There are lots of brokerages to choose from when you’re looking to become a day trader. Like many brokerages nowadays, Webull is a commission-free option that is often compared to Robinhood. It’s a mobile-based brokerage that allows you to trade on-the-go and offers stocks, ETFs and options.
Depending on your account balance, it also offers added benefits such as short selling. Keep reading to get a breakdown on day trading on Webull because there’s a place for you on this platform whether you’re a pattern day trader, investment advisor, options trader, etc.
Brief Overview: Day Trading Requirements
Before we get into how to day trade on Webull, we have to give a brief rundown on the pattern day trading rule. Any stockbroker worth their salt understands this rule, but pattern day trading is always worth reviewing.
A day trade is defined as buying and selling a stock in the same trading day, with no overnight holding.
The pattern day trader rule was put in place by the Financial Industry Regulatory Authority (FINRA) in 2001. It states that pattern day traders must have a minimum of $25,000 in equity (not total account value), irrespective of their trading activity. This rule means that if you do not meet the equity requirement and you place more than three day trades within five business days, you will be flagged as a pattern day trader. Once you make your fourth trade, your brokerage will flag you as a pattern day trader and you will be blocked from trading until you meet the requirements.
Pattern day traders must have a minimum equity of $25,000 in order to continue day trading. However, this rule only applies to margin trading accounts, not a traditional pattern day trader account held in cash.
Read More: Beginner’s Guide to the Pattern Day Trading Rule
Webull Account Options for Day Trading
Webull has two main trading account options: cash and margin.
However, the amount of equity in your account has an effect on your user experience on the platform. Here’s a quick breakdown:
Cash
- Unlimited day trades (not restricted to the pattern day trader rule)
- No margin trades or short selling
Margin Account Between $0-2,000
- No margin trades or short selling allowed
- Restricted by pattern day trader rule
Margin Account Between $2,000-$25,000
- Short selling allowed
- Restricted by pattern day trader rule
- Margin trading allowed
Margin Account Over $25,000
- Unlimited day trades
- Short selling allowed
- Margin trading allowed
Read More: Guide to Short Selling
Margin accounts allow retail traders to borrow money, giving ambitious investors more buying power in order to potentially get a higher return. However, it also has the possibility of a great loss, even if you’re using what you believe are the best day trading strategies.
Cash accounts do not allow you to borrow money, therefore you can only risk the amount in your account, which is why it does not need to follow the pattern day trader rule. This is safer for the securities markets, and it’s also safer for you as you complete each stock trade.
Margin and cash accounts have their own unique pros and cons, and it really depends on how often you plan on making day trades, if you want to trade using margin, and how much money you have to fund your account to decide what works best for you.
If you have an account value under the $25,000 equity requirement, you can use the “day-trades left” tracker to make sure you don’t go over the limit and get flagged.
How to Day Trade on Webull
Once you decide which type of brokerage firm and account is right for you, sign up, and fund your day trading account, you can start using Webull to make trades according to your trading strategy.
Here are some things to keep in mind when you are day trading on Webull.
Margin
Even if you don’t have $25,000 in your account for unlimited day trades, if you have $2,000 or more, you can use margin or you can short sell stocks.
Margin trading on Webull does require a fee as follows at the time of publishing:
| Account Balance | Rate |
| $0-25,000 | 6.99% |
| $25,000.01-100,000 | 6.49% |
| $100,000.01-$250,000 | 5.99% |
| $250,000.01-500,000 | 5.49% |
| $500,000.01-1,000,000 | 4.99% |
| $1,000,000.01-3,000,000 | 4.49% |
| $3,000,000.01+ | 3.99% |
Trading Hours
Webull allows trading during pre-market and after hours. You can trade at any time on a trading day between 4 a.m. to 8 p.m. EST. Unlike Robinhood, you do not need to subscribe to a higher tier to access pre-market and after-hours trading.
Read More: How to Day Trade on Robinhood
What Can I Trade?
Depending on your trading strategy and the amount of money you have in your account, you can trade or short sell stocks on Webull. Webull also offers no-commission or contract fee for options contracts.
Additionally, for traders looking to practice, but not trade, they offer paper trading so you can practice your trading strategy before risking money.
Additional Upgrades
You can add on additional premium data for an additional charge, including Nasdaq Basic, national best bid and offer, and international stock exchanges.
Read More: How to Day Trade on Robinhood
Final Thoughts
There are tons of brokerages to choose from when building your investment portfolio, and Webull is a great option if you’re looking for on-the-go trading support, charting tools, etc. Unlike Robinhood, Webull allows short selling, and doesn’t require an additional subscription to trade pre-market or after hours. It is definitely possible to day trade on Webull, though it might be better for a more casual day trader.
Disclaimer: Benzinga is a news organization and does not provide financial advice and does not issue stock recommendations or offers to buy stock or sell any security. Benzinga Pro is for informational purposes and should not be viewed as recommendations. Benzinga Pro will never tell you whether to buy or sell a stock. It will only inform your trading decisions. You can find our full disclaimer located here.