Webull Vs. Robinhood 2021 Comparison
Before Webull vs. Robinhood was even a choice for investing, five short years ago stock trading was through expensive brokerage firms.
For every trade a broker did on your behalf, you would have to pay $5 – $10 plus hefty commissions. That’s why investing in the stock market was considered an elite club.
Companies like Webull and Robinhood changed all that so anyone could get free trading and expand their wealth!
But as always, which option is best for you?
In this Robinhood vs. Webull review, we’ll dive into the two most popular online trading platforms to help you identify the best investment tool for your needs.
The Short & Sweet TL;DR
Now Webull and Robinhood have many areas where they’re similar, and that can make it difficult when picking your best option.
It comes down to what key features stand out to you and what Webull and Robinhood actually differ in.
Who Would Benefit From Webull?
Webull is built for those who know their stocks and ETFs, have experience investing, and are very active in their portfolio.
They’re the option for active traders who want to get as much out of their account as possible. They even have extended day trading for those who need to be more active with the fluctuating market.
In addition, Webull offers retirement accounts so investors looking to save for the future will be drawn to Webull rather than Robinhood.
Who Would Benefit From Robinhood?
Robinhood is geared toward new investors and has educational resources and research tools so you can learn more about investing and take a more hands-on role in managing your funds.
Robinhood seems to have Webull beat in cash management accounts, and you can get better margin rates, so you’d be paying less to borrow on margin.
Webull Overview
Webull offers zero-fee, zero-minimum, and commission-free accounts that feature easy-to-use, highly intuitive trading. The mobile app is chock-full of insights into various investment channels and markets and even offers investment options in several cryptocurrencies.
It’s a literal one-stop-shop for information on forex, popular industries, exchange-traded funds (ETFs), dividend payouts, dividend reinvestment, initial public offerings (IPOs), options, and more.
While Webull provides a significant amount of resources to its users, it has a steep learning curve, making it better suited to an experienced investor.
Robinhood Overview
Robinhood has made waves in the stock trading world. They were the first to offer commission-free trading, and set the standard that other trading platforms should be commission-free as well!
The app still charges nothing on trades, zero commission, does not require a minimum balance, and has an incredibly easy-to-use interface.
Robinhood offers users penny stock, options, ETF markets, and engage in cryptocurrency trading. It keeps things simple making it the most newbie-friendly app out there. It does lack some sophisticated features that advanced traders may appreciate.
Webull Vs. Robinhood: Fees
Unlike traditional brokerage firms, neither Webull nor Robinhood charges fees for joining their platform or trading outside their product catalogs- hence why you hear “commission-free”.
The brokerage even goes a step further by offering any new Robinhood user signing up to the platform the opportunity to get one share of free stock.
You’re likely wondering how they make money without charging fees. It has a lot to do with a concept known as “bid-ask spread.” Simply put, it is a business model that centers on finding other uses for the customer funds they hold.
Here’s how it works.
When an asset’s ask price exceeds the bid price, the difference between the two amounts is known as the bid-ask spread. A brokerage platform takes advantage of this amount to make money by routing the orders it gets through external market makers (individuals who bid and offer in two-sided markets) and other investors.
The bid-ask spread amount is usually around $0.01 (or less) for each share. With a large trading volume, it’s easy to see how it mounts up to compensate for the absence of commissions.
Neither Webull nor Robinhood charges trading fees, trading commissions, or inactivity fees for their services.
However, there is the standard SEC regulatory fee of $22.10 per million of the principal amount and the FINRA Trading Activity Fee (TAF), which currently stands at $.000119 per share up to a limit of $5.95.
Traders who upgrade to the Robinhood Gold plan, which is a premium service, are required to pay additional fees to access premium services.
Both platforms offer margin investing, allowing traders to borrow money from the platform at a fee, and invest it.
Webull charges 6.99% up to a maximum of $25,000. On the other hand, Robinhood charges $5 per month for amounts up to $1,000 and a flat fee of 5% for amounts above that.
Both platforms support bank account transfers for deposits and withdrawals made to and from the platforms and don’t typically have any fees associated with those transactions.
Brokerage Fees
The whole reason people started using a mobile app to invest is because of all the fees and money they got from stocks but had to couch up to brokers.
From a customer standpoint, any time you join a brokerage, you need to look out for the following fees:
Trading fees
These are the charges attached to any trade you make. It may be in the form of a flat fee or a spread (the difference between the bid price and the asking price).
Trading commission
This is charged as a standard percentage of the value or volume of each trade.
Inactivity fees
These are the charges levied on your account for not trading.
Other fees
These are any other charges that don’t fall into any of the categories listed above.
Webull Vs. Robinhood: Investment Options
Trading in the stock market is all about making money and you need to know what the companies offer so you can get the most out of what you want.
The amount you earn in dividends depends on your investment strategy based on the options available. For the most part, both Webull and Robinhood offer similar trading opportunities to investors.
You can trade U.S. stocks, options, ETFs, and American Depository Receipts (ADRs). Both platforms also allow customers to invest in cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and Dogecoin.
However, one glaring difference between the two is that while Webull supports short selling of stock, Robinhood does not, and they also offer retirement accounts.
Additionally, neither app allows customers to trade in bonds or mutual funds, which may dissuade some investors.
Webull Vs. Robinhood: Features
The user experience on the two platforms is vastly different. It may have a lot to do with the kind of investor each company targets.
Webull Features
Everything about the Webull mobile app caters to sophisticated investors. The interface looks like a product that a professional broker would use.
It displays current share pricing information, the trader’s position within specific equities, share activity, and even the price history. In addition, users can toggle between one minute and five years – a feature day trading investors find quite useful.
