This brief statement
does not disclose all of the risks and other significant aspects of
trading in financial markets. In light of the risks, you should
undertake such transactions only if you (Trader or Client) fully
understand the nature of the contracts (and contractual relationships)
into which you are entering and the extent of your exposure to risk.
Trading is not suitable for many members of the public. You should
carefully consider whether trading is appropriate for you in light of
your experience, objectives, financial resources and other relevant
General Investment Risk: All
investments come with the risk of losing money. Investing involves
substantial risks, including complete possible loss of principal plus
other losses and may not be suitable for many members of the public.
Investments, unlike savings and checking accounts at a bank, are not
insured by the government to protect against market losses. Different
market instruments carry different types and degrees of risk and you
should familiarize yourself with the risks involved in the particular
market instruments you intend to invest in.
1.2. Electronic Trading: Trading
on an electronic trading system may differ not only from trading in an
open-outcry market but also from trading on other electronic trading
systems. If you undertake transactions on an electronic trading system,
you will be exposed to risks associated with the system including the
failure of hardware and software. The result of any system failure may
be that your order is either not executed according to your
instructions or is not executed at all.
1.3. Suspension or Restriction of Trading and Pricing
Relationships: Market conditions
(e.g. liquidity) and / or the operation of the rules of certain markets
and market makers (e.g. market hours, dealing hours, suspension of
trading, etc.) may increase the risk of loss by making it difficult or
impossible to effect transactions or liquidate / offset positions.
1.4. Off-Exchange Transactions: Company
that you are effecting off-exchange transactions with may often act as
your counterparty. It may be difficult or impossible to liquidate an
existing position, to assess the value, to determine a fair price or to
assess the exposure to risk. For these reasons, these transactions may
involve increased risks. Off-exchange transactions are generally less
regulated and / or subject to a separate regulatory regime. Before you
undertake such transactions, you should familiarize yourself with
applicable rules and attendant risks.
1.5. Transactions in Foreign Jurisdictions: Transactions
on markets in foreign jurisdictions, including markets formally linked
to a domestic market, may expose you to additional risk. Such markets
may be subject to regulation, which may offer different or diminished
investor protection. Your local regulatory authority will be unable to
compel the enforcement of the rules of regulatory authorities or
markets in other jurisdictions where your transactions have been
effected. You should obtain details about the types of redress
available and rules applicable in both your home jurisdiction and other
relevant jurisdictions before you start to trade.
1.6. Deposited Cash and Property: You
should familiarize yourself with the protections accorded money or
other property you deposit for domestic and foreign transactions,
particularly in the event of insolvency or bankruptcy. The extent to
which you may recover your money or property may be governed by
specific foreign legislation or other non-domestic rules. In some
jurisdictions, property, which has been specifically identifiable as
your own, will be pro-rated in the same manner as cash for purposes of
distribution in the event of a shortfall.
1.7. Terms and Conditions of Contracts: You
should obtain details about the terms and conditions of the specific
market instruments which you are trading and associated obligations
(e.g. the margin requirements and the terms of their change, order
execution limitations, circumstances under which you may become
obligated to make or take delivery, expiration dates and restrictions
on the time for exercise, etc.).
1.8. Commission and Other Charges: Before
you begin to trade, you should obtain a clear explanation of all
commission, fees and other charges for which you will be liable. These
charges will affect your net profit (if any) or increase your loss.
1.9. Currency Risks: The
profit or loss in transactions in foreign currency-denominated
contracts (whether they are traded in your own or another jurisdiction)
will be affected by fluctuations in currency rates where there is a
need to convert from the currency denomination of the contract to
1.10. Trading Facilities: Most
open-outcry and electronic trading facilities are supported by
computer-based component systems for the order-routing, execution,
matching, registration or clearing of trades. As with all facilities
and systems, they are vulnerable to temporary disruption or failure.
Your ability to recover certain losses may be subject to limits on
liability imposed by the system provider, the market, the clearing
house and / or member firms. Such limits may vary. Therefore, you
should obtain a clear explanation of all details in this respect.
1.11. Trading Strategies and Signals: Positive
trading signal performance in the past does not guarantee the trading
signal will be profitable in the future. There are various reasons why
your trading performance is unlikely to be the same as trading
performance results presented by a trading signal provider, including
but not limited to: varying levels of market liquidity; varying sizes
of market spreads; discontinuation of credit lines and trading lines;
the imposition of regulatory or governmental authority over buy-side
and sell-side market participants including your counterparty; human
error; dealing error; varying levels and speeds of connectivity; delays
in generating, transmitting, routing, and accepting orders; a lack of
following every single trading signal as it is generated; the effects
of other positions that you maintain that were not placed in accordance
with signals or strategies offered by the trading signal provider;
varying margin requirements; varying stop-loss, limit acceptance, and
margining-out provisions; public or market holidays; one-time or
infrequent exogenous market events; temporary inability of the trading
signal provider to generate or transmit trading signals or strategies;
lack of trading experience, etc.
Sophisticated High-Risk Trading: Because
the risk factor is high in Forex trading, only genuine risk funds
should be used in such trading. If you do not have the extra capital
you can afford to lose, you should not trade in the Forex markets.
Trading in Forex is suitable only for those sophisticated institutions
or sophisticated participants financially able to withstand losses that
may substantially exceed the value of margins or deposits.
2.2. Effect of Leverage or Gearing: Transactions
in Forex carry a high degree of risk. The amount of initial margin is
small relative to the value of the Forex contract so that transactions
are leveraged or geared. A relatively small market movement will
have a proportionately larger impact on the funds you have deposited or
will have to deposit: this may work against you as well as for you. You
may sustain a total loss of initial margin funds and any additional
funds deposited to maintain your position. If the market moves against
your position or margin levels are increased, you may be called upon to
pay substantial additional funds immediately or on a very short notice
to maintain your position. If you fail to comply with a request for
additional funds within the time prescribed, your position may be
liquidated at a loss and you will be liable for any resulting deficit.
2.3. Risk-Reducing Orders or Strategies: The
placing of certain orders (e.g. exit-stop, stop-loss, etc.) which
are intended to limit losses to certain amounts may not be effective
because market conditions may make it impossible to execute such
orders. Strategies using combinations of positions, such as hedged
and straddle positions, may be as risky as taking simple long or
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