Does Webull Trade Penny Stocks? A Guide

Does Webull Trade Penny Stocks?

Short summary — does webull trade penny stocks? Yes, Webull permits trading in many low‑priced U.S. exchange listed stocks and a selection of OTC securities (reported 500+), but it applies specific account disclosures, order limits, minimum‑quantity rules and data/fee considerations. This article explains what counts as a "penny stock" and OTC security, what Webull supports, the platform’s trading rules and restrictions, data and fee details, the risks involved, and clear step‑by‑step instructions for attempting a trade.

As of Jan 23, 2026, according to Webull Help Center and publicly available OTC Markets materials, Webull continues to allow trading of many low‑priced and OTC listings while enforcing conservative controls to manage risk and regulatory requirements.

Definition and context

What do people mean by penny stocks? The SEC and common brokerage practice often use "penny stock" to describe low‑priced equities that carry higher risk due to low market capitalization, thin liquidity, and limited public disclosure. Regulatory definitions vary, but in everyday use "penny stocks" commonly refer to shares trading under $5 per share, with many retail conversations focused on names under $1.

Two distinct categories matter when discussing penny stocks:

• Exchange‑listed low‑priced stocks: These are equities listed on U.S. exchanges (Nasdaq, NYSE, NYSE American, though note some names may move between venues). They may trade for under $5 or even under $1 but must meet exchange listing rules and public disclosure standards.
• Over‑the‑Counter (OTC) securities: These trade outside the regulated national exchanges and are quoted on OTC venues. OTC securities include multiple tiers (see below) and often have weaker disclosure requirements — especially on the lowest tier.

OTC market tiers and why they matter for penny‑stock discussions:

• OTCQX: The top OTC tier with companies that meet higher requirements for financial reporting and disclosure.
• OTCQB: The middle tier, often for earlier‑stage companies that meet certain reporting standards.
• OTC Pink (Pink Sheets): The most open tier — companies here can range from legitimate microcaps to shell companies or names with limited or no current information. OTC Pink is where many stocks described as "penny stocks" appear.

OTC status is highly relevant because many of the common penny‑stock risks — limited disclosure, low liquidity, and higher potential for price manipulation — are concentrated among OTC Pink names.

Webull’s support for penny stocks and OTC securities

Does Webull trade penny stocks? Short answer: yes, with qualifications. Webull supports trading of a universe that includes many low‑priced, exchange‑listed stocks and reports supporting hundreds of OTC securities (500+ reported by users and help summaries). The platform offers $0 commission on both exchange and OTC trades, but it also applies limitations and special rules for OTC/penny trading to manage risk and meet regulatory and internal risk controls.

Key points about Webull’s offering:

• Exchange‑listed low‑priced stocks: Webull allows trading in many U.S. exchange‑listed names even if their share price is low (subject to marginability and other standard rules).
• OTC securities: Webull provides access to hundreds of OTC‑listed equities across OTCQX, OTCQB and OTC Pink tiers. Availability varies and the firm restricts some names for safety/liquidity reasons.
• Commission policy: Webull lists $0 commission for stock and ETF trades, including OTC. That said, regulatory, clearing, and special transaction fees can apply (see Fees section).

As of Jan 23, 2026, according to Webull’s public FAQs, the platform emphasizes zero commissions while calling out special restrictions and required disclosures for OTC trading.

Rules, order types and trading restrictions on Webull

Webull enforces several common rules specific to OTC and penny trading. These limits are intended to protect customers and the platform from the higher operational and market risks associated with low‑priced and OTC securities.

Typical platform rules for OTC/penny trades on Webull:

• Order types: OTC securities generally accept limit day orders only. Market orders and multi‑day orders are typically blocked for OTC names.
• Margin: OTC securities are non‑marginable by default. That means you cannot use margin to buy most OTC stocks.
• Short selling: Short sales of OTC securities are generally not supported on Webull.
• Extended hours: OTC securities are usually tradeable only during regular market hours; pre‑market and after‑hours trading are often unavailable.
• Fractional shares: Fractional‑share trading is not available for OTC securities on Webull.

