In your first example, as long as the 40,000 share

In your first example, as long as the 40,000 shares owned (or the 20,000 sold) are already settled following their purchase, you could sell the 20,000 on Monday and repurchase shares on Tuesday without any problem. However, the repurchased shares won't settle until Friday. If you sell them on Thursday, you violate the Free Ride rule and your brokerage firm could restrict your future trades. Generally the first time an investor violates the rule, they get a warning. If the practice continues, restrictions are placed on your account. This is assuming you have a cash account. If you have a margin account, the settlement restrictions are removed and you would simply be charged margin interest on any unsettled balances. That's my understanding as per TDA's explanation regarding margin accounts.

Your brokerage account is set up with a default trade setting, typically FIFO unless you change it or request a specific lot of shares to sell. In your second example, the FIFO rule would dictate the 20,000 shares sold on Wednesday would come from the lot of shares already settled, not the newly purchased shares from Tuesday. If you've requested another trade rule, this may be different.

If you have enough settled cash in your account to cover these transactions, these settlement rules will be irrelevant for these transactions.