Risk Disclosure

A CFD is an agreement between a ‘buyer’ and a ‘seller’ to exchange the difference between the current price of an underlying asset (currencies, commodities, indices, shares etc.) and its price when the contract is closed.

CFDs are leveraged products. They offer exposure to the markets while requiring you to only put down a small margin (‘deposit’) of the total value of the trade. They allow investors to take advantage of prices moving up (by taking ‘long positions’) or prices moving down (by taking ‘short positions’) on underlying assets.

When the contract is closed you will receive or pay the difference between the closing value and the opening value of the CFD and/or the underlying asset(s). If the difference is positive, the Company pays you. If the difference is negative, you must pay the Company. CFDs might be seemed similar to mainstream investments such as shares but they are different as you never actually buy or own the asset underlying the CFD.

Although CFDs and other financial derivative products can be utilized for the management of investment risk, some of these products are unsuitable and not appropriate for many clients as they carry a high degree of risk. CFDs and other financial derivatives are leveraged products and involve a high level of risk. It is possible to lose all your capital.

You, the Client are responsible for any the losses in your account. Consequently, you should be prepared to lose all the invested capital. Do not invest money you cannot afford to lose.

Before you open a CFD trade or any other financial derivative product, you are required to maintain a margin. Margin is usually a relatively modest proportion of the overall contract value. This means that you will be trading using “leverage” or “gearing”.

The “gearing” or “leverage” is often obtainable in trading CFDs and other financial derivative products. This means a relatively small market movement can lead to a proportionately much larger movement in the value of a client’s position and this can work either against the client or for the client. The greater the leverage, the greater the risk.

At all times during which the client has an open trades, he must maintain enough equity, consider all running profits and losses, for meeting the margin requirements. If the prices move against the client and the client does not have sufficient balance in his account the client must deposit funds to avoid any margin calls otherwise the company will be entitled to close one or more or all the clients’ trades regardless of whether the client agrees with the Company’s decision to close his trade(s).

The Company requires all clients to pass through an appropriateness test during the application process and will warn the client, if on the basis of the information provided, that trading CFDs or any other derivative product is not appropriate based on the client’s profile.

When a client trades CFDs with the Company, the client will be entering into an off-exchange (OTC) derivative transaction, by placing his orders through the Company’s trading platform. OTC transactions may involve greater risk than investing in on-exchange derivatives because there is no exchange market on which to close out an open position. The client needs to open and close a position with the Company that is not transferable to any other person. In this case, the client may be exposed to the risk of the Company’s default.

Counterparty risk is the risk that your counterparty may default and be unable to meet its financial obligations.

The Company holds client money in an account that is segregated from other clients’ funds and the Company’s own money, in accordance with current regulations but this may not afford complete protection.

CFDs and other financial derivative products are instruments that allow the client to trade on price movements in underlying markets/instruments. The Company’s prices are based on the underlying instruments/markets.

It is important for clients to understand that the fluctuation of the underlying instrument may influence the value of the derivative product and affect the client’s profitability. Clients must also be aware of “gapping” where such events can result in a significant profit or loss on the client’s account. “Gapping” can occur when the underlying instrument/market opens at a different price to when it closed.

There are some circumstances in which a ‘stop loss’ limit is ineffective, for example, where there are rapid price movements or market closure and the market moves past the stop loss mark too quickly to effect a trade at that price. Stop limits cannot always protect you from losses.

Liquidity risk can affect your ability to trade. Some financial instruments may not become immediately liquid as a result, for example, of reduced price availability or high demand and the client may not be able to sell them or easily obtain information on the value of these financial instruments or the extent of the associated risks.

Execution risk is associated with the fact that trades may not take place immediately. For example, there might be a time lag between the moment you place your order and the moment it is executed. In this period, the market might have moved against you. That is, your order is not executed at the price you expected.

If trading after the market is closed, be aware that the prices for these trades can differ widely from the closing price of the underlying asset. In many cases, the spread can be wider than it is when the market is open.

If you do not have enough time to monitor your investment on regular basis, you should not trade CFDs or other complex financial instruments. These products are not suitable to ‘buy and hold’ trading. They can require constant monitoring over a short period of time. Even maintaining your investment overnight exposes you to greater risk and additional costs. The volatility of the market together with the extra leverage on your investment can result in rapid changes to your overall investment position. Immediate action may be required to manage your risk exposure or to post additional margin.

All relevant costs and charges information will be provided to you by the Company or set out on the Company’s website. Clients should be aware of such costs and charges that may influence the account profitability of the client.

In addition to any profit or losses, there are different types of costs linked to transactions in CFDs. Costs will impact the effective return. Examples of costs include commissions charged by the Company. Costs related to CFD trading may also include bid-offer spreads, daily and overnight financing costs, account management fees and taxes. These costs can be complex to calculate and may outweigh the gross profits from a trade.

If a client holds any positions overnight, an applicable swap charge will apply. The swap values are clearly stated on the Company’s website and accepted by the Client during the account registration process as they are described in the Company’s terms and conditions.

The swap rate is mainly dependent on the level of interest rates as well as the Company’s fee for having an open position overnight. The Company has the discretion to change the level of the swap rate on each Financial Instrument at any given time and the Client acknowledges that he will be informed by the Company’s main website. The Client further acknowledges that he is responsible for reviewing the contract specifications located on the Company’s main website and for being updated on the level of swap value prior to placing any order with the Company.

Derivatives products are complex instruments for which special risks apply. This notice is provided to you as a retail client. This notice cannot disclose all the risks and other significant aspects of complex instruments. You should not deal with complex instruments unless you understand their nature and your exposure to risk. You should be satisfied that the products are suitable for you in the light of your circumstances and financial position.

Although complex instruments can be utilized for the management of investment risk, some of these products are unsuitable for many investors. Different instruments involve different levels of exposure to risk and in deciding whether to trade in such instruments you should first make acquaint yourself with the risks associated with such investments. You should seek independent financial advice if you are unsure whether such complex instruments are appropriate for you.

You should never invest funds into CFD products that you cannot afford to lose.

You hereby acknowledge and declares that you have read, understood and accept, without any reservation, all the information included herein including the following:

• that the value of a Financial Instrument (CFDs or any other derivative product) may decrease and a client may receive less money than originally invested or the value of the financial instrument may present high fluctuations. It is possible that the invested capital may become of no value.

• that information on past performance of a Financial Instrument does not guarantee the present and/or future performance. The use of historic data does not constitute a binding or safe forecast as to the corresponding future return of the Financial Instrument(s) to which such data refers.

• that some Financial Instruments may not become immediately liquid due to various reasons such as reduced demand and the Company may not be in a position to sell them easily or obtain information on the value of such Financial Instruments or the extent of any related or inherent risk concerning such Financial Instruments.

• that when a Financial Instrument is negotiated in a currency other than the currency of the client’s country of residence, any changes in an exchange rate may have a negative effect on the Financial Instruments’ value, price and performance.

• that a Financial Instrument in a foreign market may entail risks different to the usual risks in the markets at the client’s country of residence. The prospect of profit or loss from transactions in foreign markets may also be influenced by exchange rate fluctuations.