RISK DISCLOSURE STATEMENT
The information in this Risk Disclosure Statement is general information only and does not take into account your personal objectives, financial situation and needs. You should consider these things and seek independent professional advice before making a decision about our financial products. You must be satisfied that any trading you undertake in relation to the products described in this Risk Disclosure Statement is appropriate in view of your objectives, financial situation and needs. If you wish to conclude any of the Transactions you are required to agree to the terms of the Client Agreement.
You should be aware of the following points:
All stock market based investments are exposed to a degree of risk.
Market fluctuations may have an effect on the value, price or income of investments.
Investment capital is not guaranteed and past performance is not a guide to future investment performance.
You are responsible for the selection of any transaction that you place on the trading platform. As such, the performance of any trade will depend mainly on investment decisions made by you. QUICKTRADE does not make any representations regarding the performance of any investment.
Under certain market conditions it may be difficult or impossible to close out a position. This may occur, for example, where trading is suspended or restricted at times of rapid price movement.
Where permitted, placing a stop-loss order will not necessarily limit your losses to the intended amounts, as market conditions may make it impossible to execute such orders at the stipulated price.
Prior to the commencement of trading, you should require from your broker written confirmation of all current commission, fees and other transaction charges for which you will be liable.
Your broker’s insolvency or that of any other brokers involved in your contracts may lead to your positions being closed out without your consent.
Your ability to trade depends on the continued operation of, among other things, the QuickTrade MetaTrader 5 Platform, the internet, and your personal computer. A fault, delay or failure of any of these things could prevent you from placing Orders and may result in losses on your Open positions.
You should read all available information on the trading platform including, but not limited to, the client Terms and Conditions and the “frequently asked questions” in order to properly consider your risks. • You should carefully consider whether your financial position permits you to participate in a syndicate. Areas of particular concern are charges for management, advisory and brokerage fees; the performance record of the syndicate and for how long it has been operating; and the credibility of management.
Your broker should explain to you the meaning of the various terms set out herein so that you are fully aware of their significance.
You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances.
Before trading listed instruments on the JSE you should be aware of tax consequences and on this you should consult your lawyer, accountant or other tax advisor.
RISK DISCLOSURE RELATING TO MARGIN TRANSACTIONS
Trading in Margin Transactions such as those described in this Risk Disclosure Statement is not suitable for all investors.
Trading in Margin CFD and Margin FX Transactions involves the risk of losing substantially more than your initial investment and any margin payments.
The Client Agreement is incorporated by reference into this Risk Disclosure Statement. This Risk Disclosure Statement and the Client Agreement may be viewed online on QUICKTRADE’s website.
As discussed throughout this Risk Disclosure Statement, certain specific information that is subject to change frequently (eg current fees, charges, trading hours for specfic underlying instruments and Margin Requirements) that is applicable to a Margin Transaction is contained in the Margin Platform Addendum & Product Schedule. These documents are subject to change frequently and you should ensure you have the most up-to-date versions prior to entering Margin Transaction with us. The most up-to-date versions are available, free of charge, from the QUICKTRADE website or by contacting us.
Important Notice and Disclaimer from QUICKTRADE
Decisions to enter into transactions involving foreign exchange and CFD products are very important. They often have significant risks and consequences.
This Risk Disclosure Statement may not contain all of the information that you need in order to fully understand Margin Transactions and all the risks involved, and you should undertake your own independent assessment having regard to your circumstances. You should not enter into any Margin Transaction with QUICKTRADE unless you:
understand and accept the terms, conditions and risks of the Margin Transaction;
are satisfied it is suitable for your financial situation, objectives and needs; and
understand foreign exchange and derivative markets and how they operate.
It is your responsibility to ensure that you fully understand the products and each Margin Transaction, how they are traded and the risks involved. We recommend that you obtain independent advice (including tax, legal and financial advice).
To the extent permitted by law, neither QUICKTRADE nor its affiliates accepts any responsibility for errors or misstatements, negligent or otherwise, nor for any direct, indirect, consequential or other loss arising from any use of this Risk Disclosure Statement and or/further communication in relation to it.
