How Webull Margin Rates Work: A Complete Guide
Trading on margin can be a risky endeavor, and those who want to limit downside will want to trade for the best rates possible. Trading on margin used to be limited to sophisticated investors working for big-name investment banks, but these days, trading on margin is becoming more and more popular with retail traders on the multitude of online trading platforms, like Webull and Alpaca. Webull is becoming more and more prevalent as an ideal platform for trading, but what are its margin rates like?
This guide unpacks Webull’s margin rates from top to bottom, how it works, what it costs, who it benefits most, and how to use it intentionally as a strategic weapon, not a shortcut.
How Webull margin accounts work
Trading on margin means borrowing money from a broker to buy more securities than one could with one's own funds. It increases both potential gains and potential losses because the borrowed funds must be repaid with interest. A margin account on Webull lets an investor control more shares than their cash alone would allow by borrowing from the broker. It provides up to 2× leverage for overnight positions and up to 4× leverage for intraday trading, subject to account approval and balance requirements.
A simple example of how this works is as follows: With $5,000 in cash and 2× overnight leverage, a person could hold $10,000 worth of stock. If that stock rises 10%, the position is now worth $11,000, meaning the trader pockets a $1,000 gain on just $5,000 of their own money, a 20% return. The other side of this is that if the stock falls 10%, the position drops to $9,000, and the trader loses $1,000, also a 20% loss on their cash. That’s how the amplification of Webull’s 2× overnight and up to 4× intraday leverage can deliver big swings in either direction.
Below is a table with the numbers on how margin trading works within Webull's parameters.
| Price Change | Position Value (No Leverage) | % Return on Cash (No Leverage) | Position Value (2×) | % Return on Cash (2×) | Position Value (4×) | % Return on Cash (4×) |
|---|---|---|---|---|---|---|
| -25% | $3,750 | -25% | $7,500 | -50% | $15,000 | -100% |
| -10% | $4,500 | -10% | $9,000 | -20% | $18,000 | -40% |
| -5% | $4,750 | -5% | $9,500 | -10% | $19,000 | -20% |
| 0% | $5,000 | 0% | $10,000 | 0% | $20,000 | 0% |
| +5% | $5,250 | +5% | $10,500 | +10% | $21,000 | +20% |
| +10% | $5,500 | +10% | $11,000 | +20% | $22,000 | +40% |
| +25% | $6,250 | +25% | $12,500 | +50% | $25,000 | +100% |
Webull margin interest rates
When traders trade on. margin, they are borrowing money from someone else, and that, of course, comes with a fee in the form of an interest rate. In the case of WeBull, their interest rates are generally competitive and just like everyone else, are correlated with the Fed's current benchmark rate. Usually, when dealing with margin trading interest rates, the formula is (Fed base + x%)
Webull Standard Account margin interest rates
Webull has a standard flat rate that hovers around 8.74% currently. Whether you’re borrowing $5,000 or $5 million, the flat rate stays the same. It’s simple and predictable, but not considered cheap.
Webull Premium Account margin interest rates
Webull Premium users unlock tiered interest rates that get lower as their borrowing increases. The more you borrow, the less you pay per dollar, and for serious margin users, this creates meaningful savings. This rings especially true for those who hold positions for longer than a few days and use leverage across multiple trades. Rates can drop as low as 4.65% for high-volume borrowers.
| Margin Balance | Interest Rate |
|---|---|
| Under $25,000 | 8.99% |
| $25,000.01 – $100,000 | 8.49% |
| $100,000.01 – $250,000 | 7.99% |
| $250,000.01 – $500,000 | 7.49% |
| $500,000.01 – $1,000,000 | 6.49% |
| $1,000,000.01 – $3,000,000 | 5.99% |
| Over $3,000,000 | 4.99% |
It must be noted here that, regardless of tier, margin interest compounds quietly in the background. That’s why seasoned investors run the numbers before hitting “Buy.” Leverage works best when the cost is understood and accounted for upfront and not when it sneaks up and steals your gains.
