What is a GFV (Good Faith Violation)?

GFV stands for Good Faith Violation. It occurs in investment accounts when an asset is purchased with money from a previous sale that has not yet settled, and then that asset is sold before the funds used in the purchase have settled.

Simple example:

1. You sell shares of Company A on Monday.
2. Use this amount to buy shares of Company B on the same day.
3. Still on Monday, you sell the shares of Company B.

Since the money from the sale of Company A will only be officially available the next business day (T+1), you traded with funds that had not yet settled. This constitutes a good faith violation.

Why does this happen?

Investment accounts can only use money that has already settled. If you buy and sell assets using amounts that have not yet settled, this violates the good faith rule applicable to investment accounts.

What happens if I receive a GFV?

If you accumulate multiple GFVs within a 12-month period, your account may be subject to the following restrictions:

• After 3 GFVs: the account can only be traded with already settled funds.
• After 4 GFVs: 90-day restriction.
• After 5 GFVs: the account may be closed.

How to avoid GFVs?

• Wait for funds to be fully settled before using them in new trades.
• Consider using a margin account, which offers greater flexibility.
• Track the liquidation schedule directly in the Webull app.

Do margin accounts also receive GFVs?

No. Margin accounts are not subject to GFVs, as they allow the use of broker credit and do not rely exclusively on already settled amounts.