Webull Options Trading Limit Incident: Tesla Trader Claims $170k Loss

This analysis is based on a Reddit user report [Event Source] published on November 11, 2025, alleging that Webull Financial LLC blocked the closing of a 1750-contract Tesla (TSLA) options position due to an undisclosed 1500-contract sell limit. The user claims this action converted a $25,000 profit into a $45,000 loss, followed by an additional $100,000 loss from revenge trading. The incident highlights significant concerns about retail trading platform transparency and risk management practices.

Tesla stock was trading at $439.62 on November 11, 2025, with minimal movement (up 0.05%) [0]. However, the following day saw TSLA decline to $431.99 (-2.29%) on high volume of 35.5 million shares [0]. While this timing coincides with the reported incident, the broader market factors likely drove Tesla’s decline rather than the individual trading dispute, as single retail trading incidents rarely impact stock prices at this scale.

The user’s reported position size of 1750 contracts represents substantial exposure - approximately $75.6 million in notional value (1750 × 100 × $432) [0]. This institutional-sized position raises questions about appropriate risk management for retail traders and platform controls.

This incident occurs against Webull’s documented regulatory compliance issues. In March 2023, FINRA fined Webull $3 million for approving unqualified options traders between December 2019 and July 2021 [1]. The regulator found Webull’s automated system failed to properly screen applications, resulting in over 9,000 unqualified traders being approved for options trading, including more than 2,500 customers under 21 lacking required experience [1].

According to Webull’s Options Agreement, traders must abide by Options Clearing Corporation (OCC) rules governing position and exercise limits [2]. However, the agreement states that limits are established by exchanges and the OCC, not individual brokers, suggesting the reported 1500-contract limit may be an internal risk management parameter rather than regulatory requirement.

Webull charges $0.10 per contract for option orders above 500 contracts [3]. For the reported 1750-contract position, this would result in $175 in fees alone. The platform’s fee structure and order processing systems are designed to handle large institutional-sized orders, indicating the reported limit likely serves internal risk management purposes.

The incident reveals potential gaps in multiple risk management dimensions:

• Position Size Controls
  : Allowing retail traders to accumulate 1750-contract positions without appropriate warnings
• Disclosure Transparency
  : Potential failure to communicate trading limits effectively
• Real-Time Risk Monitoring
  : Systems that may block position liquidation during market stress

Webull’s prior FINRA enforcement [1] suggests a pattern of compliance issues in options trading oversight. This new allegation, if substantiated, could indicate systemic problems in Webull’s risk management framework rather than isolated incidents.

The case highlights broader concerns about retail access to institutional-level trading capabilities without corresponding risk controls and disclosure practices. The $75.6 million notional exposure represents significant concentration risk for both the trader and the platform.

• Potential communication gaps regarding platform limitations and trading restrictions
• Risk of position liquidation blocks during critical market movements
• Exposure to undisclosed risk management parameters that may affect trading strategies

• Given Webull’s prior FINRA enforcement [1], this incident could trigger increased regulatory scrutiny
• Potential for additional fines or sanctions if violations are confirmed
• Industry-wide review of retail options trading risk management practices

Decision-makers should track:

1. FINRA’s response to the complaint and any subsequent enforcement actions
2. Webull’s official communications regarding options trading limitations
3. Similar reports from other Webull users or competing platforms
4. Regulatory guidance on retail options trading risk management
5. Changes to Webull’s options trading approval and disclosure processes

The reported incident involves a substantial retail options position (1750 contracts) that allegedly could not be closed due to platform-imposed limits, resulting in significant financial losses. While many details remain unverified, the allegation raises serious questions about retail trading platform transparency and risk management practices.

The incident occurs within a broader context of Webull’s regulatory compliance challenges, particularly regarding options trading oversight [1]. Retail traders using Webull or similar platforms should carefully review account agreements, understand position limits, and maintain appropriate position sizing relative to account equity and experience level.

Users experiencing similar issues should document all communications, review account agreements thoroughly, and consider filing formal complaints with FINRA if they believe broker-dealer rules have been violated.