Webull minimum purchase quantity policy by last price (representative rules provided by Webull’s published materials and help pages):

• Last price < $0.01 — position cannot be opened.
• Last price $0.01–$0.099 — minimum 1,000 shares to open a position.
• Last price $0.10–$0.999 — minimum 100 shares to open a position.
• Last price ≥ $0.999 — minimum 1 share to open a position.

Webull also notes that it "generally does not support opening positions in penny stocks," meaning the platform can apply additional internal restrictions beyond the table above. Users may find that some low‑priced names are blocked from opening new positions even when they meet the numeric minimums. This is part of Webull’s risk control approach.

Account requirements and disclosures

To trade OTC securities on Webull you must accept specific disclosures. The brokerage requires customers to read and sign an OTC trading disclosure acknowledging the risks and characteristics of OTC markets. When you attempt to place an OTC trade without having signed the disclosure, Webull will present a reminder and require completion before executing the trade.

Important practical notes:

• Platform differences: Some users report that signing the OTC disclosure or completing certain OTC‑related settings may only be available in Webull’s mobile app or desktop application, not on the web portal. If you cannot sign or access OTC trading features on the web version, try the app or desktop client.
• Eligibility: Account age, verification status, and prior trading experience may affect permission to trade certain OTC/penny names. Webull may require you to have a fully verified brokerage account and, in some cases, a minimum account history before enabling OTC trading.

Market data and subscription options

Getting reliable quotes for OTC securities can be harder than for exchange‑listed stocks. Webull provides access to OTC market data but differentiates between basic quotes and premium data feeds.

• Level and feed availability: Webull can offer OTC Markets Level 1 feeds covering OTCQX, OTCQB and OTC Pink tiers. Level 1 supplies best bid/ask and last sale information for a quoted security.
• Subscription requirement: Real‑time, tick‑by‑tick or consolidated OTC quote feeds often require a paid subscription. Webull may offer delayed quotes by default and a monthly subscription to access OTC real‑time quotes and advanced tick data.
• Practical impact: If you rely on very recent price detail (important in thinly traded OTC names), consider subscribing to real‑time data. Without it, you may see delayed quotes or incomplete quote depth.

As of Jan 23, 2026, Webull’s help documentation states that real‑time market data for certain OTC tiers is available via subscription, and users should confirm current pricing and feed coverage inside the app.

Fees and special charges related to low‑priced / OTC trading

Webull promotes $0 commissions for stock and ETF trades, including OTC securities. However, "commission‑free" does not mean zero cost in all cases. There are regulatory, clearing, exchange and exceptional charges that may apply to trades in low‑priced or OTC securities.

Common fee categories that may affect OTC/penny trades:

• Regulatory pass‑throughs: FINRA, SEC and other regulatory pass‑through fees (such as the Trading Activity Fee) may be assessed and passed through to customers at the rates set by regulators.
• Clearing and settlement fees: Fees from the clearing firm or routing partner may be passed through for specific trade characteristics.
• Low‑priced securities surcharge: Webull discloses potential special fees for very large transactions in low‑priced securities — for example, trades that involve more than 100,000 shares of a security priced under $1 may be subject to a per‑share surcharge or capped percentage. The exact trigger points and per‑share amounts can change; consult Webull’s current pricing schedule.
• NSCC illiquidity or special settlement fees: Some thinly traded names can generate additional settlement or illiquidity charges assessed by clearing/settlement utilities.
• Foreign‑settlement or F‑stock fees (if applicable): For certain cross‑border instruments or foreign settlement processes, additional charges can apply.

Practical advice: always review the trade confirmation and account statements for any itemized fees. While most small retail OTC trades will incur only standard regulatory pass‑throughs, very large or unusual trades in penny securities can trigger additional fees.

