One of the things that elude people the most when it comes to Webull is what cash balance is and how it differs from the other components that make up your account’s net value.
Below are answers to 7 questions meant to help clear it up for you.
Why Can’t You Use Your Cash Balance on Webull?
Different factors could affect the availability of your cash balance, whether to be used for trade or to be withdrawn and transferred to your bank account.
The Webull website outlines four possible reasons:
- Withdrawal Holding Period ‒ If you made a deposit using ACH, your deposit would need to stay in your account for 7 business days. Doing it via wire transfer doesn’t have a holding period, but there are fees associated with it ($8 for U.S. domestic wires and $12.5 for international wires).
- Settlement Period ‒ Funds cannot be withdrawn before they have fully settled. Stocks have a T+2 settlement period, while options are only on a T+1 basis. In the case of crypto sales, if it was made before 8:15 PM ET, then they will be available for withdrawal on the following business day. However, any crypto sales made after 8:15 PM ET will also follow the T+2 settlement period.
- Required Margin Maintenance ‒ If you are trading on a margin account, you must maintain a certain minimum amount of equity. This could be anywhere between 25% and 100% of the market value or higher depending on volatility.
- Pending Orders and Frozen Funds ‒ Some funds will remain locked in your account and cannot be withdrawn, like those used for open orders and the purchase of IPOs (Initial Public Offering) and Secondary Offerings.
What Is the Difference Between Cash Balance and Buying Power on Webull?
While related, cash balance and buying power have subtle differences.
Cash balance refers to the actual amount of real money you have deposited into your Webull account. On the other hand, buying power is the maximum dollar amount available for placing trades.
The value of your buying power can be your cash balance, but it could also be multiplied by leverages (specifically on margin accounts). Both are affected by whether or not you’re using “borrowed money” to trade.
For example, if you make an initial deposit of $5,000, then that amount, once settled, is your cash balance. If done on a margin account, this typically allows you to initially borrow up to 50% of the cost of the securities you want to purchase.
This means that your buying power can be doubled, and you now have an extra $5000 to trade with, which is one of the benefits of having a margin account. This added feature clearly distinguishes cash balance from buying power.
Can You Withdraw Your Cash Balance From Webull?
The simple, straightforward answer to this question is yes.
You can withdraw your cash balance from Webull.
Just take note of the factors that could affect their availability, which has been addressed in an earlier question.
Why Is Your Webull Cash Balance Negative?
Your cash balance will appear negative if the deposit you have made hasn’t settled and you are trading on provisional credit.
Again, this means that you are borrowing money from Webull to trade. Provisional credit is free of charge in cash accounts.
Similarly, any stocks you purchase on a margin account could appear as a negative balance if you’re not trading using your actual cash balance or settled funds.
How Can You Fix a Negative Cash Balance on Webull?
In most cases, a negative cash balance just fixes itself once your deposit settles. What happens is that the negative balance is automatically deducted or debited from your deposit amount.
Sometimes, when trading on margin, it could be that the profits you’ve made are enough to cover the negative balance. Normally, however, Webull does charge interest on margin accounts, which is one way they earn money.
Can You Withdraw Money From Webull if You Have a Negative Cash Balance?
Sadly, no. Because your withdrawable cash is incorporated within your cash balance, it’s not possible to take any of it out of your Webull account if it’s in the negative. You must wait for certain funds to settle first before attempting to initiate a withdrawal.
How Long Does Cash Balance Take To Settle On Webull?
It depends on the source of the funds or where they’re coming from. If you deposited money via ACH, it could take up to 4 business days to settle. Domestic wires take two business days if it’s via wire transfer, and international wires can take up to 5 business days.
If you’re talking about proceeds from stocks, it’s still T+2 or the trading day plus two business days.
Sources:
Webull: Why can't I withdraw my cash immediately?
Webull: Margin vs. Cash accounts
