Webull Financial LLC, an independent, self-directed broker dealer focused on zero-commission trading and in-depth market data, today announced the official debut of Options Trading (https://www.webull.com/options). As the newest addition to Webull’s extensive list of trade offerings, Options Trading was added to the platform as a result of both customer feedback, and the company’s overarching goal to make Webull a top destination for all traders.

The official launch follows a hugely successful options Beta testing period, which prompted an overwhelmingly positive response from users who signed-up for this initial phase.

“Bringing options trading to our larger platform is something we have definitely been looking forward to,” said Anthony Denier, CEO of Webull. “We strive to bring the best tools to our users and, after seeing the enormous response during the beta phase, we knew options trading would be embraced by our growing user base.”

Available in the U.S. only, Options Trading is accessible on the latest versions of the Webull 6.0 mobile and desktop platforms (https://www.webull.com/introduce). Basics features of options trading include:
Option Contract: A stock option contract that is an agreement between a buyer and a seller to buy or sell a stock at a specific price within in a given time frame.
Call Option: A call option gives the buyer the right to buy the underlying security for a specified price and obliges the seller to sell the underlying security at that price.
Put Option: A put option gives the buyer the right to sell the underlying security at a specified price and obliges the put seller to buy the underlying security at that price.
Premium Option: The cash price the option buyer pays to the option seller.
Strike Price: The strike price is the pre-determined price at which the option contract becomes exercisable.
In/At/Out of the Money:
 In the Money. When an option contract is worth exercising, it is “in the money”. A call is in the money when the underlying stock price exceeds the strike price. A put is in the money when the underlying stock price falls below the strike price. Option buyers want the option contracts to be in the money.
 At the Money. An option is “at the money” when the market price equals the strike price.
 Out of the Money. An option is “out of the money” when it is not worth exercising. Option sellers want the option contracts to be out of the money.
Expiration Date: Options carry an expiration date which specify the last day the option contract exists. In the U.S., options allow buyers to exercise the rights at any time before and including the day of expiration. Any contracts owned that are at least $0.01 in the money at expiration will be automatically exercised. Those at or out of the money at expiration will expire.

Options trading is available from 9:30 a.m. – 4:00 p.m. ET every trading day, until the option is set to expire. Currently, Webull is working to expand into Level 3 Options Trading to bring more complex order types to its 11 million users worldwide.

Options involve risks and are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options(https://pic.webull.com/PDFs/CHARACTERISTICS_AND_RISKS_OF_STANDARDIZED_OPTIONS.pdf) before investing in options.

In addition to the launch of options, Webull has also launched a new IPO center. The stocks that will be listed recently will be displayed here. New stocks listed in March are nasdaq-dfphu (https://www.webull.com/quote/nasdaq-dfphu) and nasdaq-imra (https://www.webull.com/quote/nasdaq-imra).

In 1971, Charles Schwab launched a traditional brokerage firm. But the business did not take off until 1975, when the SEC ended fixed-rate commissions. Schwab knew that the future would be about the discount brokerage model.

To pull this off, he needed to invest heavily in technology, such as with online brokerage systems. Over the years, as the platforms changed–such as from proprietary services like AOL to the Internet to mobile apps–Schwab somehow found ways to adapt.

And yes, even though he is now 82, he still seems to be far from finished. This week his firm announced that commissions on US stock, options and ETFs will be $0.

“It’s encouraging in the broader context of corporate purpose and sustainability to see a firm stay true to its purpose and passion of making investing more affordable,”said Geoff Cole, who is the fintech senior manager with Grant Thornton.

Now for the traditional brokerage industry, the impact is certainly ominous. There will need to be a way to make up for the lost revenues, such as by innovating new services. There will also likely be more layoffs.

“Online brokers are already under pressure due to this year’s interest rate cuts,”said Arielle O’Shea, who is the investing and retirement specialist at NerdWallet. “Many generate revenue from banking divisions, or from interest earned on idle cash. Schwab is likely hoping this move will attract enough new assets to make up for that narrowing margin as well as the lost revenue from commissions.”

A Reckoning For Fintech Too?

Schwab’s move is a validation of the fintech industry, especially with the impact from the fast-growing Robinhood. The startups in the space have advantages like starting from a bank slate as well as having access to enormous amounts of venture capital.

“We’ve certainly seen that the rise of customer-centric fintech companies has pushed the industry in a more client-friendly direction, and part of that is lower fees,”said Adam Grealish, who is the Director of Investing at Betterment. “Fintech companies use technology to achieve lower operating costs and are able to pass the savings on to customers. This has forced incumbents to follow suit.”

Yet this is not to imply that fintechs are immune from challenges. Let’s face it, traditional brokers have inherent advantages, such as strong infrastructures, diverse service offerings and trusted brands. And besides, millions of people like talking to experts when it comes to their wealth.

“Unfortunately, I think in the short-term you will certainly see some attrition and consolidation among the start-ups whose sole selling point was free trading,”said Anthony Denier, who is the CEO of Webull. “There is more to investing than cost.”

The zero-commission strategy may actually be a tipping point, giving traditional brokers an edge in customer acquisition. According to a J.D. Power survey of self-directed (DIY) investors, the No. 1 reason for selecting a firm was “low fees.”

“This creates a challenge for fintechs,”said Mike Foy, who is a Senior Director of Wealth Management Practice at J.D. Power. “They will need to work harder to differentiate themselves from incumbents to continue to attract new investors seeking a low-cost provider.”

While fintechs have been innovators– such as with compelling UIs–there will probably need to be much more. For the most part, the history of financial services is about relentless commoditization. And it’s been firms with massive scale, like Schwab, that have been able to thrive. This will likely be the case with fintechs as well.

Yet despite all this, the ultimate impact should positive, encouraging more and more competition. “In the end, the consumer wins,”said Steven Nuckols, who is the president and founder of Wealth Compass Financial.

Source Link：https://www.forbes.com/sites/tomtaulli/2019/10/05/schwabs-zero-commission-bombshell–so-whats-next-for-fintech/#1b33269577f8