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Cash Account vs Margin Account Explained for Webull App

Understanding a cash account and margin account on Webull. I’ll be going over what a cash account is, what a margin account is, the requirements and rules of them all, and the benefits of each account. Then you’ll be able to understand these two types of accounts and hopefully use one that benefits you. And like always, this is not financial advice at all. I’ll be mainly focusing on Webull’s cash and margin account, sometimes you’ll see that most of these rules or guidelines apply to other brokerages as well, but you’ll just have to check out their rules and guideline for them. There might be small tweaks here and there, but for the most part, they are structured the same. Collect your free stocks here with Webull: ►https://act.webull.com/i/JUBJdYxwsEwQ... How To Open Up A Webull Account (Step-by-Step) ►   • How To Open Up A Webull Account (Step-by-S...   Investing With Webull For Beginners (Playlist): ►   • How To Open Up A Webull Account (Step-by-S...   So, what is a cash account? In the simplest term, it’s basically your own money. However much money you put inside that account, is what you have to invest. For a cash account, day trading rules does not apply because it’s your own money. You don’t need to have a certain amount of money like the $25,000 to start day trading and such. I know at least one of you have thought about that, right? The only thing you have to worry about is whether your funds has settled or unsettled to your account. So, let me give you an example. If on Monday you bought $100 worth of stock and on the same day you sold it for $120. That $120 is consider unsettled money until Wednesday. Most often Webull will immediately make the funds available in your account, but you can’t use your $120 of proceed to buy and sell on Tuesday. If you want to buy and sell the same day, wait it out for 2 business days when the funds have settled. So, what is a margin account? Simply put, it’s like borrowed money. You get to use or leverage the broker’s money. Because of this, you can make more money and lose a lot more money. And this is why I always say, “only invest in things that you actually know” because trading on margin is risky. For Webull, in order to have a margin account for margin trading you’ll need to have at least $2,000, net in the account. This will then enable you to do some short selling. And by the way, you can’t do short selling on a cash account, if you were wondering. And if you want to have a complete true margin account, you’ll need to have at least $25,000, net, and then you’ll be able to do unlimited day trades, including shorting stocks of course. And remember if you’re going to borrow something, you’re going to have to pay interest. With a margin account, you won’t have to worry about unsettle funds or such, the proceeds that you make from the sale will be available immediately for you to trade and that’s what’s good about a margin account. Note that if you have somewhere between $2,000-$25,000 in your margin account, and you want to day trade, you can’t do it frequently. If you make more than 3-day trades within 5 business days, you will be marked as a Pattern Day trader because you haven’t met the $25,000 minimum requirement. And if you keep on day trading multiple times in a week, your account can be suspended. So just be careful. Now let’s talk about the benefits of each account. For a cash account, it’s simple to have, easy to work it with. What you put in, is what you have to use. Perfect if you’re just trading a couple times a month. And just doing some long-term hold. For a margin account specifically for the one over $25,000, you can do unlimited day trade, you don’t need to wait for the funds to settle, you can short sell, borrow money, do some fancy option trading, and overall just more flexibility to build your portfolio by using the broker’s money. But it’s not all fine and dandy. The risk is greater when you’re borrowing money or stocks. If there’s a sudden change in the market and you’re on margin, then you can lose a lot of money. Although everything sounds nice, everything is also magnified by a lot. How To Get Approved For Webull Options Trading ►   • How To Get Approved For Webull Options Tra...   How To Get Approved For Webull Margin Option Trading ►   • How To Get Approved For Webull Margin Opti...   Legal Disclosure: I'm not a financial advisor nor a certified public accountant. These videos are for entertainment/educational purposes based off of my personal opinions. Investing in any type of investment involves risk and you need to do your own research or seek out a licensed professional if necessary. There is no guarantee that you'll gain or lose on investments.