Hey there, fellow Webull trader! Ever been in a situation where you're trying to make a quick trade, only to be hit with a "Good Faith Violation" or GFV? It can be super frustrating, especially when you're not sure what it means or how many you've racked up. Don't worry, you're not alone! Understanding GFVs is crucial for smooth trading, especially in cash accounts.
This lengthy guide will walk you through everything you need to know about GFVs on Webull, including how to check them (or rather, how to monitor your account to avoid them, as Webull doesn't have a specific "GFV counter" feature readily visible), what they mean, and how to steer clear of them. Let's dive in!
Understanding Good Faith Violations (GFVs) on Webull
Before we get into checking your GFV count, it's essential to grasp what a GFV actually is.
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| How To See How Many Gfv I Have On Webull |
What Exactly is a GFV?
A Good Faith Violation (GFV) occurs in a cash account when you sell a security that was purchased with unsettled funds, and you sell it before those funds have fully settled. Think of it like this: you buy something with a check that hasn't cleared yet, and then you try to use the "money" from selling that item to buy something else, all before the initial check has actually hit your bank.
Key takeaway: GFVs are typically associated with cash accounts. Margin accounts generally operate differently and are less prone to GFVs because they allow you to borrow against your existing securities.
Why Do GFVs Happen? The Concept of Trade Settlement
The root of GFVs lies in trade settlement. When you buy or sell a stock, the transaction isn't instantaneous. There's a settlement period where the actual exchange of cash and securities takes place.
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Stocks and ETFs: For most stocks and Exchange Traded Funds (ETFs), the settlement period is usually T+1, meaning Trade Date plus one business day. So, if you buy a stock on Monday, the funds officially settle on Tuesday.
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Options: Options typically settle on T+1 as well.
The problem arises when you use funds that are unsettled to make a purchase, and then you sell that newly purchased security before the initial funds have settled.
Consequences of Good Faith Violations
Webull, like all brokerage firms, must adhere to FINRA (Financial Industry Regulatory Authority) rules regarding GFVs. These rules are in place to prevent "free-riding," where investors attempt to profit from trades without putting up their own settled cash.
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First Few Violations (1-3): Generally, the first few GFVs in a rolling 12-month period might come with a warning.
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Fourth Violation: Upon receiving a fourth GFV in a rolling 12-month period, your cash account will likely be restricted to buying with settled funds only. This means you can only place buy orders if you have sufficient settled cash in your account before placing the trade. This restriction typically lasts for 12 months from the date of the earliest GFV within that period.
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Fifth Violation: If you incur a fifth GFV within that rolling 12-month period, your account will be restricted to "sell only" for 90 calendar days. This is a significant limitation, as you won't be able to buy any new securities during this period.
It's important to note that these are general guidelines, and Webull's specific policy might have slight variations, but the core principles remain the same due to regulatory requirements.
QuickTip: Scan for summary-style sentences.
Step-by-Step Guide: How to Monitor Your Webull Account to Prevent and Track GFVs
Webull doesn't have a single, prominent counter that explicitly displays "You have X GFVs." Instead, the key to "seeing how many GFVs you have" lies in understanding the settlement process and actively monitoring your account activity and any notifications from Webull.
Step 1: Engage and Understand Your Account Type!
Before we go any further, do you know if you have a cash account or a margin account on Webull? This is the most crucial first step, as GFVs almost exclusively apply to cash accounts. If you have a margin account, you generally don't need to worry about GFVs in the same way, as margin allows you to trade with borrowed funds.
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To check your account type:
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Open the Webull App: Launch the Webull application on your mobile device.
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Go to the "Menu" or "Account" Tab: This is usually found at the bottom of the screen. Look for an icon that looks like a person, a menu, or simply says "Account."
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Navigate to "Account Details" or "Profile": Within the Account section, you should find a link or tab related to your account details or profile information.
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Look for "Account Type": Here, you should clearly see if your account is designated as "Cash" or "Margin."
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If you have a cash account, continue with the following steps. If you have a margin account, while GFVs are less common, understanding settlement is still good practice for general financial awareness.
Step 2: Pay Close Attention to "Available Funds" and "Settled Cash"
This is where the rubber meets the road. Webull provides different metrics for your funds, and understanding them is vital to avoiding GFVs.
Sub-heading: Understanding Your Webull Balances
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Access Your Account Summary:
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From the main Webull app interface, tap the "Webull" icon (usually in the center at the bottom of the screen, indicating your main account page).
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You'll see a summary of your account's total assets, buying power, and various cash balances.
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Distinguish Between "Available Funds" and "Settled Cash":
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Available Funds (or Buying Power): This number represents the total amount you can use to place trades. It often includes proceeds from recent sales that have not yet settled. This is where GFV risks lie.
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Settled Cash: This is the critical number for GFV avoidance. Settled cash refers to funds that have fully cleared and are officially in your account. This includes cash deposits that have settled and proceeds from stock sales that have completed their T+1 (or T+0 for options) settlement period.
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Sub-heading: The Golden Rule for Cash Accounts
Always aim to trade using your Settled Cash amount. If you buy a stock using funds from a recent sale that haven't settled yet (i.e., using "Available Funds" that are greater than "Settled Cash"), and then sell that new stock before the initial sale settles, you've got yourself a GFV.
Step 3: Monitor Your Trade Confirmations and Statements
While Webull doesn't have a dedicated GFV counter, they do send notifications and record all your transactions.
Tip: The middle often holds the main point.
Sub-heading: Checking Trade Confirmations
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Access Your Statements:
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From the Webull app, tap the "Webull" icon (your main account page).
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Look for a section or tab usually labeled "Statements" or "History."
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Here you can access your trade confirmations. Each trade confirmation will show the settlement date for that specific transaction.
