your tax bill by carefully timing your trades.
So, if you’re looking for individual taxable accounts, you’ll have a bit of a harder choice. Both Robinhood and Webull offer individual taxable accounts, but there are some differences that we will look at below.
Margin account: Webull vs Robinhood
For anyone new to stock trading, margin trading is the practice of borrowing money from a broker to invest in an asset. This can be done with a margin account, which is a type of investment account that allows traders to borrow against the value of their assets.
Margin accounts are typically used by experienced traders who are comfortable with the risks associated with borrowed money. However, margin accounts can also be used by beginner investors who want to get started in margin trading.
So, which is better: Webull or Robinhood?
Both Webull and Robinhood require a minimum balance of $2,000 to open a margin account. A margin account on Webull is free except for the interest owed on any money you borrow for trading. To unlock margin trading on Robinhood you need to have a Robinhood Gold subscription costing you $5 a month.
For margin traders, there isn’t a clear winner between the two. The margin rates for Robinhood are slightly lower, but it depends on how much you are trading to decide if the subscription cost will make a difference. At $5 a month, I doubt it!
Webull vs Robinhood: What investment choices do they offer?
Both Webull and Robinhood offer a variety of brokerage services. There are many different types of asset classes, each with its own set of characteristics and risks. Webull and Robinhood offer similar products and services.
When it comes to investment choices, Webull offers cryptocurrency trading, options trading, and the ability to purchase stocks and exchange-traded funds. For a list of current cryptocurrencies, it is best to check out their website here.
Robinhood also offers cryptocurrency trading, options trading, and the ability to purchase stocks and exchange-traded funds. If you’re looking to invest in cryptocurrency, Robinhood is currently your best bet.
If you are looking to invest in mutual funds then it is time to look elsewhere. Neither Webull nor Robinhood offers to invest in mutual funds at this time. Currently, my choice for the best mutual funds would have to go to Vanguard. They offer great returns with very low fees!
Webull vs Robinhood: What do they both do well?
Fractional Share Investing
You may have heard of fractional share investing, but what exactly is it? In a nutshell, fractional share investing allows you to buy a fraction of a share of a stock or ETF. This can be a great way to get started in investing, especially if you don’t have a lot of money to start with.
For example, let’s say you want to buy shares of Apple stock. If each share costs $150, you would need $1,500 to buy 10 shares. But with fractional share investing, you could buy half a share for $75.
The key advantage of fractional shares is that it allows for a more diversified portfolio without having to invest a lot of money upfront. And since you’re only buying a fraction of a share, your investment is also less risky.
Of course, fractional shares also have some disadvantages. For one thing, they typically don’t come with voting rights. And since you’re only buying a fraction of a share, your dividends will be smaller as well.
Both Webull and Robinhood offer fractional shares to anyone with an account. If you are looking to start investing now, with limited funds, then fractional shares are a great option for you.
Commission Free Stock Trading
Trading stocks can be a great way to start building your net worth. However, trading also comes with fees that can eat into your profits, especially for beginner traders with limited cash.
Robinhood and Webull are both commission-free trading platforms. Both platforms offer free trading to help lower costs for even the most active trading. This is a great time to be an investor!
No Account Minimum
When it comes to investing, there are a lot of things to consider. But one of the most important factors is how much money you have to start with. If you’re a beginner and on a budget, either of these brokerages will work for you. Even intermediate and advanced traders will find something to like on both platforms.
Offering Extended Hours Trading
If your trading platform needs to offer an extended-hours trading feature, you’re in luck. Both Robinhood and Webull offer this service, which will allow users to trade during extended hours, which are typically outside of the regular trading day.
Extended hours trading can be a great way to capitalize on market movements that occur during times when the markets are usually closed. You won’t have to sit idly by, while the market makes big moves!
However, it is important to note that extended hours trading can also be more volatile due to low trading volume, so users should be aware of the risks before trading during these times.
Offer Margin Accounts
Robinhood and Webull both offer margin trading on their non-retirement accounts. Robinhood offers a Robinhood Gold account, which costs $5 per month and allows investors to access up to $1,000 of margin.
Webull does not charge a monthly fee for its margin account, but its margin interest rates are slightly higher. Both Robinhood and Webull require a minimum of $2,000 in your account to have access to margin trading.
