1. Trading is very speculative and risky
Trading CFDs and FX Contracts is highly speculative, involves a significant risk of loss and is not suitable for all investors but only for those customers who:
2. Under this Agreement:
- understand and are willing to assume the economic, legal and other risks involved;
- Are experienced and knowledgeable about trading in derivatives and in underlying asset types; and
- Are financially able to assume losses significantly in excess of margin or deposits because investors
may lose the total value of the contract not just the margin or the deposit.
1. Risks related to long CFD positions, i.e. for purchasers of CFDs
Being long in CFD means you are buying the CFDs on the market by speculating that the market price of the underlying
will rise between the time of the purchase and sale. As owner of a long position, you will generally make a profit if the
market price of the underlying rises whilst your CFD long position is open. On the contrary, you will generally suffer
a loss, if the market price of the underlying falls whilst your CFD long position is open. Your potential loss may therefore
be bigger than the initial margin deposited. In addition, you might suffer a loss due to the closure of your position,
in case you do not have enough liquidity for the margin on your account in order to maintain your position open.
3. Risks related to short CFD positions, i.e. for sellers of CFDs
Being short in CFD means you are selling the CFDs on the market by speculating that the market price of the underlying will fall between the time of the purchase and sale. As owner of a short position, you will generally make a profit if the market price of the underlying falls whilst your CFD short position is open. On the contrary, you will generally suffer a loss, if the market price of the underlying rises whilst your CFD short position is open.
Your potential loss may therefore be bigger than the initial margin deposited. In addition, you might suffer a loss due to the closure of your position, in case you do not have enough liquidity for the margin on your account in order to maintain your position open.