Significant Risks Explained
You should be aware that trading in the Margin Transactions involve risks. It is important that you carefully consider whether trading in Margin Transactions is appropriate for you in light of your investment objectives, financial situation and needs.
Financial margin based products carry a high degree of risk. Any transaction is exposed to, among other things, changes in a country’s political condition, economic climate, acts of nature and so on, all of which may substantially affect the price or availability of a given underlying instrument or currency.
At all times, if you have Transactions open with us your potential loss can be substantial and is not limited to any amount (even when you have placed a Stop Loss Order in respect of the Transaction). It is reasonably foreseeable that, at the end of a Transaction, you may receive, in total, less than the amount paid to QUICKTRADE under that Transaction.
QUICKTRADE recommends that you do not risk money that you are not in a position to lose and that you adopt a philosophy of capital preservation and implement risk mitigation techniques (such as the use of stop loss orders).
Trading margin contracts such as the Margin FX and CFDs described in this document involves the risk of losing substantially more than your initial investment and any margin payments.
The following is a description of significant risks associated with trading Margin Transactions offered by QUICKTRADE.
Derivatives Risks Generally
The risk of loss in trading in derivatives contracts can be substantial. You should carefully consider whether trading is appropriate for you in light of your personal and financial circumstances. In deciding whether or not you will become involved in trading, you should be aware of the following matters:
(a) You could sustain a total loss of the amount that you deposit with QUICKTRADE to establish or maintain a position. Your loss is not limited to that amount (i.e. you could lose additional money beyond the funds you have deposited with us). In this situation QUICKTRADE will require those funds to be paid immediately.
(b) If the market moves against your position, you will be required to deposit additional funds as margin in order to maintain your position and the minimum required Free Margin. Those additional funds may be substantial. If you fail to provide those additional funds QUICKTRADE will close out some or all of your open transactions.
(c) Under certain market conditions, it could become difficult or impossible for you to manage the risk of open transactions by entering into opposite transactions to close out existing positions.
(d) Under certain market conditions the prices of our products may not maintain their usual relationship with the underlying financial market.
(e) The products offered by QUICKTRADE will always involve risk.
Stop Loss Orders may be available and may be used to attempt to limit your potential loss. However, Stop Loss Orders are not effective in all cases and under certain market conditions, prices can go through the level specified in a Stop Loss Order and may be executed at a price that is worse for you than the price you had specified in that Stop Loss Order. Under no circumstances does QUICKTRADE guarantee that a Stop Loss Order will be executed at the price you specify.
(f) The high degree of leverage that is obtainable in trading some of the products offered by QUICKTRADE because of the small margin requirements can work against you as well as for you. The use of leverage can lead to large losses because even a slight fluctuation in the market could result in substantial losses if the fluctuation is in a direction that is unfavourable to your position. Trading in the products offered by Velocity Trade may result in the total loss of the amount you deposited with QUICKTRADE plus you may be liable for further losses.
You are exposed to the full Transaction Value of the position at all times. Should the underlying instrument on which you are holding a position reduce in value to zero you will be liable for the full Transaction Value which can be substantially larger than the margin amount.
(g) It is impossible to predict how the value of an underlying instrument may move in the future. Historic levels do not indicate future levels. For example, in the case of a Margin FX Transaction, prices of currencies are highly volatile and can fluctuate suddenly over wide ranges due to unforeseen events or changes in market conditions. It is impossible to predict whether it will be economically beneficial to you to enter into a Transaction with QUICKTRADE.
(h) You must ensure you fully understand each Transaction you enter into with QUICKTRADE, the risks associated with the Transaction and your risk profile.
Markets are subject to many influences which may result in rapid fluctuations and reflect unforeseen events or changes in conditions with the inevitable consequence being market volatility.
Given the potential levels of volatility in the financial markets, it is therefore recommended that you closely monitor your positions with QUICKTRADE at all times.
In certain market conditions such as during times of price volatility in markets, quotes provided by QUICKTRADE may ‘gap’. A gap means that a price may unexpectedly jump from one price level to another without trading at rates in between those two price levels or quotes. It is not possible for us to predict when a price ‘gap’ will occur or by how much. Price gaps are generally a result of unexpected news or previously unknown data being released (e.g. news of terrorist attacks, revaluation of a currency, geopolitical upheaval or natural disasters).
