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I. The Subscription Service
Strategic Trading will provide the individual as named in the on-line application form submitted to Strategic Trading with access to the information services available from time to time (the "Strategic Trading Web Site"), relating to exchange traded derivatives and foreign exchange, including but not limited to the following:
* Access to www.strategictradingllc.com
* Forecasts and analysis
to be referred to as the "Strategic Trading Subscription Service" starting from the date that we send your individual access key, user name and password to you (the "Commencement Date").
The Strategic Trading Subscription Service will then be made available to you for the period relating to the specific option that you choose as set out in Schedule 1 of these terms (the "Terms") subject always to you making payment of the relevant fees to Strategic Trading in accordance with that specific option, (also as set out in Schedule 1 of these Terms).
You are required to provide credit card payment details at the time of registration, and Strategic Tradings will gain authorization to charge the relevant monthly subscription cost to your credit card prior to issue of a, username and password.
Please read these Terms carefully as use of the Strategic Trading Subscription Service will be subject to the Terms.
By registering for and accessing the Strategic Trading Subscription Service you are agreeing to be bound by the Terms. In particular, please note that:
* You must satisfy yourself that you are entitled under applicable laws and regulations to use the Strategic Trading Subscription Service generally and any other services forming part of it; and
* From time to time, Strategic Trading may enter into agreements with certain industry groups or associations to provide their members with access to the Strategic Trading Subscription Service on terms that are specific to those members (for example access may be provided free of charge for a certain period).
Each of those members will be required to register by means of the separate sign up page and any specific terms that relate solely to the use of the members of the industry group or association in question are displayed on that page (the "Member Terms").
Members agree that they will be subject to, and be bound by both the specific terms that apply to them and the Terms. To the extent that there is any inconsistency between the Member Terms and the Terms, the Member Terms will take precedence.
2. Regulatory Notices
2.1 Strategic Trading is authorized by the laws of the State of Georgia, United States of America in respect of its investment activity to enable it to include investment advice and information as part of the services which it provides under these Terms. Content (as defined in clause 3.1 below) forming part of the Strategic Trading Subscription Service which constitutes investment advice and training is provided only for your general information and use and is not intended to address your particular requirements.
Any such content is not intended to be relied upon by you in the making (or refraining from making) of any specific investment or other decision.
Any investment advice included in the content of the Strategic Trading Subscription Service may not be suitable for you and you should on all occasions obtain independent advice before making any specific investment or other decision.
If a conflict of interest arises in relation to the investment advice provided by Strategic Trading, it will seek to ensure fair treatment for Users by operating a policy of independence.
For your information we would draw your attention to the following investment warnings. The price of investments and the income derived from them can go down as well as up and investors may not get back the amount they invested. Higher volatility investments are subject to sudden and large falls in value and a large loss on realization could equal the amount invested. In relation to speculative trading in foreign exchange, a small move in the exchange rate can render the total return negative.
In relation to transactions in derivatives, your attention is drawn to the warrants and derivatives risk warning notice. In relation to investments carrying contingent liability, the investor may not only lose the entire amount originally invested or deposited, but may also have to pay more later. A movement of exchange rates may have a separate effect, unfavorable as well as favorable, on the gain or loss otherwise experienced on the value, price or income of an investment. Past performance is not necessarily a guide to future performance.
It may be difficult for you to sell or value certain investments or to obtain reliable information about their value, or the extent of the risks to which they are exposed. Where information provided under the Strategic Trading Subscription Service consists of pricing or performance data, the data contained therein has been obtained from various sources believed by Strategic Trading to be reliable but neither they nor data computations based on them are guaranteed by Strategic Trading and may not be complete.
2.2 The Strategic Trading Subscription Service is not being offered in any jurisdiction where the provision or use of the Strategic Trading Subscription Service would be in breach of applicable laws or regulations. Strategic Trading makes no warranty, express or implied, that the Strategic Trading Subscription Service or the availability of the Strategic Trading Subscription Service in any particular jurisdiction outside of the State of Georgia is in compliance with any applicable laws or regulations.