Let’s break it out visually:💡 Pro Tip:
When margin helps, and when it hurts
Used wisely, margin can be a powerful tool for compounding gains, seizing short-term opportunities, and scaling high-conviction trades. But without a plan, and without awareness of the real cost, it can quietly erode your returns or worse, magnify your losses.
Let’s walk through both sides of the equation: when margin works in your favor, and when it becomes a drag on your portfolio.
Borrowing $25,000 for a year: The cost breakdown
To understand the true cost of using Webull’s margin, let’s look at a simple scenario. Suppose you borrow $25,000 and hold that position for an entire year. Here’s how the numbers shake out:
| User Type | APR | Annual Interest |
|---|---|---|
| Standard | 8.74% | $2,185 |
| Premium | 5.95% | $1,487.50 |
That’s a difference of nearly $700, just in interest, for the same amount of leverage. Over time, and across multiple trades, those costs compound. Premium users save money on every dollar borrowed, and those savings directly improve net returns. But even at the lower rate, $1,487.50 is still a real cost. That means your investment needs to generate at least that much in gains, just to break even on the borrowed portion. If it doesn’t, you’re losing money even if the stock went up.
When margin can backfire
Margin feels like freedom, until the market takes a dive. It's like that friend or partner who you put all your hopes and dreams in, only to turn against you and break your heart. If you hold a leveraged position overnight and the market drops 4%, you’re hit twice: once by the loss in value, and again by interest on the borrowed funds. If the decline is steep enough, you can trigger a margin call, which will force you to put up cash or force liquidation. If you are easily susceptible to stress and anxiety, consider sticking to a long-term ETF.
What about Nvidia? Everyone's favorite stock market darling. Does it have more growth ahead, and is a leverage play worth it? We spoke to Julian Merrick, the founder of Super Trader, about his thoughts.
'The price of Nvidia has been through the roof, but making money hasn't been the main goal. Their money has been used to build up their AI system, do research and development, and buy other businesses. Could the amount paid go up? In the end, yes. But I don't think there will be a big jump while they're still tall and thin. In the long run, they want to take over the market and then pay back their owners."
💡 Remember:
Margin doesn’t create risk; it magnifies it. If you wouldn’t take a trade in cash, don’t take it with debt, as the repercussions can be worse.
Scenario 1: Margin helps, a 3-month swing trade with a 12% gain
You spot a strong setup in a tech stock and want to scale in bigger. You use margin to double your exposure and hold the position for 3 months. Here's how it plays out:
| Details | Amount |
|---|---|
| Total trade size | $50,000 |
| Your cash | $25,000 |
| Borrowed on margin | $25,000 |
| Holding period | 3 months |
| Stock gain | +12% |
| Gross return (on $50K) | $6,000 |
| Interest (Standard 8.74%) | ~$546 |
| Net return (after interest) | $5,454 |
| Net return on your cash | 21.8% |
💡 Takeaway:
You turned a 12% market gain into 21.8% net return on your capital, even after interest. That’s smart leverage in action. The key? Strong conviction, tight holding period, and a high-probability setup. Not all margin trades are created equal. The length of your holding period, your stock’s performance, and the interest rate you’re paying all work together to determine how profitable, or painful, your trade will be.
Scenario 2: Margin hurts, a 6-month hold with a 5% return
You use margin on a dividend stock that slowly climbs over half a year. Seems pretty straightforward and harmless until interest costs start to chip away.
| Details | Amount |
|---|---|
| Total trade size | $50,000 |
| Your cash | $25,000 |
| Borrowed on margin | $25,000 |
| Holding period | 6 months |
| Stock gain | +5% |
| Gross return (on $50K) | $2,500 |
| Interest (Standard 8.74%) | ~$1,093 |
| Net return (after interest) | $1,407 |
| Net return on your cash | 5.6% |
💡 Takeaway:
Despite the stock going up, your net return barely beats a savings account. You took on amplified risk for modest reward. If volatility had kicked in, this trade could’ve easily gone the other way—margin interest doesn’t care.
