What is a Good Faith Violation?
If a security purchased in a cash account is sold prior to being paid for with settled funds in the account, a good faith violation has occurred. For more information click here.
What happens to GFV accounts and trades?
Accounts with three good faith violations in a 12-month period will be restricted to purchasing securities with only settled cash for a period of 90 days. Further, any trades executed that exceed either 3 violations or $1,000 may be cancelled.