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eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
So, you want to open a brokerage account and begin investing – but where do you even start? Opening a stock account can seem daunting for a beginner, which is why our experts put together this guide on the best way to do it.
These step-by-step instructions will describe how to open a brokerage account, using the Webull platform for clarity. Note that the general principles of all online brokers are similar, though, so you can apply this knowledge across platforms as well.
Before we get into how to open a stock account, we must first address an essential consideration: which broker should you choose?
Choosing your online trading platform is the first step to opening a trading account, but you should carefully consider your options before you dive in. Think about what type of assets you want to trade, which platform you prefer to use, what you are willing to pay, and reliability.
For example, if you are interested in trading stocks, options, and cryptocurrencies, then you should look for a broker that allows you to manage all of those on their platforms. Some online brokers do not provide access to assets like mutual funds, which may also play a role in your decision.
Similarly, you must take into account your individual investment goals, like whether you are moving funds from a 401k to an IRA, or simply funding a Roth IRA. Not all brokers will give you the option to trade in these accounts, so make sure the broker you choose has offerings that are compatible with your goals.
We chose to use Webull for this guide because they offer a comprehensive trading platform. They allow you to trade stocks, ETFs, cryptocurrencies, and options on a convenient and user-friendly platform – without any commissions! Likewise, you are rewarded with free stocks for registration, which is a bonus.
For a more in-depth description of the reasoning behind our choice, take a look at our comparison between the Webull and Robinhood brokerage accounts.
Trading Fees
Trading fees are a top consideration when choosing a broker. Your goal is to maximize your returns, and commissions can slowly eat up your gains and principal. As such, you should choose a broker that does not charge you a fee every time you buy and sell stocks or crypto.
Webull’s platform is completely commission-free. They leverage technology to provide transparent trades at no cost, and they impose no deposit minimums. That means you can make the most out of your investments and maximize your returns!
Reliability
Reliability is also a factor in determining which broker to use. Remember that you are trusting your money with the broker, so you need an online platform that is trustworthy and reliable.
Webull is regulated by both FINRA and the SEC. That means they must comply with all the laws designed to protect investors. They are also a member of SIPC, which protects your deposited funds should the online broker experience financial issues.
This protection covers $250,000 of cash and up to $500,000 of securities, so you can be confident that your money is safe. Likewise, Webull clears its funds through Apex Clearing, which is a well-known name in the industry.
Their platform is also reliable and built to support day trading. They have high-level encryptions to keep your account secured, too.
Why We Chose Webull
As you go through the decision-making process to choose an online broker, it can be helpful to analyze comparisons between them. We have already done this for Webull and Robinhood, so you don’t have to! Let’s dive into some of the key reasons we choose Webull as the top trading platform.
At first glance, it may seem like these two platforms – and many of the other online brokers – are very similar. Most have a web platform and mobile trading tools that allow you to buy and sell stocks, options, crypto, ETFs, and more. Likewise, they are all regulated by FINRA and the SEC, so they are required to follow the same laws.
There are several key differences, though, which make Webull our top choice.
For starters, Webull offers desktop trading software that you can download to your Mac or PC. It can be used for trading and includes a wide variety of research tools for technical and fundamental analysis. They also give users access to 14 different drawing tools, live quotes, and historical tables.
Not only does Robinhood not provide a desktop application, but they also have a much smaller scope of indicators. Webull has an impressive 47 indicators to help you develop your investment strategy compared to Robinhood’s 5. The more information you have available, the better!
These research capabilities are why Webull is also the better platform for day trading. The charting tools and second-level quotation options give you a competitive edge to capture opportunities in the market. In other words, Robinhood doesn’t have the essential features day traders need to be successful.
Another reason that we chose Webull is that it is the better option for new investors. By providing users access to a demo account that uses virtual money, they can get a feel for the platform and gain trading experience – without risking real funds.
Step 2: Sign Up on Their Website
Once you choose a broker, the next step is to sign up on their website. You will need to create an account with the online platform, including a username and password so that you can access the site again later.
Start by navigating to the Webull website. There will be a button on the top of the page that says ‘Sign Up’ – click this to launch the setup screen. Here you will be given two options: email or mobile sign up.
If you prefer to manage your account through your email you can choose that option – or opt for mobile sign up to complete the verification with your phone number.
Sign Up on Webull
Enter your email address and create a password. Then click on ‘Get Code’ to receive a verification code in your email inbox. Input the code in the appropriate area and choose Sign Up.
The website will then navigate to your account home page. Click on the open account button that appears in the center of the page:
How to Open Account and Get Free Stocks on Webull
This will take you to the next step on how to open a brokerage account, which involves verifying your identity.
Step 3: Verify Your Account and Provide Personal Details
Opening a brokerage account requires you to verify your account and provide personal details. FINRA and the SEC require brokers to identify their customers and follow specific procedures, so you will need this information to prove your identity and residency.
Webull makes this process seamless since all of it can be completed digitally. While some brokers require you to provide physical copies of your driver’s license or other residency documents, but Webull allows you to do this all online.
Here are some of the documents you can use to verify your identity:
Social Security Number
Driver’s License
Passport
National ID Card
You will need to upload a picture of your identity documents to start the verification process:
Verification on Webull
The photos must be clear and legible so that your account can be verified as soon as possible. The next page will ask you to fill out more information, like your name, date of birth, marital status, social security number, phone, and address. Again, these details are necessary to comply with federal customer identification regulations.
