Risk Disclosure
Official Language and Information Accuracy
The official language of the Company is English. For a comprehensive description of the Company’s activities, please refer to the English version of the website. Information translated into languages other than English is provided solely for informational purposes and holds no legal validity. The Company disclaims any responsibility for the accuracy of information provided in other languages.
Risk Disclosure for Foreign Currency and Derivatives Transactions
This brief warning supplements the “Client Agreement” and does not encompass all risks and other significant aspects associated with foreign currency and derivatives transactions. Given the inherent risks, you should refrain from engaging in such transactions unless you fully understand the nature of the contracts, the legal implications of such relationships, and the extent of your exposure to risk. Transactions involving foreign currency and derivatives carry a high level of risk and may not be suitable for many individuals. You must carefully assess the suitability of such transactions in light of your experience, objectives, financial resources, and other pertinent factors.
Foreign Currency and Derivatives Transactions
1.1 Leveraged Trading: Leveraged trading amplifies potential profits and losses. Lower margin requirements increase the risk of significant losses if the market moves against you. Margins can be as low as 0.5%. Trading on margin can result in losses exceeding your initial investment. The initial margin may appear small relative to the value of the contracts due to the “leverage” effect. Minor market movements can have a disproportionately large impact on your deposited funds. This can work in your favor or against you. You may incur losses up to the initial margin and any additional funds deposited with the Company. If the market moves against your position or margin requirements increase, the Company may require additional funds to maintain your position. Failure to provide additional funds may result in the Company closing your positions, and you will be liable for any resulting losses.
1.2 Risk-Reducing Orders and Strategies: Placing certain orders (e.g., “stop-loss” or “stop-limit” orders) to limit losses may be ineffective if market conditions prevent their execution (e.g., market illiquidity). Strategies involving combinations of positions (e.g., “spread” or “straddle”) may not be less risky than simple “long” or “short” positions.
Additional Risks Specific to Foreign Currency and Derivatives Transactions
2.1 Contract Conditions: Obtain detailed information from your broker about contract conditions and related obligations (e.g., delivery obligations under futures contracts or option expiration dates). Exchanges or clearinghouses may alter contract terms (including strike prices) to reflect market changes.
2.2 Trade Suspension or Restriction and Price Correlation: Certain market conditions (e.g., illiquidity) and market rules (e.g., trade suspension due to price limits) can increase the risk of losses by making it difficult or impossible to execute transactions or close positions. Losses may increase if you sell options. There may not always be a direct correlation between the prices of the asset and the derivative. The absence of a benchmark price can complicate “fair value” estimation.
2.3 Deposited Funds and Property: Familiarize yourself with protective measures for your deposited funds or assets, especially in cases of insolvency or bankruptcy of the dealing firm. The return of your funds or assets is subject to the laws and standards of the jurisdiction where the counterparty operates.
2.4 Commission Fees and Charges: Before trading, obtain clear details on all commission fees, remunerations, and other charges you will incur. These expenses will impact your net financial results (profit or loss).
2.5 Transactions in Other Jurisdictions: Trading on markets in other jurisdictions may expose you to additional risks. Regulations in these markets may differ in terms of investor protection. Your local regulatory authority cannot enforce compliance with rules set by foreign regulatory authorities or markets.
2.6 Currency Risks: Profits and losses from transactions involving contracts denominated in foreign currencies are affected by exchange rate fluctuations when converting from the contract currency to your account currency.
2.7 Liquidity Risk: Liquidity risk affects your ability to trade. It is the risk that your CFD or asset cannot be traded when you want to trade. Margin requirements are recalculated daily based on changes in the value of underlying assets. If the value decreases, you must immediately pay cash to restore the margin position. Failure to do so may result in the CFD provider closing your position, and you will be liable for any losses. Some CFD providers liquidate all your positions if you do not meet margin requirements, even if some positions are profitable. To keep your position open, you may need to allow the CFD provider to take additional payments from your credit card. In volatile markets, this can result in significant credit card debt.
2.8 “Stop Loss” Limits: Many CFD providers offer “stop loss” limits to automatically close your position at a specified price. However, these limits may be ineffective in rapidly moving markets or during market closures.
2.9 Execution Risk: Execution risk arises from delays between placing and executing orders. Market movements during this period can result in execution at a different price than expected. Some CFD providers allow trading when markets are closed, but prices may differ significantly from the closing price of the underlying asset, and spreads may be wider.
2.10 Counterparty Risk: Counterparty risk is the risk that the CFD provider defaults and cannot meet its financial obligations. If your funds are not segregated from the provider’s funds, you may not receive any monies due if the provider faces financial difficulties.
2.11 Trading Systems: Most trading systems use computers for order routing, balancing, and clearing. These systems are subject to temporary failures and malfunctions. Your ability to recover losses may depend on the liability limits set by system providers, markets, clearinghouses, and dealing firms. Obtain detailed information from your broker.
2.12 Electronic Trading: Trading on Electronic Communications Networks (ECNs) involves risks specific to such systems, including hardware or software failures. System failures may result in orders not being executed as instructed, not being executed at all, or inability to monitor positions or meet margin requirements.
2.13 Over-the-Counter (OTC) Operations: In some jurisdictions, firms can conduct OTC operations. Your broker may act as the counterparty. OTC operations may involve increased risks due to the complexity or impossibility of closing positions, estimating values, or determining fair prices. OTC operations may be subject to less stringent regulations. Familiarize yourself with the rules and risks before engaging in such operations.
Limitation of Liability
The Company, its employees, and representatives do not guarantee profits or the absence of risk. Clients must be fully aware of the risks when opening an account for margin trading in financial markets under these provisions.