The stock brokerage business is a highly competitive one. This works to the advantage of retail investors. Let them fight among each other so that we can pick the best deal among them. I personally have accounts with several stock brokerages as each of them comes with its own strengths and they do not charge me account maintenance fees even if I do not use them to trade. There is no disadvantage in having more stock brokerage accounts.
Recently, a new stock broker entered the Singapore market. It is Webull.
Before I even think of signing up for a stockbroker, the first question I ask is whether it is regulated. I will not bother if it is not because it is not safe. Webull is licensed and regulated by the FINRA and SEC in USA, SFC in Hong Kong and MAS in Singapore.
Here's what I see on Webull's website,
If Webull is able to gain regulatory approval in developed markets like the U.S, Hong Kong and Singapore, I can be assured that the basic consumer financial protection is adequate.
The next question is with so many stock brokers around, why use Webull? The critical question is ...
Question) What does Webull offer that other stock brokers do not?
Answer) Cheap fees into the U.S and Hong Kong stock markets!
Here are the fees charged by Webull for the U.S stock market (5Jun2022).
Webull charges ZERO commission for U.S stocks, ETFs and Options. Customers of Moomoo and TigerBrokers will argue that Moomoo and TigerBrokers have recently launched their zero-fee pricing package. So, what is special about Webull? The difference is that Webull charges zero platform fees.
Zero commission fees. Zero platform fees. This sounds too good to be true. So, where is the catch? Brokers like Webull and Robinhood who charge zero fees make their money by selling information about customer orders to market makers. This is called "payment from order flow" and will result in customers getting poorer transacted prices. How much poorer? It is hard to quantify and it depends on the type of customer. If you are a big institutional investor who wants to accumulate a large position at the best possible price, then the negative impact caused by payment from order flow will be large because you will not be able to operate secretly. However, if you are a retail investor who usually places limit orders for U.S stocks that are small relative to the market liquidity, then the negative impact caused by payment from order flow will be much smaller. If you belong to the latter group, then Webull will be a cheap broker for you and payment from order flow should not be a big concern.
Here are the fees charged by Webull for the Hong Kong stock market currently (5Jun2022)
Zero commission fees and zero platform fees again for Hong Kong stocks and ETFs, similar to the U.S. However, this is a promotional rate and I do not know when the promotion will end. No other broker offers this pricing for Hong Kong stocks at the moment.
Some customers probably think if Webull charges zero fees, then it has to be the cheapest broker around for trading U.S and HK stocks. Unfortunately, this is not necessarily true if you have to convert local currency into USD and HKD at Webull. If Webull's currency exchange rate is bad, then the total cost may be higher than other brokers even if commission fees are zero. Please verify the exchange rate offered by the broker yourself before you proceed to trade foreign stocks.
Disclosure: I cannot check Webull's exchange rate because I do not have access to a Webull account at the moment but I will be getting it later.
One method to solve the bad exchange rate problem is to exchange the foreign currency at a cheaper venue first, then deposit the foreign currency directly into Webull. My favourite broker to make cheap forex transaction is Interactive Brokers. It is the cheapest that I know. The following steps are the cheapest method I know to deposit foreign currency into Webull;
1. Do the currency conversion at Interactive Brokers (IBKR).
Please note that some customers who purely use IBKR as a money changer have received warning notices. You have to execute some trades in return at IBKR if you want to enjoy their cheap exchange rates.
2. Deposit the foreign currency into DBS multi-currency account.
3. Do a telegraphic transfer from DBS multi-currency account to Webull. I use DBS multi-currency account for moving funds overseas as it is the most cost-effective account that I know to do so.
From 21May2022 to 30June2022, Webull will be rewarding new clients who sign up during this promotional period with up to USD100 worth of Apple shares. Here are the steps to qualify for this reward.
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