Accordingly, if the provision or availability of the Strategic Trading Subscription Service or any part of it in your jurisdiction or to you (by reason of nationality, residence or otherwise) is prohibited by any applicable laws and regulations, the Strategic Trading Subscription Service is not directed at you. You accept that you must satisfy yourself that you are lawfully entitled to receive the Strategic Trading Subscription Service. Strategic Trading does not accept liability for any costs, losses or damages resulting from or related to the availability or content of the Strategic Trading Subscription Service. No part of the Content constitutes a solicitation to buy or sell any investment or to engage in any transaction in relation to investments in any jurisdiction.
2.3 Subject always to the other provisions of the Terms and this clause 2, Users of the Strategic Trading Subscription Service should note the following:
(a) Subject always to section 2.4 below, on registration, Users will be given access to the Strategic Trading Subscription Service which is only intended to act as a basic market information and intelligence support tool to assist Users trading in a specific market or managing a portfolio to make investment decisions. For the avoidance of doubt, the Strategic Trading Subscription Service is not intended to constitute investment advice or education.
Please note that you must satisfy yourself that you are lawfully entitled to use the Strategic Trading Subscription Service and the individual services that form part of it
2.4 In the event that Strategic Trading becomes aware that use of the Strategic Trading Subscription Service by a User in a particular jurisdiction gives rise to a breach of any applicable local law or regulations, Strategic Trading reserves the right to withdraw the entire Strategic Trading Subscription Service from that User (or generally within that jurisdiction as appropriate) either indefinitely or until Strategic Trading has taken such steps as are required (including but not limited to obtaining a local regulatory license) to remedy any such breach.
3. Registration
3.1 You are registering as a user of the Strategic Trading Subscription Service and consent to agreement and communication with Strategic Trading being in electronic form. Access to the Strategic Trading Subscription Service is via a user name and password, which is personal to you as the individual named in the registration application. Strategic Trading will issue each individual User with a user name and password which will be sent out by e-mail as soon as reasonably practicable after the User has submitted the registration details requested by Strategic Trading and the registration has been processed (the "Registration Date").
By using the user name and password included in the registration form to access the Strategic Trading Subscription Service, you confirm that you are aware of and have read and understood the terms and agree to comply with them in your use of the Strategic Trading Subscription Service, and in agreeing to these Terms, you are acknowledging that you have authority to bind the company or other legal entity of which you are an employee or officer.
This agreement will only come into effect and you will only be given access to the Strategic Trading Subscription Service from the Commencement Date. The User will be given access to the Strategic Trading Subscription Service and the information or materials comprised in the Strategic Trading Subscription Service, including but not limited to any text, images, tables, charts, graphs or data (the "Content") for the period relating to the specific option that is chosen by the User as set out in Schedule 1 of this agreement from the Commencement Date (the "Term") unless terminated earlier by Strategic Trading in accordance with these Terms.
3.2 Access to and use of the Strategic Trading Subscription Service is restricted to the individual User as registered with Strategic Trading. You are therefore only entitled to use the Strategic Trading Subscription Service exclusively for your own purposes and you shall not be entitled to use the Strategic Trading Subscription Service for or on behalf of any third party (who is not a registered as a User) nor do anything which would assist any such third party to gain access to any part of the Strategic Trading Subscription Service, for example, the user name and password may not be used by or divulged to any other third party (even if such a party is a business associate, colleague or an employee of the same organization).
3.3 Any individual who wishes to use the Strategic Trading Subscription Service over a network and who is not themselves a User is prohibited from accessing or attempting to access the Strategic Trading Subscription Service unless licensed to do so by Strategic Trading.
3.4 It is your responsibility to update any changes to the information supplied on registration (including in particular your e-mail address).
3.5 If you have any complaints about our performance under these Terms you should direct that complaint to our Compliance Officer who will investigate the nature of your complaint and try to resolve it. If you are dissatisfied with the outcome of our investigation, you may complain directly to the Financial Ombudsman Service if your complaint is within its terms of reference.
3.6 Strategic Trading may provide a free service, in such case, you may receive Email advertisement. If your email stops working, Strategic Trading may cancel your free service.
4. Termination of Registration
4.1 Subject to Strategic Trading's right to terminate the User's access to the Strategic Trading Subscription Service in accordance with the Terms, the User will be entitled to use the Strategic Trading Subscription Service for the Term (as set out in clause 3.1 above).