Availability, delistings and temporary trading suspensions

A share can become unavailable to trade on Webull for several reasons:

• Corporate actions: Mergers, acquisitions, special dividends or reorganizations can suspend trading or change symbols.
• Exchange delisting or venue change: When a company is delisted from a national exchange, it can move to the OTC market. That change can temporarily limit new orders while the broker updates listings.
• Regulatory halts: SEC or exchange‑level trading halts related to pending news or investigations can stop trading.
• Internal risk blocks: Webull may restrict or block opening new positions in certain penny or OTC names if liquidity dries up, spreads widen excessively, or the firm’s risk monitors flag manipulation risk.

How Webull handles restricted or delisted names:

• Blocking new buys: The platform will typically allow existing holders to close (sell) positions even when new buys are blocked, though some liquidation restrictions can apply in extreme stress situations.
• User notifications: Webull shows messages and notices on the security profile and trade ticket explaining why an instrument is restricted. If you cannot close or open a position, contact Webull support for guidance on forced actions and settlement.

How to find and screen penny/OTC stocks on Webull

Webull offers tools to locate low‑priced and OTC securities. Use the platform’s built‑in screener, watchlists and OTC listings to surface names that meet your criteria.

Practical steps inside Webull:

• Use the screener: Apply a price filter (e.g., under $5 or under $1) and set exchange/venue filters where available. Some versions of the screener let you filter by OTC tier (OTCQX/OTCQB/Pink).
• Watchlists: Create a watchlist of low‑priced or OTC names you’re tracking. Watchlists can highlight price movements and volume spikes.
• Security profile pages: Each symbol’s profile shows exchange/OTC tier, last trade price, volume, and any platform notices about trading restrictions or required disclosures.

Limitations to be aware of:

• Mobile vs web differences: Some listing filters or OTC tier views may appear only in the mobile app or desktop client. If you don’t see an OTC tier filter on the web portal, check the app.
• Completeness: Not every OTC security in the universe will be available for trading on Webull. Availability changes over time.

Risks and regulatory considerations

Penny and OTC stocks carry elevated risk. Key risk factors to consider and understand before interacting with these markets:

• Illiquidity: Thin order books mean entering and exiting positions can be difficult, and bid/ask spreads can be wide.
• Volatility: Prices can move dramatically on small volume. Sudden gaps and rapid percentage moves are common.
• Limited disclosure: OTC Pink and some OTCQB names may have minimal or outdated financial disclosures, making valuation and due diligence more difficult.
• Manipulation risk: Low market capitalization and thin liquidity can make some names susceptible to pump‑and‑dump schemes and other manipulative activity.
• Settlement risk and cancellations: Trades in illiquid names can be subject to longer settlement complications or occasionally to trade cancellations if quoted liquidity was not genuine.

Regulatory context:

• The SEC issues investor alerts and rule guidance on penny stocks and requires broker‑dealer disclosures in specific situations. Brokerages like Webull adopt conservative controls to comply with regulations and to protect customers.
• Broker restrictions often stem from both external rules and internal risk management. That’s why some names are blocked for opening new positions even if they technically remain tradable.

All information here is factual and educational — not investment advice. Due diligence and an understanding of these risks are essential before trading penny or OTC stocks.

Practical steps to trade (or attempt to trade) a penny/OTC stock on Webull

Step‑by‑step checklist for a typical OTC or low‑priced trade on Webull:

1. Locate the symbol: Search the ticker in Webull’s quote box and confirm whether the security is exchange‑listed or OTC and which OTC tier it resides in.
2. Verify availability: Check the security’s profile for any Webull notices about tradeability, restrictions, or delisting status.
3. Sign the OTC disclosure: If the security is OTC and you haven’t signed the OTC trading disclosure, complete that step in the mobile or desktop app when prompted.
4. Confirm market data: If you need real‑time OTC quotes, ensure you have the required data subscription. Without it, you may see delayed or partial quotes.
5. Check minimums: Review the minimum purchase quantity rules by last price (see the minimum purchase quantity table earlier).
6. Choose order type: Use a limit day order (OTC rules typically restrict you to limit day orders). Avoid market orders on thinly traded names.
7. Enter order during regular hours: Place the order during regular U.S. market hours unless the security explicitly supports extended hours (most OTC names do not).
8. Monitor execution: Be prepared for partial fills, wide spreads, or no fills. Adjust limit price conservatively and expect volatility.
9. Review confirmations: After the trade executes, check confirmations for any regulatory or special charges.

