Good Faith Violation ("GFV")
Investrade Discount Securitiesthrough its clearing agent First Southwest Company is required to implement policies concerning trading with unsettled funds. Your account can be charged with a Good Faith Violation (GFV) if you sell a security that was purchased with unsettled funds and then sold prior to the settlement of the first sell (see example below). Three (3) GFV's in any twelve (12) month rolling period will result in your account being restricted to liquidating transactions only for 90 days.
- On Monday customer sells “A” for $5,000, of a long, settled and fully paid for position.
- On Monday customer buys “B” for $5,000.
- On Monday, Tuesday or Wednesday customer sells “B”, the sale would result in a good faith violation.
For questions contact Investrade at 1-800-498-7120.