Unless Strategic Trading is notified by the User in accordance with the relevant notice periods required as set out in Schedule 1 before the end of the relevant Term, this agreement will continue for a further Term, which for the avoidance of doubt shall be for the relevant period relating to the specific option that was originally chosen by the User as set out in Schedule 1 of this agreement, which shall be charged at Strategic Trading's then current fees for subscription and subject to Strategic Trading's then current terms and conditions.
4.2 Notwithstanding the provisions of clause 4.1, Strategic Trading may terminate this agreement at any time without cause by not less than 28 (twenty-eight) days' notice in writing by e-mail to the User at the address provided by the User on registration or as subsequently updated via Email. The User's individual user name and password will become invalid immediately.
4.3 In the event that Strategic Trading terminates this agreement without cause in accordance with clause 8.2 above, Strategic Trading shall refund the proportion of the license fees paid by the User outstanding as at the date of termination for the remainder of the then current term on a pro rata basis.
4.4 Strategic Trading will from time to time review the User's use of the Strategic Trading Subscription Service. If Strategic Trading has reasonable grounds for believing that the User is in breach of any of the terms of this agreement (including but without limitation if the User is not using the Strategic Trading Subscription Service in accordance with clause 10 or has not paid the relevant fees as required by this agreement, Strategic Trading reserves the right to withdraw the User's access to the Strategic Trading Subscription Service and terminate this agreement at any time, without refund, by giving the User notice in writing by e-mail, which will be deemed to be received one hour after dispatch.
4.5 Users may unsubscribe, at that point the agreement will terminate and the User's user name and password will become invalid immediately. For the avoidance of doubt, no refunds shall be provided in the event that the User discontinues use of the Strategic Trading Subscription Service during the then current term.
4.6 Use of the Strategic Trading Subscription Service shall be subject to the User paying to Strategic Trading the fees set out in Schedule 1 which vary according to the specific option chosen by the User. Each option is also subject to a specific Term set out in Schedule 1. The User will be required to provide their credit card details to Strategic Trading on registration for the purposes of billing the fees only.
4.7 Strategic Trading may provide a free service, in such case, you may receive Email advertisement. If your email stops working, Strategic Trading may cancel your free service.
5. Intellectual Property Rights
5.1 The Intellectual Property Rights (as defined) in the Strategic Trading Subscription Service or in any of the Content accessible or comprised in the Strategic Trading Subscription Service shall at all times remain the property of Strategic Trading or the property of a third party which owns the Intellectual Property Rights in any such information or materials (the "Licensor").
5.2 Strategic Trading is not aware of any actual or alleged infringement of any Intellectual Property Rights of third parties which relate to the Strategic Trading Subscription Service but for the avoidance of doubt in any event Strategic Trading shall not be liable to the User if the Strategic Trading Subscription Service infringes any third party Intellectual Property Rights.
5.3 For these purposes Intellectual Property Rights shall mean all copyright, patent rights, trade marks, design rights, rights in or relating to databases, rights in or relating to confidential information or any other intellectual property rights (registered or unregistered) in the Strategic Trading Subscription Service owned by or licensed to Strategic Trading by a third party where that third party owns the Intellectual Property Rights in information provided to Strategic Trading for use as part of the content of the Strategic Trading Subscription Service.
6. Use of the Content of the Strategic Trading Subscription Service
6.1 The User may not give, sell or otherwise make available the whole or any part of the Content and Users are not allowed to copy or make use of any of the Content for any other commercial purpose other than for their own internal business purposes.
6.2 Subject to the provisions of clause 6.3, any text, images, tables, charts, graphs or other data or material forming part of the Content or part of any individual section of the Content may be downloaded, printed, copied or reproduced from the Strategic Trading Subscription Service by the User for the purposes as permitted by this agreement. Any such insubstantial part of the Content must be attributed to Strategic Trading or third party Licensor as appropriate. Where the Content is licensed to Strategic Trading by a third party Licensor or is sourced from another third party information Content Supplier, this will be indicated on the relevant screen of the Strategic Trading Web Site Software.