You will also be prompted to answer questions about your risk tolerance, liquidity needs, net worth, and annual income. These answers allow Webull to determine your investment experience and suitability.
The next section involves answering yes or no questions about your relationship to publicly traded companies, governments, and FINRA. The goal here is to determine what regulatory implications your account might have – if you are unsure how to answer them, the answer is likely no.
Once you have answered all the questions and entered your details, you must declare the accuracy of those statements. Choosing ‘I Agree’ confirms, under perjury, that everything you listed is accurate and true.
Step 4: Choose Your Account Type
Now that you have provided your personal information, you must choose your account type. The answer here will vary depending on what your investing goals are, and you will need to decide between a cash or margin account.
How to Choose Account Type on Webull
Cash accounts are stock accounts that require you to pay for your trades in full. That means whenever you buy stocks or options, you must deposit enough funds into the account to cover the cost.
Margin accounts allow you to leverage your capital – and the assets you own – to buy additional stocks or securities. They can boost your investment success and increase your returns but come with the risk of greater losses.
If you wish to trade options, sell short, or use leverage, then you will need to select a margin account. Selecting this option also requires you to read the Margin Disclosure Statement, which describes the requirements and risks related to trading in a margin account.
Here you will also decide whether you wish to have access to cryptocurrencies. Simply check the box to apply for Crypto Trading on the platform:
How to Choose Crypto Trading on Webull
After you make your selections, you will be prompted to verify your email and submit your application. Before you proceed, take the time to review your inputs and ensure that everything is accurate. If you are ready to proceed, click Submit.
Step 5: Make a Deposit
As soon as your account is open and confirmed, you can begin trading. Most account applications are approved automatically within one to two business days. However, there are times when additional verification is needed. If this occurs, the application approval process may be extended and Webull will contact you to complete additional steps.
When your account is approved you will receive an email notification. That means you are officially an investor, and it is time to make a deposit!
Deposit Making on Webull
To do this, log into your account and find your account status page. You will be prompted to make a deposit so that you can start buying and selling securities. Deposits can be made via ACH or Wire, but most choose the ACH option since it is free.
Input your banking information and select a verification option. Your options include real-time verification – which is instant – or micro-deposit verification that can take one or two business days. Note that only checking and savings accounts are eligible for depositing funds into your Webull account.
Once you locate the financial institution and enter your credentials, you can choose the amount to deposit. The daily maximum for deposits here is $50,000. It will take up to five business days to process the deposit, but Webull provides a provisional credit that allows you to trade right away.
You will be immediately notified of the amount of your provisional credit but know that it will vary based on your account history and deposit amount.
Step 6: Protect Your Account
The next step in how to open a brokerage account is to protect your new account. Webull will prompt you to select a trading password, which is not the same as your existing login credentials.
You will be required to enter the trading password each time you make a deposit, initiate a trade, or request a withdrawal. As such, it is essential that you choose something that you will remember but is not easy to guess.
Before you can select the password, you must type in your birthday. This is an extra security measure put in place to ensure you are authorized to set the trading password. Once you do this, you can enter the 6-digit trading password of your choosing.
After you confirm it, you can select security questions that will be used as a second level of validation. In other words, you will need to answer these questions if you ever wish to retrieve your trading password.
Step 7: Learn How to Use the Trading Platform
Learning how to use the trading platform is the next step in the process. Webull provides extensive technical and fundamental analysis tools so that you can develop your trading strategies.
Take some time to experiment with the charting features, stock screeners, and news options available on the platform. You can even engage in paper trading – which doesn’t require real money – to get a feel for the tool and learn how to place orders.
One of the best reasons to open a brokerage account with Webull is that you get 2 free stocks!
To get the first one, you simply need to register with the platform. Think of it as a welcome bonus that rewards you with a stock that ranges in value from $3 to $300.
So, how do you get the second free stock?
All you need to do to get the other complimentary stock is to deposit at least $5. Once the transaction settles, which can take up to 5 business days, you will get a stock that ranges from $8 to $2,000. Note that you must make the $5 deposit no later than 30 days after you open the account.
The securities are assigned randomly, and you can claim them by going to the ‘FREE STOCK’ tab in the application.
FAQ
What should you look for when choosing an online broker?
Consider the types of accounts they have available (IRA, brokerage, etc.) and the assets they allow you to trade. If you want to buy and sell stocks, crypto, and options in the same place, then you need a broker that can manage all of them.
What information do you need to provide to open a brokerage account?
Opening a stock account requires you to submit personal information to the broker, like your name, address, social security number, and driver’s license. They will need this data to validate your identity per federal regulations.
Does it cost anything to open a brokerage account?
There is no cost to open a stock account – however, you will need to deposit funds before you start buying and selling securities.
How can I get free stocks for opening a trading account?
When you open a brokerage account with Webull, you will receive a free stock as a welcome bonus. You can earn another free stock if you deposit $5 within the first 30 days of account activation.
Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data. He is also an educator in the field of finance and technology.
As an author for Traders Union, he contributes his deep analytical insights on various topics, taking into account various aspects.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
The topics he covers include trading signals, cryptocurrencies, Forex brokers, stock brokers, expert advisors, binary options. He has also worked on the ratings of brokers and many other materials.
Dr. BJ Johnson’s motto: It always seems impossible until it’s done. You can do it.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.