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Review for Unsettled Trades:
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After you've made a sale, check the trade confirmation for that sale. Note the settlement date.
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If you then use those funds to buy a new security, make sure you do not sell that new security before the original sale's settlement date.
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Sub-heading: Looking at Monthly Statements
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Webull provides monthly account statements. While these might not flag individual GFVs explicitly, they will show your cash balances, settled funds, and all trade activities. If you suspect you've incurred a GFV, reviewing your statement in conjunction with your trade history can help you pinpoint it.
Step 4: Pay Attention to Webull's Notifications and Warnings
Webull will notify you if you've incurred a GFV. These notifications are your direct indicator.
Sub-heading: In-App Notifications
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Keep an eye on your "Messages" or "Notifications" section within the Webull app. Webull typically sends alerts for important account activity, including good faith violations.
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These notifications will usually explain the violation and the potential consequences. Do not ignore these! They are your best direct source for knowing you've committed a GFV.
Sub-heading: Email Notifications
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Check the email address associated with your Webull account. Webull often sends email notifications regarding GFVs and account restrictions. Ensure Webull emails aren't going to your spam folder.
Step 5: Understanding and Using the "Settlement Calendar" (Implicitly)
While Webull might not have a direct "settlement calendar" feature, you can effectively create one in your mind or a quick note.
Sub-heading: Tracking Your Own Settlement
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For Sales: If you sell a stock on a Monday, remember the proceeds will settle on Tuesday (T+1).
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For Purchases: If you buy a stock using proceeds from a sale on Monday, you cannot sell that new stock before Tuesday's close without incurring a GFV.
The simplest way to avoid GFVs is to only trade with fully settled funds. If you're unsure, it's always safer to wait an extra business day for funds to settle before initiating a new trade, especially if you plan to sell that new position quickly.
Tip: Look for examples to make points easier to grasp.
Preventing Good Faith Violations: Best Practices
Prevention is always better than cure, especially when it comes to trading violations.
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Always Use Settled Cash: This is the golden rule. Only initiate new buy orders when your "Settled Cash" balance is sufficient to cover the purchase.
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Wait for Funds to Settle: If you've sold a stock, wait for the T+1 settlement period to pass before using those proceeds to buy another stock that you might want to sell quickly.
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Deposit Funds in Advance: If you know you want to trade, make sure you have sufficient settled funds in your account. Deposits can also take time to settle, so plan ahead.
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Consider a Margin Account (with caution): While margin accounts come with their own set of risks (like borrowing costs and potential margin calls), they generally alleviate GFV concerns as you can trade with borrowed funds. However, only consider a margin account if you fully understand margin trading and its associated risks.
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Understand the T+1 Rule: Internalize that most stock and ETF trades settle on T+1. This knowledge is your best defense against accidental GFVs.
By diligently following these steps and understanding the underlying principles of trade settlement, you'll be well-equipped to manage your Webull account, avoid Good Faith Violations, and keep your trading experience smooth and unrestricted. Remember, patience and awareness are your best allies in navigating the complexities of cash account trading!
10 Related FAQ Questions
How to check if my Webull account is a cash or margin account?
You can check your account type by navigating to the "Account" or "Menu" tab in the Webull app, then looking for "Account Details" or "Profile." Your account type (Cash or Margin) will be clearly displayed there.
How to see my settled cash balance on Webull?
On the Webull app, tap the central "Webull" icon to go to your main account page. Your "Settled Cash" balance will be prominently displayed alongside your other cash balances and buying power.
How to know if funds from a recent sale have settled on Webull?
Funds from stock/ETF sales typically settle on T+1 (Trade Date plus one business day). You can check your trade confirmations within the "Statements" or "History" section of the app, which will indicate the settlement date for each transaction.
How to avoid a Good Faith Violation on Webull?
QuickTip: Reading carefully once is better than rushing twice.
The most effective way is to always ensure you have sufficient settled cash in your account before placing a buy order. Avoid using proceeds from a sale to buy another security if those proceeds haven't yet settled, especially if you plan to sell the newly purchased security quickly.
How to prevent a 90-day trading restriction on Webull?
To prevent a 90-day "sell only" restriction, you must avoid accumulating five Good Faith Violations within a rolling 12-month period. Limiting your GFVs to three or less in any 12-month timeframe is crucial.
How to tell if I've received a GFV notification from Webull?
Webull will send notifications directly to your in-app "Messages" or "Notifications" section, and often via email to the address linked to your account, informing you of any Good Faith Violations.
How to get my Webull account unrestricted after a GFV?
For accounts restricted to "settled funds only" due to a fourth GFV, the restriction generally lasts for 12 months from the date of the earliest GFV in that period. If your account is restricted to "sell only" due to a fifth GFV, this restriction typically lasts for a mandatory 90 calendar days. There is no manual way to bypass these regulatory restrictions before their designated period ends.
How to deposit funds to settle a trade on Webull?
You can deposit funds into your Webull account through various methods like ACH transfers (electronic bank transfers), wire transfers, or linking a debit card. Be aware that these deposits also have settlement times, so plan accordingly.
How to understand the difference between "Available Funds" and "Settled Cash" on Webull?
"Available Funds" or "Buying Power" includes all funds accessible for trading, which may include unsettled proceeds from recent sales. "Settled Cash," on the other hand, only includes funds that have fully cleared and are ready for immediate use without risk of a GFV. Always prioritize "Settled Cash" for new purchases.
How to learn more about FINRA rules on Good Faith Violations?
You can find detailed information on Good Faith Violations and other trading regulations on the FINRA (Financial Industry Regulatory Authority) website. Your brokerage firm (Webull) also has educational resources and FAQs on their support pages explaining these rules.
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