(Bloomberg) — Webull Financial is now offering futures and commodities trading as investors look for more ways to hedge against price movements without owning an underlying asset.
The online brokerage app, which is preparing to go public, is offering the service initially to US investors with plans to expand globally in the future, it said in a statement on Monday.
“Understanding the importance of using futures contracts is useful for all investors looking to diversify their portfolios,” Arianne Adams, chief strategist and head of derivatives at Webull, said in prepared comments.
Futures contracts give investors the opportunity to bet on the value of a commodity at a future date. They are traded on exchanges such as CME Group Inc., the largest U.S. futures exchange, and require a brokerage account that has been approved to trade futures contracts. They can also be used as a hedge, to protect against volatility or unexpected events.
Webull, which offers commission-free trading, started in 2018 as a stock trading platform. It later expanded into options to become one of the top ten retail brokerage platforms in the US. Retail brokerage apps like Webull gained traction during the pandemic, when day trading became popular with investors stuck at home. Rival brokerage apps such as Charles Schwab, E*Trade and TastyTrade already offer futures trading as well.
After a period of setbacks, Webull is now preparing to go public by teaming up with an empty control vehicle, or SPAC. The online brokerage announced a deal last month with SK Growth Opportunities Corp. giving the combined company a pro forma business value of approximately $7.3 billion. They plan to list on the Nasdaq once they clear some approvals.
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Webull says it has 20 million registered users and operates in 15 regions worldwide. The company signed a deal in 2021 to become the official basketball jersey patch partner of the NBA's Brooklyn Nets and to be featured on the jerseys of the WNBA's New York Liberty.