What is GFV (Good Faith Violation)?

A good faith violation occurs when you sell a security purchased with unsettled funds, and then use those funds to purchase another security before the initial purchase has settled.

What does this look like:

You buy a stock using funds that have not yet settled from a previous sale.

Before the initial purchase settles, you sell the stock you just bought.

You use the proceeds from this sale to buy another security.

This sequence violates the regulation because it appears as if you're using unsettled funds to make another purchase, which is considered improper use of funds.

To avoid good faith violations, you should ensure that you have sufficient settled funds in your account to cover your purchases, or wait for the initial purchase to settle before using those funds again. We will provide you with a prompt should you be potentially violating the good faith terms to prevent this from happening accidentally, should this behaviour occur Webull SA reserves the right to suspend your account until further notice.