In such an event QUICKTRADE reserves the right to make cash adjustments where there have been losses incurred by us as a result of an order you have active on the Trading Platform.
Given you are dealing with us as a counterparty to every transaction, you will have an exposure to us in relation to each transaction. In all cases, you are reliant on our ability to meet our obligations to you under the terms of each transaction. This risk is sometimes described as counterparty risk.
Obligation to Actively Monitor Your Transactions
You are responsible for actively monitoring and managing your transactions at all times meeting your obligations including ensuring that you meet your Margin Requirement and maintain the minimum required Free Margin. QUICKTRADE is under no obligation to contact you in the event of any change to the Margin Requirement or minimum required Free Margin or any actual or potential shortfalls in your Account.
Failure to maintain the required level of Margin Requirement and maintain the minimum required Free Margin, may result in some or all of your open transactions, without prior notice to you, being closed out by QUICKTRADE and the resulting realised loss (or profit) debited (or credited) to your Account.
The terms of a particular transaction may not be a perfect hedge against a particular type of risk or exposure where you are using a margin based product as a risk management tool. Even small differences between the terms of the transaction and the underlying asset, liability or position to which the transaction relates may create a basis risk.
QUICKTRADE relies on a number of technology solutions to provide you with its online Trading Platforms. Trading on a QUICKTRADE Trading Platform may differ from trading on other electronic trading systems.
A disruption to the QUICKTRADE Trading Platforms may mean you are unable to trade in products offered by QUICKTRADE when you wish and you may suffer a financial loss or opportunity loss as a result.
During a disruption of a QUICKTRADE Trading Platform, it may be possible for you to continue to use our financial products by contacting us over the phone; however this will not be possible in every case.
There are significant risks associated with using and relying on a web- based, electronic trading platform. Such risks include, but are not limited to, risks related to the use of software and/or telecommunications systems such as software errors and bugs, delays in telecommunications systems, interrupted service, data supply errors, faults or inaccuracies and security breaches.
These risks and the occurrence of disruptive events are outside the control of QUICKTRADE and, accordingly, you will have no recourse against QUICKTRADE in relation to the use of or availability of our Trading Platforms or any errors in the software and/or related information systems.
There are important provisions regarding the use of the Trading Platforms contained in the Client Agreement.
You must ensure that you fully understand these provisions and the risks involved in relying on an on-line, electronic trading system and the limitations in the service that QUICKTRADE can provide in relation to the Trading Platforms.
Trading Platform Closed
Due to the dynamic nature of the financial markets, it is possible that the value of your open positions will change while the trading function of one or more of our Trading Platforms is unavailable. In this case, you will not be able to trade in a product such as open a new transaction or close out an open transaction until the trading function of the trading platform is available again. You may suffer a financial loss or opportunity loss as a result.
Transactions are not transferable by you
As each transaction you enter into with us is a transaction between you and QUICKTRADE and is not traded on an exchange or market, you will not be able to sell, transfer or assign the transaction to any other person. QUICKTRADE may at its discretion assign or transfer its interest in the transaction to any other person.
Abnormal Market Conditions or Force Majeure
QUICKTRADE reserves the right to close out some or all of your open transactions between you and QuickTrade if an event occurs that is beyond your or our control, where such event either wholly or partially prevents, hinders, obstructs, delays or interferes with your ability to meet your obligations under the Client Agreement.
Discretionary Powers of QUICKTRADE
Under the Client Agreement, QUICKTRADE has a number of discretionary powers which may affect your trading activities. These powers are set out in this Risk Disclosure Statement as well as the Client Agreement and you should ensure that you fully understand them.
Exchange rate risk
While any Margin FX Transaction will always carry exchange rate risk, so may certain CFD Transactions.
Your amount of profit or loss from a CFD relating to an underlying instrument traded on a foreign market or denominated in a foreign currency can be affected by fluctuations in foreign exchange rates (in addition to fluctuations in the price of the relevant underlying instrument). In such circumstances, you may suffer loss due to unfavourable movements in a relevant foreign exchange rate, notwithstanding that the price of the underlying instrument to which your CFD relates remains unchanged.