6.3 The User is, however, expressly prohibited from:
(a) downloading, printing, copying or otherwise reproducing the whole or a substantial part of the Content; and
(b) downloading, printing, copying or otherwise reproducing or accessing any of the Content other than in the format as presented on the Strategic Trading Web Site Software by means of the Strategic Trading Subscription Service. For the avoidance of doubt, Users may not in any circumstances access, download, print, copy or otherwise reproduce any of the information, materials, data, text, images, tables, charts or graphs underlying the Content which is provided directly to Strategic Trading by third party Licensors or third party information providers, including but not limited to the relevant Exchanges.
(c) either personally or by an agent and either on the User's own account or for or in association with any other person directly or indirectly solicit or endeavor to entice away from Strategic Trading any Restricted Person or person who has been a Restricted Person during the six months immediately preceding the User's registration or induce any Restricted Person to breach their contract of employment or encourage a Restricted Person to resign.
Strategic Trading may consent to waive this provision 10.3(c) on payment of a fee not less than three times the annualized salary of the Restricted Person for the six preceding months.
6.4 The Strategic Trading Web Site Software contains trade marks, including the Strategic Trading name and logo. All trade marks included on the Strategic Trading Web Site Software belong to Content Supplier or have been licensed to Content Supplier by the trade mark owner(s) for use on the Strategic Trading Web Site Software. Users are not allowed to remove any copyright, trade mark or other intellectual property notices contained in the original material from any of the Content copied or printed off from the Strategic Trading Web Site. If Users wish to make any other use of any of the trade marks other than as expressly permitted by the Terms, Users must obtain the prior written permission of the owner of that trade mark.
6.5 If the User has any doubt as to whether any of the Content may be downloaded, printed, copied or otherwise reproduced, Strategic Trading should be contacted in advance for clarification. Users should e-mail the Strategic Trading Web site Manager at sales@strategictradingllc.com in respect of any such clarification and the decision of Strategic Trading shall be final and binding upon the User. For the avoidance of doubt, this information may only be used for internal business purposes and nothing in this section will allow the User to disclose any such information to a third party.
7. Disclaimer
7.1 Strategic Trading does not accept any responsibility for any statement in or information making up the Content. The Content is provided by Strategic Trading in good faith and although Strategic Trading has used reasonable endeavors to obtain the Content from reputable sources and Licensors, Strategic Trading is not able to check the Content and therefore does not warrant or give any assurance in respect of the adequacy, accuracy or completeness of the Content. The User should not rely on the Content without first checking its adequacy, accuracy and completeness with another source and the User shall be solely responsible for all losses or damage which arise as a consequence of any failure to properly check the Content or otherwise in respect of their use of the Content.
Users acknowledge that any reliance on the Content shall be at the User's sole risk. Strategic Trading reserves the right, in its sole discretion and without any obligation, to make improvements to, or correct any error or omission in the Content. The Content may be delayed as specified by Exchanges, and/or by any other Licensors and sources. Strategic Trading specifically represents that by providing the Strategic Trading Subscription Service and the Content, it does not give regard to or intend to address any specific requirements of individual Users. Strategic Trading does not make any recommendation, advise or advocate the purchase or sale of any security or investment.
7.2 The Strategic Trading Web Site Software and the Strategic Trading Subscription Service may provide links to, and be linked from, other web sites (the "Linked Sites"). Strategic Trading has no control over such Linked Sites and such links are provided for the convenience of Users only. Strategic Trading makes no representations or warranty (whether express or implied) in respect of any of the Linked Sites or in respect of any of the content, materials, products, goods or services available via such Linked Sites. Strategic Trading therefore does not accept any liability generally for the Linked Sites nor in respect of the accuracy or otherwise of any such content, materials, products or services, or the security of any of the Linked Sites. Use of such Linked Sites is at the User's sole risk. Users should be aware that Strategic Trading may receive remuneration or commission from the operators of Linked Sites.
7.3 Strategic Trading gives no warranties of any kind concerning the Strategic Trading Subscription Service or the Content and in particular, Strategic Trading does not warrant that the Software, Subscription Service or the Content is virus free. The User should take their own measures and precautions to ensure against the infection by or introduction of viruses onto their own systems and Strategic Trading accepts no responsibility for such infection or contamination by any virus or any other thing with destructive properties.
