Can you sell ETFs and stocks short on WeBull? Does WeBull offer inverse ETFs and buying put options?

Can You Short Sell on WeBull?

The ability to short stocks is a great skill to have in your back pocket as it effectively doubles your universe of investing options. This is especially true for fundamental investors that spend lots of time researching companies to invest in, as being able to short a company you’ve found to be a poor investment allows you to still make a profit off of your invested time (whereas a long only investor could not). This article will walk you through everything you need to know about shorting stocks on Webull.

Short Selling on Webull: How Does it Work?

Simply put, short selling a stock is the opposite of having a long position – you are betting that its price will fall (and profiting if/when it does). When you place a short sell order, Webull acts as the intermediary by “borrowing” these shares from an investor and “selling” them in the market on your behalf. When you close your short position, Webull “buys” the shares back in the open market and returns them to the lender (who is likely unaware that they were even lending their shares!).

The difference between the price you sold the shares at and the price you re-purchased them at is your gain/loss – if you bought them back at a lower price you made money and vice versa. Webull acts as the middle man doing all this behind the scenes so that you don’t need to physically go looking for someone who owns the shares and is willing to lend them to you.

What is Margin?

When you are short a stock and its price rises, this creates an unrealized loss in your account because if you were to close the short position right then and there you would have to pay a higher price to buy the shares back than you sold them for. This creates a risk for Webull because for volatile stocks that could go up a lot very quickly, they need to be confident that you will have sufficient cash to buy back the shares at a much higher price so they can return them to the lender. This is where margin comes into play.

Margin simply refers to the collateral in your account (usually cash or low-risk securities) that gives Webull some level of comfort that you have the ability to close a short position at a loss. For every short position you have, Webull will require a certain margin balance to act as a cushion to protect them if your short positions are in the red. The required margin balance depends on several factors, including the volatility of the stocks you are short. Webull (and all U.S. brokers) are also legally required to make sure that any of their accounts that are enabled for short selling (called margin accounts) have at least $2,000.

Margin Rates

Margin rates refer to the interest rate that your broker charges you to borrow funds. In addition to the ability to short stocks, a margin account with Webull allows you to borrow capital to increase your buying power (or shorting power). The margin rates that Webull charges are fairly standard in the industry and vary based on the amount borrowed. The below screenshot shows the rates charged for different levels of borrowing, which range from ~7% for balances below $25,000 to ~4% for balances greater than $3,000,000.

Debit Balance Margin Rate
under $25,000 6.99%
$25,000.01 - $100,000 6.49%
$100,000.01 - $250,000 5.99%
$250,000.01 - $500,000 5.49%
$500,000.01 - 1,000,000 4.99%
1,000,000.01 - 3,000,000 4.49%
>3,000,000.00 3.99%

Placing a Short Sell on Webull

Placing a short sell on Webull is similar to buying stock except you will choose “Sell” for the order type. In the screenshot below, we are placing an order to short 100 shares of AAPL at a limit price of $187. This means Webull will sell 100 shares of AAPL for us only if they can do so at a price of $187 or higher.


WeBull Short Stock


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Closing a Short Position

When you are ready to close your short position, simply place a buy order to re-purchase the shares. Continuing from the previous example, let’s say we want to close our AAPL short position at the current market price. We would enter a market order to buy 100 shares of AAPL.


WeBull Shorting Stocks


Can I Use the Proceeds from a Short Sale?

Even though opening a short position means the broker has sold borrowed shares on your behalf, the proceeds from this sale are not available for you to use. Webull holds onto these proceeds as they will be required to buy the shares back when the short is closed. This cash is held as collateral to ensure that Webull will be able to return the borrowed shares to their rightful account.

Marking to Market

At the end of each trading day, Webull will mark to market your short positions, meaning that they will calculate the ending value of the shorted shares in your account. This amount will then be compared to the value of these positions when you initiated them, with the difference representing your unrealized gain or loss. If you have an unrealized loss, Webull may require you to post additional collateral to your account to ensure you could close the short at current prices. Any unrealized gain (or loss) will only be realized once you close the short position.

Risks of Short Selling

As with any investments, short selling comes with risks, and we want to point out that short selling exposes investors to some additional risks that are not present with long only investing. With a long position, the most you can lose is the amount you paid for a stock, but your losses from a short position are potentially unlimited since there is no cap on how high a stock price can go (imagine if you shorted AAPL 20 years ago…). Another risk unique to short sellers is that Webull doesn’t guarantee that you’ll be able to maintain your short position forever and could therefore close the position without your discretion if they are unable to continue borrowing the shares.

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