If you receive an error when attempting to open a new position, the error message often explains whether the block is due to minimum price limits, lack of disclosure, insufficient data subscription, or a platform risk block.

Comparison with other brokers (brief)

Some brokerages provide OTC and penny access with different scopes and rule sets. Key differences to compare when assessing brokers include the OTC universe size, order type rules, fractional share availability, margin/shorting policies, data fees, and any special low‑price surcharges.

A few comparative notes:

• Universe and listings: Broker A may list a larger OTC universe than Broker B; Webull sits among brokers that permit many OTC trades but still blocks specific high‑risk symbols.
• Order rules: Limit‑only order requirements for OTC are common, but some brokers may allow different handling or routing options.
• Fractional shares: Many brokers that offer fractional shares exclude OTC securities from fractional programs — Webull follows this common approach.
• Data costs: Brokers differ in whether they bundle OTC real‑time data or charge a separate subscription. Compare monthly data fees if you trade OTC actively.

If access to specific OTC tiers, fractional trading or margin for low‑priced stocks matters to you, compare broker policies carefully.

Frequently asked questions

Q: Can I short penny/OTC stocks on Webull?

A: Short selling of OTC securities is generally not supported on Webull. For exchange‑listed low‑priced stocks, margin and short availability depend on the security’s marginability and borrow availability.

Q: Are fractional shares allowed for OTC stocks on Webull?

A: No. Fractional shares are not available for OTC securities on Webull.

Q: Are OTC trades commission‑free on Webull?

A: Webull advertises $0 commissions for stock trades, including OTC securities, but regulatory pass‑throughs, clearing fees, and special low‑price surcharges may still apply.

Q: Why can’t I open a new position in a low‑priced stock?

A: Common reasons include: the security’s last price falls below the platform’s minimum threshold (< $0.01), you haven’t signed the OTC disclosure, the symbol is blocked due to liquidity or manipulation risk, or you don’t meet account eligibility requirements.

Q: Where can I sign the OTC disclosure?

A: Webull prompts you to sign the OTC disclosure when attempting an OTC trade. If you do not see the prompt on the web version, try the mobile app or desktop client.

References and primary sources

As of Jan 23, 2026, this article was compiled using the following primary sources and reference types:

• Webull Help Center pages (OTC trading FAQ, security trade restrictions, pricing/fee schedule, account disclosures) — used to confirm trade rules, minimum purchase quantities and disclosure requirements.
• OTC Markets public materials describing OTCQX/OTCQB/OTC Pink tier distinctions.
• SEC investor alerts and general guidance on penny stocks and broker‑dealer obligations.

Users should verify current Webull Help Center pages and pricing materials for the most recent rules and fees, as broker policies change periodically.

Notes for editors

• Webull updates product availability, fees and trading limits periodically. Verify Webull’s Help and Pricing pages for current numbers before publishing.
• The minimum purchase table and rules in this article reflect Webull’s publicly stated guidance as of Jan 23, 2026 but may be updated by the broker.

Appendix — Representative excerpts of Webull rules (paraphrased)

• Minimum purchase by last price: cannot open position if last price < $0.01; $0.01–$0.099 → min 1,000 shares; $0.10–$0.999 → min 100 shares; ≥ $0.999 → min 1 share.
• OTC order types: limit day orders only; no market orders for OTC names.
• Margin and short sales: OTC securities are non‑marginable and are generally not eligible for short sale.

(These excerpts summarize Webull policy language — see Webull Help Center for verbatim text and updates.)

Further exploration and next steps

If you want to trade penny or OTC names, use this guide as a checklist: confirm symbol status, sign any required disclosures, check minimums and data subscriptions, and use limit day orders during market hours. For broader digital asset and exchange services, consider exploring Bitget’s suite of trading tools and Bitget Wallet for web3 integration and secure custody.

Explore trading tools, validate market‑data needs, and always review the security profile and trade confirmations before placing an OTC or low‑priced trade.