7.4 Although Strategic Trading will attempt to provide constant, uninterrupted access to the Strategic Trading Subscription Service, this is not guaranteed and there may be times when Strategic Trading is unable to supply the Strategic Trading Subscription Service to the User, for example, as a result of technical difficulties, including but not limited to problems encountered by Strategic Trading's own service provider or Strategic Trading's own internal systems.
8. Liability
8.1 The total liability of Strategic Trading in contract, tort or otherwise (including liability for negligence or breach of statutory duty) under or in connection with this agreement shall be limited to:
(a) a sum equal to the license fees paid by the User to Strategic Trading in the period of 12 calendar months immediately preceding the event giving rise to such liability.
8.2 Strategic Trading does not accept any liability under or in relation to this agreement or its subject matter (whether such liability arises due to negligence, breach of contract, misrepresentation or for any other reason) for any:
(a) loss of profits;
(b) loss of sales or turnover;
(c) loss of business;
(d) loss of, or loss of use of, any software and/or data:
(e) loss of use of any computer or other equipment or plant;
(f) loss of or damage to reputation;
(g) loss of opportunity;
(h) loss of information;
(i) loss of anticipated savings;
(j) lost or wasted time;
(k) indirect loss or damage;
(l) consequential loss or damage; or
(m) special loss or damage;
even if Strategic Trading shall have been advised of the possibility of any such loss and for the purposes of this clause the term "loss" includes a partial loss or reduction in value as well as a complete or total loss.
8.3 All warranties, conditions, terms, undertakings and obligations not expressly set out in this agreement are excluded from this agreement and all warranties, conditions, terms, undertakings and obligations implied by statute, common law, custom, trade usage, course of dealing or otherwise, all of which are excluded to the fullest extent permitted by law.
9. Advertising & Sponsorship on the Strategic Trading Web site and/or the Strategic Trading Subscription Service
The Strategic Trading Web Site and/or the Strategic Trading Subscription Service may contain advertising material submitted by third parties. The individual third party advertisers are solely responsible for ensuring that any advertising material included in the Strategic Trading Web Site and/or the Strategic Trading Subscription Service complies with applicable laws and regulations. Strategic Trading accepts no responsibility for the content of any such advertising material, including without limitation liability for any inaccuracy, error or omission therein.
10. Changes to these Terms
Strategic Trading reserves the right to make amendments to the Terms which govern this agreement from time to time (including any of the charges payable in connection with the Subscription Service) by posting the amended terms (the "New Terms") on the Strategic Trading Web Site not less than 14 days before the New Terms are due to take effect. You shall review the Strategic Trading Web Site periodically to be aware of any such New Terms and your continued access or use of Subscription Service shall be deemed your conclusive acceptance of any such New Terms.
11. Jurisdiction
This agreement is subject to the exclusive jurisdiction of the Georgia courts, United States of America
12. Assignment and sub-contracting
12.1 The User may not assign this agreement or any part of it without the prior written consent of Strategic Trading.
12.2 Strategic Trading may assign this agreement or any part of it or sub-contract the performance of any of its obligations under this agreement on giving written notice by e-mail to the User.
13. Unenforceable Clauses
If any provision of this agreement is held for any reason to be invalid, unlawful or unenforceable by a court of competent jurisdiction or other competent authority, then such provision shall be treated as severed from this agreement and shall not affect the validity or enforceability of any other provision of this agreement or of the remainder of this agreement as a whole.
14. Force Majeure
Strategic Trading shall not be liable for any delay or failure to perform any of its obligations under this agreement if such delay or failure is caused by any circumstances beyond its reasonable control (including without limitation any delay caused by any act or default of the other party).
15. Entire Agreement
Subject to clause 7.1, this agreement comprises the entire agreement between the parties relating to the subject matter hereof, to the exclusion of all other terms, conditions, prior or collateral agreements, negotiations, notices of intention, promises, warranties, undertakings and representations (collectively "Representations") other than those Representations expressly included in this agreement.
The User confirms that it has not been induced to enter into this agreement on the basis of any Representations other than those expressly included in this agreement.
Neither party shall be bound by or be liable for any Representation of any nature which are not expressly included in this agreement.
