What is a bond? A bond is a debt instrument that allows individuals to loan funds to a government or entity in return for original face value and interest at a later point in time. Because they are generally less volatile versus stocks, bonds serve as a core asset class of the financial markets and allow investors to further diversify their portfolios.
What types of bonds does Webull offer? At this time, US Treasury Bonds and Corporate Bonds are available.
Where will bonds be displayed after they are purchased? You will find your bond position in a separate section just below where you normally see your stock and option positions.
Which Webull platforms support bond trading? Bond trading is available on all Webull platforms, including:
- Mobile App
- Webull Desktop
- WebTrade
What is the coupon rate? The coupon is the interest rate that is to be paid annually on a bond. If a bond has a coupon rate of 4% and pays interest semiannually, the bond holder should expect to receive interest payments of 2% of face value every six months.
What is bond yield? While there are many iterations (such as Yield-to-Call and Yield-to-Maturity), bond yield is essentially the total return for holding that particular bond to its stated maturity. The coupon, along with the price paid, are among the primary factors that affect the yield of the bond.
What does bond maturity mean? Bond maturity is the time and date when the bond issuer pays the original bond value to the bond holder, plus any remaining accrued interest.
What happens if I hold a bond to maturity? Principal and any owed interest is expected to paid out and reflected in your account on the morning of the bond’s maturity date.
What fees are associated with trading bonds? If you purchase a bond on margin, you’ll be charged margin interest based on the applicable rate, calculated daily and billed in the middle of the month. Please consult our Fee Schedule for transaction costs associated with trading bonds.
What does this mean or how can I read this? “UST 1.75% 06/30/2024 9128286Z8(BOND)” UST is the Issuer of the Bond; 1.75% is the annual coupon rate, and 6/30/2024 is the maturity date.
What accounts are eligible to trade bonds? Bond trading is available in cash and margin brokerage accounts as well as IRAs.
What markup does Webull apply to Treasury trades? A 0.1% markup is applied to all treasury trades, regardless of size or term.
Where is the markup shown when placing a trade? This markup is reflected in the order book pricing and included in the “estimated total” on the trade ticket.
Does the markup apply to both buy and sell orders? Yes, the 0.1% markup applies to both buy and sell orders.
How is pricing calculated for Treasury trades? Net pricing is automatically calculated and matches the best available price for the quantity entered.
Can I see the exact markup amount before placing a trade? The exact dollar amount of the markup is shown on the trade preview screen.
Why does Webull apply a markup when some brokers do not? While other brokers may offer treasury trading with no markups, Webull applies a small 0.1% markup. On short-term treasuries, this has a greater impact on the annualized yield.
Example: A 0.1% markup on a 2-month treasury ≈ 0.6% reduction in annualized yield. For very short-term investments, alternatives like money markets or Webull Premium cash management may offer better rates.
What is accrued interest when purchasing a bond? When you purchase a bond, you may pay accrued interest to the seller for the time they held the bond since the last interest payment. This amount is recouped in your first interest payment.
How are Treasury bonds taxed? Interest from Treasury bonds is exempt from state taxes, but is taxable at the federal level.
Are bond transactions taxable events? Buying and selling bonds is a taxable event and will be reported on your 1099 for the applicable tax year.
Can bonds cause Good Faith Violations (GFVs) or margin calls? Bonds are subject to Good Faith Violations (GFVs) and margin calls if traded on unsettled funds or margin.
What happens if a margin call involving bonds is not met? If a margin call is not met by the due date, any asset in the account, including bonds, may be liquidated.
Where can I view bond profit and loss (P&L)? Bond P&L is not displayed on the My Positions page but is available under the P&L section on both mobile and desktop. This includes both interest income and capital gains/losses.
What is the margin requirement for bonds? Bonds have a 6% margin requirement and do not require a holding period to access margin leverage.
How can I access the Introduction to Bonds and Fixed Income Strategies learning courses? You can access Webull’s Introduction to Bonds and Fixed Income Strategies learning courses directly through the app or the Webull website. To access the Introduction to Bonds course, click here. To access the Fixed Income Strategies course, click here.
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