After-Hours Trading and Good Faith Violations
- Main Problem: The user is confused about whether extended hours trading is available for minor accounts and is unclear about receiving a warning regarding a Good Faith Violation when placing trades.
- Solution for Extended Hours Trading: Fidelity confirmed that extended hours trading is not available for Fidelity Youth accounts.
- Explanation of Good Faith Violation: The warning appears if shares are bought with unsettled funds and sold before they are paid for. A Good Faith Violation occurs when there’s no effort to ensure cash is available before the settlement date.
- Additional Resource: Fidelity provided links for further clarification on Youth accounts and how to avoid cash trading violations.
Here’s the full thread
Is there a way to invest on the after market like after the market closes or does it only have to be during market hours?
Thanks for reaching out to us!
Extended Hours trading is available on the Fidelity Mobile app, Fidelity.com, and Active Trader Pro (ATP), and is automatically granted as part of the account opening agreement at Fidelity.
To place an extended hours trade on ATP, you must first click on “Trade and Orders,” and then select “Directed Trade & Extended Hours.”
Extended Hours trading is available on the Fidelity Mobile app, Fidelity.com, and ATP from Monday to Friday, 7:00 a.m. to 9:28 a.m. ET (premarket) and 4:00 p.m. to 8:00 p.m. ET (after-hours).
Let us know if you have any additional questions. 🟢
What if it is a minor account? Is there extended hour trading ?
And also what does this mean?
“The buy order you are about to place exceeds your settled cash balance. Selling these shares before paying in full for the trade could result in a Good Faith Violation. Read Avoiding Cash Account Trading Violations for further clarification.”
I have enough money available to invest so i don’t understand why it says that
Thanks for the follow-up, @El Mencho. I’m happy to chime in here.
At this time, Fidelity Youth accounts are unable to trade during extended-hours market sessions. Feel free to check out the link below for other frequently asked questions regarding Fidelity Youth accounts.
Fidelity Youth FAQs: www.fidelity.com/go/youth-account/faqs
As for the warning message, this appears within the trade ticket regarding a possible Good Faith Violation (GFV) if any portion of your cash is unsettled from trades or uncollected from deposits. Keep in mind that even though you may receive this warning, you are generally still able to place the trade. With that said, it is your responsibility to make sure you are aware of the implications a trade may have on your account. I’ll include a link below so you can learn more about GFVs and how to avoid them.
Avoiding cash trading violations: www.fidelity.com/learning-center/trading-investing/trading/avoiding-cash-trading-violations
We’re here for you if you need anything else! 🟢
Thank you! I still dont get the good faith violation though im confused could you elaborate more? How am i able to pay it back
Hey @El Mencho, a GFV doesn’t generate anything to “pay back,” exactly. When you buy a security with unsettled funds, the shares aren’t fully paid for yet. Liquidating a position before it was ever paid for with settled funds is considered a “good faith violation” because no good faith effort was made to deposit additional cash into the account prior to the settlement date.
Like @FidelityEmily said, when you receive that warning on your buy order, you’ll still be able to place your trade. The idea is to be aware of settlement if you intend to sell those shares.