|
You should carefully consider the objectives of your investments, your knowledge and experience, as well as the ability and willingness to take risks before deciding to participate in any trades. Do not invest your assets in this business if their loss can negatively affect your lifestyle.
Notification of risks related to CFD and conversion arbitrage operations in foreign currencies on the "Margin Trading" terms.
- The purpose of this notification is to provide a Client with the information about the risks related to operations in CFD and in the international foreign exchange market (FOREX) and warn of probable losses. We draw your attention that this notification does not cover all types of risks in the FOREX market and in CFD because of the great variety of situations that may arise.
- Each participant in the FOREX market and in CFD should distinctly understand that this type of activities involves a high degree of risk. The Client must carefully assess his abilities and financial opportunities with regard to dealing in FOREX and/or CFD.
- For the purpose of this Notification, the risk of performing arbitrage operations and/or operations in CFD means the possibility of an event bringing significant losses for the Client.
- The basic risks in the FOREX market and in CFD are classified on the basis of their origin:
- The Leverage
The collateral margin is smaller than the required minimum amount for a transaction, therefore transactions are performed with a leverage. A relatively insignificant market movement produces a proportionally larger impact on the Client’s assets deposited with a bank to perform operations in CFD and/or in the international FOREX market. If the market moves against the position of the Client, the Client may suffer loss equal to the initially deposited collateral margin and any other assets deposited to maintain the position.
The responsibility for determining an appropriate trading strategy, estimation of risks and use of financial resources is totally upon the Client.
- Market risk
Because of the access of different participants, having various purposes, opportunities and amounts of equity, to the foreign exchange market, it is one of the riskiest markets from the point of intra-day ranges for exchange rates. Due to sharp and substantial changes in exchange rates, the Client’s orders may be executed at the rates which are significantly different from those stated in the orders, and placing orders for reducing losses/profits sometimes may be inefficient since conditions of the market may make it impossible to execute these orders.
In case of CFD transactions Client risks additionally. There are time gaps between trade sessions of CFD underlying instruments. Client can not make any trades inside these gaps and as result Client may has extremely exposure and losses when next trade session starts. Margin requirement changes may occur time to time that may be cause of an additional exposures.
- Technical risk
Faults in electronic equipment used to perform arbitrage operations may lead to unexpected and unpredictable results and therefore to losses on the Client’s operations in CFD and/or in the FOREX market. Carrying out transactions via an electronic trading system, the Client runs the risk related with possible faults in the system, including equipment and software failures. In case of a fault in equipment.
- Legal, social and political risks
The risk of changes in the legislation implies the possibility of suffering loss on foreign currency investments due to the introduction of new laws or changes in the existing ones, that includes tax regulations as well. The risk of radical change in the political or economic course of the country, especially when the new President takes the post, in case of changes in the Parliament or Government, the risk of social unrest, including strikes.
- Force majeure
The Company cannot be responsible for the losses which are directly or indirectly caused by the restrictions imposed by the Government, or related to foreign exchange and market regulations, interruption of trading, military actions or other events which are usually called "force majeure".
- Taking into account all the risks associated with operations in CFD and/or on the FOREX market, the Company recommends the Client to carefully consider whether these risks are acceptable for the Client with regard to his targets and financial opportunities.
- This notification is not meant to make the Client turn away from dealing in CFD and/or the international FOREX market, it is designed to help the Client to assess the risks of this type of business and with full responsibility step into determining the trading strategy for carrying out arbitrage transactions.
|