WARRANTS AND DERIVATIVES RISK WARNING NOTICE
This notice is provided to you, as a private customer, in compliance with the rules. This notice cannot disclose all the risks and other significant aspects of warrants and/or derivative products such as futures, options, and contracts for differences. You should not deal in these products unless you understand their nature and the extent of your exposure to risk. You should also be satisfied that the product is suitable for you in the light of your circumstances and financial position. Certain strategies, such as a "spread" position or a "straddle", may be as risky as a simple "long" or "short" position.
Although warrants and/or derivative 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 be aware of the following points.
Warrants
A warrant is a time-limited right to subscribe for shares, debentures, loan stock or government securities and is exercisable against the original issuer of the underlying securities. A relatively small movement in the price of the underlying security results in a disproportionately large movement, unfavorable or favorable, in the price of the warrant. The prices of warrants can therefore be volatile.
It is essential for anyone who is considering purchasing warrants to understand that the right to subscribe which a warrant confers is invariably limited in time with the consequence that if the investor fails to exercise this right within the predetermined time-scale then the investment becomes worthless.
You should not buy a warrant unless you are prepared to sustain a total loss of the money you have invested plus any commission or other transaction charges.
Some other instruments are also called warrants but are actually options (for example, a right to acquire securities which is exercisable against someone other than the original issuer of the securities, often called a "covered warrant").
Off-exchange warrant transactions
Transactions in off-exchange warrants may involve greater risk than dealing in exchange traded warrants because there is no exchange market through which to liquidate your position, or to assess the value of the warrant or the exposure to risk. Bid and offer prices need not be quoted, and even where they are, they will be established by dealers in these instruments and consequently it may be difficult to establish what is a fair price.
Your firm must make it clear to you if you are entering into an off-exchange transaction and advise you of any risks involved.
Futures
Transactions in futures involve the obligation to make, or to take, delivery of the underlying asset of the contract at a future date, or in some cases to settle the position with cash. They carry a high degree of risk. The "gearing" or "leverage" often obtainable in futures trading means that a small deposit or down payment can lead to large losses as well as gains. It also means that a relatively small movement can lead to a proportionately much larger movement in the value of your investment, and this can work against you as well as for you. Futures transactions have a contingent liability, and you should be aware of the implications of this, in particular the margining requirements.
Options
There are many different types of options with different characteristics subject to the following conditions:
Buying Options:
Buying options involves less risk than selling options because, if the price of the underlying asset moves against you, you can simply allow the option to lapse. The maximum loss is limited to the premium, plus any commission or other transaction charges. However, if you buy a call option on a futures contract and you later exercise the option, you will acquire the future. This will expose you to the risks described under "futures" and "contingent liability investment transactions".
Writing Options:
If you write an option, the risk involved is considerably greater than buying options. You may be liable for margin to maintain your position and a loss may be sustained well in excess of the premium received. By writing an option, you accept a legal obligation to purchase or sell the underlying asset if the option is exercised against you, however far the market price has moved away from the exercise price. If you already own the underlying asset which you have contracted to sell (when the options will be known as "covered call options") the risk is reduced. If you do not own the underlying asset ("uncovered call options") the risk can be unlimited. Only experienced persons should contemplate writing uncovered options, and then only after securing full details of the applicable conditions and potential risk exposure.
Traditional Options:
Certain London Stock Exchange member firms under special exchange rules write a particular type of option called a "traditional option". These may involve greater risk than other options. Two-way prices are not usually quoted and there is no exchange market on which to close out an option position or to effect an equal and opposite transaction to reverse an open position. It may be difficult to assess its value or for the seller of such an option to manage his exposure to risk.
Certain options markets operate on a margined basis, under which buyers do not pay the full premium on their option at the time they purchase it. In this situation you may subsequently be called upon to pay margin on the option up to the level of your premium. If you fail to do so as required, your position may be closed or liquidated in the same way as a futures position.
Contracts for differences
Futures and options contracts can also be referred to as contracts for differences. These can be options and futures on the FTSE 100 index or any other index, as well as currently and interest rate swaps. However, unlike other futures and options, these contracts can only be settled in cash. Investing in a contract for differences carries the same risks as investing in a future or an option. Transactions in contracts for differences may also have a contingent liability and you should be aware of the implications.