To show how this plays out in real terms, here are two margin scenarios with identical trade sizes but different outcomes. One trade captures strong short-term momentum, the other plays it safer but for longer. Both use Webull’s standard margin rate of 8.74%. The results? A clear reminder that time and performance directly impact your net return when you’re using borrowed capital.
What triggers a Webull margin call?
Margin calls are where theory becomes reality, and often not the kind you want. A margin call happens when your account equity falls below Webull’s 25% maintenance requirement. That means your cash (plus gains) must cover at least a quarter of the total market value of the securities you’ve borrowed against.
Example:
You buy $10,000 worth of stock using $5,000 of your own money and $5,000 on margin. Everything seems fine, until the stock dips 30%.
Now your holdings are only worth $7,000, but you still owe the full $5,000. That means your equity is just $2,000 (your share of the value). Your equity percentage? 28.5%. Still okay, barely.
But if the stock drops another 10%, your position is now worth $6,000. With $5,000 borrowed, your equity is only $1,000, or 16.6%. That’s below Webull’s 25% minimum, and that triggers a margin call.
- Webull will notify you to deposit more cash or sell other holdings to bring your equity back above the threshold.
- If you don’t act fast enough, they’ll liquidate positions automatically, without your input, and potentially at a loss.
- You may not even have time to react during high-volatility sessions.
Long-term holders: tread carefully
Now flip the script. If you’re holding a position for weeks or months, or even longer (Warren Buffet style), margin works very differently. That borrowed capital starts charging rent, daily interest, and it doesn’t stop until you pay it back. Let’s say you’re using margin to buy a slow-moving dividend stock. Maybe it yields 3% annually. But if you’re paying 8.74% APR on the borrowed amount, your margin is literally costing more than the stock is earning.
The 8.74% compounds quietly over time| Holding Period | Impact of Interest on Gains (8.74% APR) |
|---|---|
| 3 months | You’ve eaten into most of your gains |
| 6 months | You’re barely breaking even |
| 12 months | You’re likely negative—even if the stock went up |
📚 Rule of thumb for long-term investors:
If you wouldn’t take the trade without leverage, don’t force it with margin. Let your winners compound over time without giving returns back in interest.
Tax impact of margin interest
Margin interest may be tax-deductible—if you borrow to invest in taxable accounts like brokerage-held stocks or ETFs. But you can’t claim the deduction in tax-advantaged accounts like IRAs or Roths.
It only helps if you itemize deductions, and the deduction is limited to your net investment income. Any unused amount can carry forward to future years.
Final thoughts: Webull's margin rates are competitive, but use them wisely
Margin is a tool, and one that people should use cautiously. Remember, the more leverage you take on, the riskier it is, and you have the possibility of substantial losses. Conservative investors might be more suited to dividend investing as opposed to taking risky bets with leverage. All this being said, if you want to trade on margin, then WeBull offers a safe platform with competitive rates. Webull also offers crypto, but using margin on such a volatile asset can also be suspect. Trade on margin, but only trade on margin, treading very carefully after you feel you have the knowledge to risk that kind of capital.
FAQ
Can I switch from a cash account to a margin account on Webull?
Yes, you can upgrade your Webull cash account to a margin account directly through the app. You'll need to meet the minimum $2,000 balance requirement and agree to the terms of margin trading. Once approved, margin features will be unlocked automatically. The process typically takes 1–2 business days.
Does Webull charge margin interest on weekends and holidays?
Yes, Webull accrues margin interest every day, including weekends and market holidays. Even if the market is closed, the borrowed funds are still considered active loans. This means holding margin positions over long weekends or holiday breaks can increase your borrowing costs.
Can margin be used for options trading on Webull?
Yes, margin can be used to support certain options strategies on Webull, especially spreads and naked positions that require collateral. However, Webull has specific approval levels based on your experience and account balance. You’ll need to apply for options trading and may not qualify for higher-risk strategies without meeting stricter requirements.
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