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Difference Between Cash Balance And Buying Power (In Webull)

Difference Between Cash Balance And Buying Power (In Webull)

Nowadays, online brokers and brokerage firms are top-rated because they offer secure interfaces that let you trade quickly, analyze trends, and borrow money to barter.

You can get confused by your stock account’s terminology and figures if you’re a newbie.

Two of these terms are cash balance and buying power.

The buying power of an investor is how much money they have at their disposal to buy securities. It consists of the cash in the brokerage account plus all the margin.

On the other hand, the cash balance is the amount of cash readily available in your account. Subtract the securities you have from the total account value, and you’ll have your cash balance.

In this article, I’ll discuss these two terms concerning Webull.

Image of a man doing online trading on his tablet.
Online trading is very popular in this modern era.

What Does Buying Power Mean On Webull?

An investor’s buying power is how much cash they have in the account plus any margin available.

The number of additional securities you can buy (or short) is also your buying power. Your cash balance usually reflects this.

The buying power varies depending on what type of account and how long you hold the securities. If you have a margin, it’s a multiple of the amount you own minus your deposits.

There are two types of buying power for margin accounts;

  • Overnight Buying Power
  • Day Trading Buying Power

Overnight Buying Power (ONBP) is how much you can spend on buying stocks and holding them overnight. Most of the time, it’s double the cash you have.

Day Trade Buying Power (DTBP) describes the amount of money you have in your account to place trades on a particular day.

DTBP is figured at the start of the day, and it won’t change based on overnight sales or deposits. It will take a day for the DTBP from these actions to show up in your account.

What Does Cash Balance Mean On Webull?

The cash balance in Webull refers to how much cash you have in your account.

Just take the total value of your account, and subtract your holdings. Now you’ve got your cash balance. You can withdraw this much money from your account if you want.

The actual amount of money you’ve deposited in your account and the most liquid funds. The cash account balance indicates the amount of money that can be withdrawn right away or the total amount you can buy securities.

Know The Difference

The cash balance and buying power are almost the same things with a slight difference.

  • The cash balance is the actual amount you have deposited into your account, while the buying power is the cash balance multiplied with leverage if you are using any.
  • Cash balance means your purchase of power while buying power is your ability to purchase more securities.
  • Moreover, cash balance refers to the money in hand, whereas buying power refers to all your resources, including your credit cards.

How Do You Cash Out Buying Power On Webull?

You have to follow a few steps to cash out buying power on Webull.

  • Just tap the Webull logo at the bottom middle of the screen to get to the app’s homepage.
  • Go to the “Transfers” tab on the top of the screen.
  • Click “Withdraw.”
  • Enter the required amount you want to withdraw.

After completing this process, you’ll have your cash in one to two days.

Why Is Buying Power Lower Than Cash Balance?

The lower buying power of an investor depends on various things like the broker’s margin rate, owned securities, and unsettled trade.

Your buying power might be low because of many reasons.

Your stocks might have fallen, or you have some unsettled trade. Your margin fluctuates with your cash balance. If your cash balance increase or decrease, so is your margin.

Does Webull Have Instant Buying Power?

Webull gives you instant buying power even if your ACH deposit is still in transit.

It’s a very prominent feature of Webull that gives you the immediate buying power to start your trading. Your ACH deposit takes at least 3 to 4 days to complete its transition.

However, you don’t have to wait this long to start your trade. Once you’ve initiated the transition process, you can buy assets and securities.

Here is a short video about the buying power in digital trading.

WATCH & LEARN: What is Buying Power?

How Long Does It Take To Get Crypto Buying Power On Webull?

You can get crypto buying power on Webull instantly.

It usually takes four business days for an ACH transfer to settle.

Webull gives you a partial amount as instant credit, so you can start trading before it pays ultimately.

Your instant buying power depends on what you deposit, what kind of account you have, how much cash you have, what your positions are worth, and your credit score.

What Is Insufficient Crypto Buying Power In Webull?

It means you don’t have enough buying power for crypto trading.

There are some reasons why you have insufficient buying power:

  • You’ve got an open order locking in your buying power.
  • Your buying power isn’t enough to cover the order.

If you have less than the required amount to make a purchase, your buying power will also decrease.

Is Webull Good For Crypto?

Webull is pretty good for crypto trading. However, it doesn’t have all the features of a full crypto exchange.

When it comes to stock trading apps that let you invest in crypto, too, Webull is a good choice.

Keep in mind that it’s not a full-fledged crypto exchange. It’s a nice web and mobile platform, and the trading fees are reasonable.

The only fee Webull charges for crypto trading is a spread of 100 basis points. You can expect to pay about 1% overall when buying or selling crypto on Webull.

Final Takeaway

Webull is a renowned digital trading platform where you can trade by buying and selling stocks and other online securities.

Before starting to work on any online platform, you need to understand a few terms like cash balance and buying power.

Cash price is the amount of money you have in your account. It’s the amount you can withdraw at any time from your account. It doesn’t include your holdings.

On the other hand, buying power is the sum of money present in your account and all the margins and securities you hold on Webull. It depends on what kind of account you have and how long you’ve saved the securities. You can get more buying power if you have a different sort of account and keep the securities for longer.

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Click here to learn more about these Webull terms.

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