Investopedia’s broker reviews judged Webull as the best brokerage for low-cost option trading. That’s no small feat. Webull is among the few that offer commission-free option trading, but among those, it offers the best mix of function, ease of use, and innovative features. Two such innovative features include the ability to buy fractional shares and to use its robo-advisor product.
Webull is among several online brokers that charges exchanges payment for their customers’ order flow, allowing it to make revenues without having to charge customers for option commissions. We've developed this guide to help you get the most out of Webull's free, but sold options trading platform.
How to Trade Options on Webull
To get started trading options on Webull you need to open and fund an account. The process doesn’t take long, but it helps to have a few key items nearby as you complete the following steps.
Step 1: Open a Webull account. Webull users can open a new account on the website or by downloading the app to their smartphone. The account application also asks for some personal information, some financial information, and responses to several questions about your trading or investing objectives. The approval process does not take very long, and once complete you can log right in.
Step 2: Log in to your Webull account. Logging into Webull requires you to establish a user ID, a password, and the answers to some security questions that will come in handy if you need to reset your password. Once logged in, you can review news feeds based on current events, stocks in your watch lists, or educational and promotional events Webull presents.
Step 3: Fund your account. You can choose to deposit money into your account through wire transfer, microdeposits (takes one or two days) or ACH deposit (happens instantly). Webull has no required minimum deposit, but it often offers promotions to entice new users to fund their account. For example, Webull may offer one free share of stock for any new customer who deposits $100 or more. Once the account is funded, you are ready to research stocks and the options available for them so that you can place orders.
Step 4: Research options. The Webull app features a collection of information feeds from other users, watch list pages, and market news and stats. The layout of these feeds and research pages can get a little busy on the app, but the screens viewed through a web browser on a PC are laid out nicely and are easy to peruse. Either way it is easy to collect a lot of information about any given option that is possible to trade on the Webull platform. Once you’ve determined which option you want to add to your portfolio, you simply place the order.
Step 5: Place an order. Once you select a stock from a watchlist or by typing in the ticker symbol, you can select the options tab to view the option chain. This is a table listing all of the option contracts you can trade with on that stock. Once you have identified your desired expiration date and strike price, you can select the strike price to begin the order process.
The mobile platform offers what it calls “simple” orders or “group” orders. Simple orders refers to commonly used order types, including market, limit, stop, stop limit, and trailing stop orders. Group orders compound these types into a more sophisticated collection of functions. For simple or group orders on option contracts, you can specify these under the “Order Type” entry field.
To get any type of group order working for options, you need to do some customization to the Active Trade screen. There you can add a user-defined trading button which will set up an entry order for the option, a stop-loss based on a percentage decline in price, and a take-profit based on a percentage gain in price. Once defined, all three orders can be touched off with a single click of the user-defined button.
Compare Some Top Options Trading Platforms
|Broker||Minimum Deposit||Per Contract Options ▲||Max Options Legs||Total Options Chains Columns||Avg. PFOF Per Contract|
|E*TRADE||$0.00||$0.50 to $0.65||4||31||$0.39|
What You Need to Open an Webull Brokerage Account
Webull accepts customers in the United States, India, Brazil, Turkey, the Philippines, Malaysia, Japan, China, and Korea. Opening an account includes completing an application and providing both personal and financial information.
If you are a U.S. resident, opening the account will require that you provide your name, address, and a picture of the front and back of your driver’s license. You will also be asked to provide your Social Security number. Non-U.S. residents will be asked for equivalent documentation for their country of legal citizenship.
The section of the Webull application that collects basic financial information asks for the value of liquid assets, the value of current income, and the type of employment you have. Another section of the application asks questions about your investing goals and objectives so that it can determine what types of assets are more likely to be suitable.
The Benefits of Trading on Webull
No-fee trading in stocks, ETFs, options, cryptocurrency and more is a big reason why Webull is popular. Lower implementation costs make it easier for traders to profit off a trading strategy and Webull’s team understands this.
The platform features an easy account setup and options approval with no fees or minimums. The account opening process only takes a few minutes and once the transfer is set up, you can receive buying power on the account right away.
There is also auction-crossing information for all NASDAQ-NYSE and regional listed stocks on NASDAQ Market Center. Fractional shares are available on the platform so there is no price limit to participating in the growth of your favorite shares.
What Are Options?
Options are a derivative instrument that affords a trader the opportunity to take a position on a stock, index, ETF, or futures contract without having to spend the full purchase amount to buy the stock at first. You can decide to purchase the stock at a later point, up until the moment the option expires. Trading options creates leverage, sometimes as much as 10 to 1. That’s why trading options effectively requires that an investor study the definitions, concepts, and strategies behind the types of options traded.
What Is Webull?
Webull is a multi-asset discount brokerage, specializing in low-guidance trading. Its app can be downloaded onto your smartphone and used to access the world’s major stock exchanges.
Can You Trade Options on a Webull Paper Account?
Webull has a facility for doing simulated trades, dubbed paper trading, which generates virtual trades and tracks their hypothetical performance. It's a great way to practice trading and to gain competence using the trading platform. Webull also has a paper trading account function for options which is separate from the regular paper trading account. Option trades can be made here so that you can see how the results differ between stocks and options.
What Is the Best Options Trading Platform?
The Investopedia reviewers judged the best overall options trading platform of 2023 to be Fidelity. But Webull was judged to be the best platform for low-cost option trading. That’s a coveted position to be in if your firm intends to attract experienced option traders, and Webull naturally does that for a variety of reasons including ease of use, handy charting tools, and its new Smart Advisor offering.
Trading shares commission-free is the standard nowadays, but commission-free option trading is more rare. That’s why Webull’s free options trading on its well-designed platform stands out. Webull is worth looking into if you’re a trader who understands the market and doesn’t require intensive education and trading support. While other brokers may have impressive tools for researching and trading options, Webull is one of the few mobile-based trading apps that makes option trading more accessible and affordable.