Webull offers candlestick charts on its trading pages to provide more technical data, which new users may find overwhelming.
However, the wealth of insights you get from Webull’s mobile app, alongside the several technical indicators provided, makes it complex and well-suited to experienced investors who understand what to do with that information.
Webull offers advanced trading tools such as:
- Balance sheets
- Cash flow reports
- Income statements
- Morningstar reports
- News streaming services
Webull also offers a niche feature known as paper trading, which is absent from the Robinhood app. A paper trading account is a simulator that lets customers see how much a particular position would cost and its performance without having to commit real money.
Robinhood Features
Robinhood was the first online brokerage firm to launch a truly mobile platform for trading and investments. Its primary selling point was to make trading easy for customers with little to no prior experience investing in the stock market. This was a total game-changer.
The Robinhood trading app interface is highly intuitive and easy to navigate. It offers users basic information such as trading volume, share price history dating back five years, recent price changes, and the current share price of a particular stock. There’s even a drop-down menu you can use to set limit orders, stop-loss orders, and a host of other settings that novice investors would find quite useful.
Customers who upgrade to the Robinhood Gold plan get additional perks that regular users don’t have access to. Some of these premium features include in-depth market data, professional research, instant cash transfers, and extended hours trading.
On the flip side, the Robinhood platform has recently come under fire for what some factions term “gamifying” trading. This is largely due to some of its design features, such as the “you-may-also-like” panel at the bottom of each stock that recommends other equities an investor might be interested in.
The whole idea of egging customers on to invest in other securities without doing any due diligence treats it like gambling. This is a major concern, especially for inexperienced users who may not be aware of all the risks involved in such behavior.
Webull Vs. Robinhood: Customer Support
A huge difference between the two platforms is the available channels that customers can use to receive support if they run into any issues.
The Webull mobile app has an extensive FAQ resource page you can use to find solutions for the common issues users encounter while using the trading app.
There’s an email address provided as well, which you can use to write to the support team. However, the staff members take around 24-36 hours on average to respond. If you would rather speak directly to a support representative, there’s also a phone number you can use to reach them.
Likewise, Robinhood offers an FAQ resource page and email address users can use if they need help. Unfortunately, the platform does not offer telephone or live chat support if you need real-time human intervention.
Webull Vs. Robinhood: Benefits
Here’s an overview of what each platform brings to the table.
Pros of Webull
In-depth analytics
Webull provides balance sheets, cash flow reports, income statements, Morningstar reports, and news-streaming services all within the platform. There’s no need to switch back and forth between apps to get investment information.
Short selling
While short selling may be a controversial investment strategy for some, if the practice appeals to you, Webull lets you do that.
Paper trading
The platform allows investors to operate simulated trading accounts, which are identical to the real ones, except that they don’t require real money. It’s a great way to hone your skills and build confidence before you start trading with actual money.
Pros of Robinhood
Newbie-friendly
The platform’s layout is simple, clean, and highly intuitive, making it ideal for individuals with no prior experience or those who aren’t advanced traders. It offers a less intimidating approach to equity investment.
Lower fees on margin accounts
Robinhood charges $5 per month for amounts up to $1,000 and a flat fee of 5% for amounts above that for any individual with a margin account.
Free stock
Any trader joining the platform (for the first time) gets one share of free stock credited to their Robinhood account.
Newbie-friendly
One of the best things Robinhood offers is fractional shares so you can use every bit of money in your account to get more stocks and ETFs. You really make the most out of your money with fractional shares.
Originally they didn’t have them, and M1 Finance and Betterment did, but Robinhood is trying to up their game to keep up with the competition and it shows!
Webull vs Robinhood: Drawbacks
Below are some of the shortcomings you need to be aware of when joining either platform.
Cons of Webull
Complicated user interface
The UI looks like something professional brokers would use, which can be intimidating for a new trader. The platform has a steep learning curve to overcome before you get the hang of it.
Limited educational resources
The absence of in-depth explanations for complex topics like options trading, forex, crypto trading, and margin trading can leave a beginner investor in a lurch.
Poor cash management
Unfortunately, the online broker doesn’t offer any interest on uninvested money. Instead, it simply sits in the user’s Webull account with no growth whatsoever.
No Mutual Funds
Now for those who want to pool their resources with other investors, Webull doesn’t offer mutual fund options.
Cons of Robinhood
Minimal research and analytics tools
The Robinhood app UI offers very little in the way of real-time analytics and investment data. Users have to rely on third-party apps and a screener to get the information they seek. Although users on the Robinhood Gold plan do have access to in-depth market data and professional research, this isn’t a free service.
May encourage risk-taking behavior
Features such as the “you-may-also-like” panel at the bottom “gamifies” trading by nudging users to make uninformed investment decisions.
Limited customer support channels
The only way to reach the support team is through email. The platform does not offer telephone or live chat support.
No Mutual Funds
Just like Webull, Robinhood doesn’t currently offer mutual fund options if you wanted to join other investors in an investment option.
Bottom Line
As far as the Robinhood vs. Webull debate goes, the choice of one investment app over the other ultimately boils down to the kind of investor you are.
You should choose Webull if you’re a hardcore investor, otherwise, it can be overwhelming with all the advanced features.
Webull is designed with the intermediate and advanced active trader in mind. It has a host of in-platform research and analytics tools that make it ideal for information-hungry users and active traders.
Robinhood, on the other hand, is ideal for part-time and new investors. The interface is simple and easy to use without the steep learning curve that Webull has.
If you have no prior experience investing in the stock market, we recommend starting with Robinhood and then work your way up to the Webull app.
Are you interested in learning how to get free stocks and kick start your investment journey?