Sometimes when you trade on Webull their terminology can be unclear. What on earth is buying power? Are they trying to gamify the experience or is there something more to this? Let’s find out. In this article, I will walk you through all you need to know about Webull’s crypto buying power.
What is crypto buying power on Webull?
Your crypto buying power is just another way to say cash balance. Which is kind of annoying. Why don’t they just say cash or cash balance? For two reasons:
- Buying power sounds cooler. It does indeed gamify the experience. You think, huh, this is not cash. It’s just points in this app I am using. Kind of like a game
- Your buying power can be boosted if you have instant buying power
What is instant buying power?
When you transfer cash to Webull from your bank account you use a system called ACH. ACH stands for Automated Clearing House and is how banks make electronic transfers. The problem is that an ACH bank transfer takes up to 4 business days to settle.
Because Webull has a high degree of faith that the funds will settle they give you provisional funds in the interim. You can think of this as a loan except there is no interest rate.
For new accounts, the limit for instant buying funds is usually $1,000. But this can increase as you deposit more funds. Webull does not specify the details of the algorithm that decides on the amount.
So now your instant buying power is the cash balance you already had in the account plus the provisional cash that Webull has given you.
Webull won’t always give you this cash. It depends on their algorithm and the degree of certainty with which they feel they will get the funds. It also depends on the bank that you are making the transfer from.
Let’s take a look at an example.
Buying Power Example
So say you have a $300 cash balance on Webull. This means your buying power is $300.
Now imagine you decide to transfer $5,000 from your bank to your Webull account. Your buying power will increase to $1,300. Then when the ACH transfer settles after 4 days your buying power will be $4,300 provided you haven’t spent anything.
Please also note that if you have a margin account then this can also apply to your crypto buying power.
Instant Buying power delivery times
Your instant buying power will be credited depending on the timing of your transaction.
If you make the transfer before 9:30 AM then your account with be credited by 9:30 AM.
If you initiate the deposit between 9:30 AM and 4 PM then your account will be credited immediately.
However, if you make the transfer after 4 PM then your account will be credited the next day.
Common issues
Why do I have insufficient crypto buying power?
There could be a few reasons why Webull is showing you have insufficient buying power.
- You have made the wire transfer but Webull has decided not to offer instant buying power. This is the most common reason as some banks offer the option to reverse the wire transfer and in such cases, Webull does not take the risk of offering provisional credit.
- You may just need to wait it out until your deposit settles. While this takes only 4 business days, if you include a weekend it could mean waiting up to 6 days.
- You have used your funds to day trade or buy other stuff and once you sold them the funds haven’t settled yet.
- In some instances, Webull decides not to give instant buying power which means you have insufficient funds to make a trade until the transfer is processed
- You can’t use instant buying power with options. Check if your account is an options account. You may need to open a crypto account if you want to use instant buying power.
- Check your internet connection for connectivity issues and make sure Webull is not experiencing a service outage. Also, note that crypto trading is not available between 5:30 and 6:30 PM ET every day.
Steps to get buying power on Webull
- Download the Webull app and set up an account
- You will need to provide KYC details and connect a bank account.
- Make a wire transfer
- Next, open a crypto account by clicking on the webull logo in the bottom menu
- Select “Manage Brokerage Account” in the top right corner
- Select apply now in the crypto trading tab
- Try to place a crypto trade
- Your crypto buying power will show at the bottom of your order
You have crypto buying power what next?
On Webull you can trade 36 pairs of cryptocurrencies against the US dollar. While Webull offers commission-free trading you should be aware that they mark up prices when you buy and sell by 1%. Like with any broker you have the option to buy fractional coins. This means that you don’t have to buy a whole Bitcoin if you don’t want to. Instead, you can buy a fraction of it.
There is no minimum deposit that you need to make in order to use Webull. Beyond crypto assets Webull allows you to invest in stocks, ETFs, mutual funds, options, and more.
When you buy crypto on Webull you can set a market order, a limit order, or a stop loss order. To place the order you will need to confirm your choice using two-factor authentication.
The crypto that you trade on Webull does not belong to you but Webulll does have plans to offer a wallet to its users in the future.
You can find out more about Webull’s plan for a wallet here:
Will Webull Offer a Crypto Wallet? Get the Full Low Down
However even though webull does not have a wallet it does offer you the option to transfer Bitcoin, Litecoin, and Bitcoin Cash to a different address.
When you trade crypto on Webull you are actually trading crypto with a company called Apex Crypto.
Buying power on Webull vs other platforms
Almost all brokerages offer buying power to their customers. A notable exception is eToro which prefers not to use the term. However, brokerages that originate in the United States such as Robinhood, TD Ameritrade, and Fidelity all use the term buying power.
On the other hand, crypto-specific exchanges such as Coinbase, Binance, and the like do not use the term. If you want to be able to purchase instantly you need to use a credit or debit card which incurs higher fees.
If you want the full low down on trading crypto with Webull check out my article below
What Is Webull Crypto Trading: a Comprehensive Review
In this review, I will dive into the details of my experience with Webull Crypto Trading, examining its strengths and weaknesses, and provide my overall thoughts on the platform. Read more.