Webull vs Robinhood: What separates them?
Dividend Investing
For the dividend investor, reinvesting dividends is key to achieving compound returns. When you reinvest your dividends, you’re essentially giving yourself a raise. The more dividend stocks you have in your portfolio, the more influential compounding becomes.
Both trading platforms allow dividend investing but Robinhood is the only one that has automatic dividend reinvestment. Robinhood’s automatic dividend reinvestment not only makes it easier to stay on track but also grows your money over time by doing the heavy lifting for you.
Webull on the other hand allows you to reinvest dividends, but you will have to do it manually. This is fine if you watch the market closely, but if you are like most new investors, you will have better things to do than tracking the market.
Trading Tools
When it comes to an online trading platform, there are a lot of options to choose from. For active traders, you might be wondering which platform is right for you. While there are a lot of different factors to consider, one key difference between these two popular platforms is the level of sophistication. Robinhood is geared more towards beginning investors, while Webull offers more advanced features for intermediate and advanced traders.
One area where Webull excels is in the realm of research tools. Technical indicators and other research tools can be extremely helpful for those who know how to use them, and Webull provides access to a wide variety of these resources. This extra market data is great for the more advanced traders but could cause analysis paralysis for beginner investors.
Ultimately, the choice between Robinhood and Webull comes down to your individual needs as an investor. If you’re just starting, Robinhood may be a better choice for you. However, if you’re looking for a more robust platform with advanced features, Webull could be the trading platform for you.
Short Selling
Short selling is when you sell stocks that you do not currently own, and hope to buy back at a lower price for a profit. For example, let’s say XYZ company is trading at $100 a share. An investor believes that the stock will go down shortly, so the investor sells the stock at $100. If the stock price falls to $80 as planned, then the investor buys it back and returns it to the broker.
The difference between the $100 sell price and the $80 buy price is the investor’s profit. Short selling can be done with stocks, but also with options contracts, bonds, and other securities. Be aware that short selling is a high-risk investment strategy and should only be used by advanced and intermediate investors.
I do not recommend short selling to new investors as your losses are limitless if you are wrong. If this is something you want to give a try though, you will be forced to open an account with Webull, as Robinhood does not offer this service.
Robinhood Cash Card
The Robinhood Cash Card is one of the newest products from the popular investment app. The card offers several benefits for users that make it a great option including no monthly fees and no in-network ATM fees.
My favorite part about the Robinhood Cash Card is the auto round-up on purchases. This rounds up all your purchases to the next dollar amount and deposits the money into your investment account. This makes investing automatic, which can help build your wealth quickly.
With the Robinhood Cash Card, you can get your paycheck up to 2 days early. Plus, you’ll earn weekly bonuses on things you already buy every day. If you want to find out more check out more details here!
Webull vs Robinhood: Which Investment app should you choose?
When it comes to choosing a stock trading platform, there are a lot of options out there. Two of the most popular platforms are Robinhood and Webull. Both platforms have their pros and cons, so it’s important to choose the one that’s right for you.
If you’re a new investor, Robinhood Gold may be a good option for you. The platform is simple and easy to use, and it doesn’t require any minimum balance. However, Robinhood doesn’t offer much in the way of research tools, so if you’re looking to do more than just trade stocks, you may want to consider another trading platform.
Webull, on the other hand, offers a more robust research platform, as well as retirement accounts. However, the trade-off is that they don’t offer automatic dividend reinvestment, and the research tools can lead to analysis paralysis.
So which platform is right for you? It depends on your investment goals and how much time you’re willing to put into researching stocks. If you’re just starting out, Robinhood may be a good option. But if you’re looking to do more serious investing, Webull is worth considering.
Conclusion - Webull vs Robinhood
So which trading platform is right for you- Webull vs Robinhood? If you’re a more experienced trader who likes to have access to complex technical analysis tools to help execute trades, then what Webull offers is probably your best bet.
However, beginner investors will find Robinhood’s simple interface much more appealing. Ultimately, it comes down to personal preference. However, Webull and Robinhood both offer high-quality investment options and free trading for mobile users, so you can’t go wrong with either one.
Whichever trading platform you choose, you can be confident that you’ll have access to the resources you need to build wealth and secure your financial future.