Off-exchange transactions in derivatives
It may not always be apparent whether or not a particular derivative is arranged on exchange or in an off-exchange derivative transaction. Your firm must make it clear to you if you are entering into an off-exchange derivative transaction.
While some off-exchange markets are highly liquid, transactions in off-exchange or "non transferable" derivatives may involve greater risk than investing in on-exchange derivatives because there is no exchange market on which to close out an open position. It may be impossible to liquidate an existing position, to assess the value of the position arising from an off-exchange transaction or to assess the exposure to risk.
Bid prices and offer prices need not be quoted, and, even where they are, they will be established by dealers in these instruments and consequently it may be difficult to establish what is a fair price.
Contingent liability investment transaction
Contingent liability investment transactions, which are margined, require you to make a series of payments against the purchase price, instead of paying the whole purchase price immediately.
If you trade in futures contracts for differences or sell options, you may sustain a total loss of the margin you deposit with your firm to establish or maintain a position. If the market moves against you, you may be called upon to pay substantial additional margin at short notice to maintain the position. If you fail to do so within the time required, your position may be liquidated at a loss and you will be responsible for the resulting deficit. Even if a transaction is not margined, it may still carry an obligation to make further payments in certain circumstances over and above any amount paid when you entered the contract.
Limited liability transactions
Before entering into a limited liability transaction, you should obtain from your firm or the firm with whom you are dealing a formal written statement confirming that the extent of your loss liability on each transaction will be limited to an amount agreed by you before you enter into the transaction.
The amount you can lose in limited liability transactions will be less than in other margined transactions, which have no predetermined loss limit. Nevertheless, even though the extent of loss will be subject to the agreed limit, you may sustain the loss in a relatively short time. Your loss may be limited, but the risk of sustaining a total loss to the amount agreed is substantial.
Collateral
If you deposit collateral as security with your firm, the way in which it will be treated will vary according to the type of transaction and where it is traded. There could be significant differences in the treatment of your collateral, depending on whether you are trading on a recognized or designated investment exchange, with the rules of that exchange (and the associated clearing house) applying, or trading off-exchange. Deposited collateral may lose its identity as your property once dealings on your behalf are undertaken. Even if your dealings should ultimately prove profitable, you may not get back the same assets which you deposited and may have to accept payment in cash. You should ascertain from your firm how your collateral will be dealt with.
Commissions
Before you begin to trade, you should obtain details of all commissions and other charges for which you will be liable. If any charges are not expressed in money terms (but, for example, as a percentage of contract value), you should obtain a clear and written explanation, including appropriate examples, to establish what such charges are likely to mean in specific money terms. In the case of futures, when commission is charged as a percentage, it will normally be as a percentage of the total contract value, and not simply as a percentage of your initial payment.
Suspensions of trading
Under certain trading conditions it may be difficult or impossible to liquidate a position. This may occur, for example, at times of rapid price movement if the price rises or falls in one trading session to such an extent that under the rules of the relevant exchange trading is suspended or restricted. Placing a stop-loss order will not necessarily limit your losses to the intended amounts, because market conditions may make it impossible to execute such an order at the stipulated price.
Clearing house protections
On many exchanges, the performance of a transaction by your firm (or third party with whom he is dealing on your behalf) is "guaranteed" by the exchange or clearing house. However, this guarantee is unlikely in most circumstances to cover you, the customer, and may not protect you if your firm or another party defaults on its obligations to you. On request, your firm must explain and any protection provided to you under the clearing guarantee applicable to any on-exchange derivatives in which you are dealing. There is no clearing house for traditional options, nor normally for off-exchange instruments which are not traded under the rules of a recognized or designated investment exchange.
Insolvency
Your firm's insolvency or default, or that of any other brokers involved with your transaction, may lead to positions being liquidated or closed out without your consent. In certain circumstances, you may not get back the actual assets which you lodged as collateral and you may have to accept any available payments in cash. On request, your firm must provide an explanation of the extent to which it will accept liability for any insolvency of, or default by, other firms involved with your transactions.
I CONFIRM THAT I HAVE READ, UNDERSTOOD AND ACCEPT THE SUBSCRIPTION SERVICE TERMS AND CONDITIONS AND THE WARRANTS AND DERIVATIVES RISK WARNING NOTICE.
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