Beginners in online trading, or just trading in general, will encounter several different terminologies whose definitions aren’t always easy to figure out without doing a bit of research.
Let’s start with the simplest ones: Settled vs Unsettled cash.
What Is the Difference Between Settled & Unsettled Cash on Webull?
You will mainly encounter settled and unsettled funds when trading with a cash account. The difference is that unsettled funds refer to the proceeds you’ve made by selling securities. The money doesn't quite belong to you yet as it has yet to finish going through the settlement process.
On the other hand, settled funds are the direct opposite.
They refer to cash already settled on your account and ready to use without any possible consequences (like good faith violations), unlike when you’re trading using unsettled cash.
How Long Does Unsettled Cash Take To Settle On Webull?
Stocks on Webull, like in other platforms, have a T+2 settlement period, which means that it takes the trading day plus two business days before the funds are fully settled.
For example, you sell a position on Monday. The proceeds from that transaction aren’t going to settle until Wednesday, which is the 2nd business day (granted that there are no holidays in between) after Monday.
Can You Trade With Unsettled Cash on Webull?
Webull offers instant buying power to its users, which means that you can trade with unsettled cash. However, when trading using a cash account, you should avoid selling a stock, buying another one, and then selling it again within the same day.
You must wait for those to settle first before attempting to sell a stock again. Otherwise, it’s going to become a good faith violation.
We've written a full guide on good faith violations on Webull here.
Why Do You Have Unsettled Cash on Webull?
You get unsettled cash when you close out a position (or, in other words, sell a stock) wherein the proceeds have yet to complete the settlement period, which is T+2. Similarly, it can be any cash you have deposited that has yet to settle into your account.
Why Is Your Unsettled Cash Negative on Webull?
This happens when you trade on provisional credit. More specifically, it occurs when you purchase stocks using unsettled funds. Your cash balance will turn negative because you technically spent more than you had.
Remember that although you’re allowed to trade using unsettled cash, that doesn’t mean the money you used already belongs to you; hence the reason it’s called provisional. It should, however, fix itself once the funds have settled.
What Is the Difference Between Cash Balance and Settled Cash?
Cash balance is the total amount of money deposited in your account.
This refers to real cash, the most liquid of assets. The amount shown on your Webull app may vary depending on whether or not your deposit has settled or if you are trading on margin.
This differs from settled cash in that settled cash can also include any profits or proceeds you’ve made from selling your positions. It doesn’t necessarily only include actual money that came from your deposits.
You can only day trade (or purchase and sell a security within the same day) using settled cash on a cash account. Such is not the case for margin accounts because both settled and unsettled funds can be used for unlimited day trading (in the case of Pattern Day Trading accounts).
This is also the cause of negative cash balances because you are essentially borrowing money from Webull to increase your buying power.
How Can You Withdraw Settled Cash on Webull?
Withdrawing your money from Webull is fairly easy, but the first thing you have to make sure of is that you already have a bank account linked to it because that’s how you’ll get the proceeds.
This will be via ACH, and it’s completely free of charge.
Just follow these steps:
- Open your Webull app and go to the homepage by tapping on the Webull logo, which is the right in the middle of the bottom part of your screen
- You will then see the different tabs right at the top, so choose the “Transfers” tab
- Tap on “Withdraw”, which is right under “Deposit”
- This will lead to a page that shows your cash balance that is available for withdrawal, and right at the bottom is the “Withdraw” button
- Next comes the page which will allow you to put in your desired amount (less or equal to the withdrawable amount)
- Afterwards, tap “Transfer to my bank”, which will open a pop up with a summary of the transaction and the “Confirm” button
- The final step, after confirming, is for you to verify your identity by putting in your date of birth
This will initiate an ACH transfer, taking 2-4 business days.