CFDs involve a significant risk of loss of all the invested capital, are highly speculative and are not suitable for all investors. The Risk Disclosure should be read in conjunction with our Terms and Conditions in order to help the Clients understand the risks that might arise when trading CFDs. However, it should be noted that it is impossible for this Disclosure to contain all the risks and aspects involved in trading CFDs. In addition, it should be stressed that the Company does not provide investment advice. Therefore, the Clients should take into consideration the following before taking the decision to trade with CFDs.
CFDs are suitable only for Clients who understand and are willing to assume the economic, legal and other risks involved and are financially able to assume losses. In addition, CFDs are suitable only for Clients who have experience and knowledge in taking risks involved in the acquisition and trade of financial contracts. The maximum loss that may be incurred by any trader is the amount of money paid by him/her to the Company, including rolling fees (if applicable in the account type) for all deals.
None of the financial contracts offered on the Company’s website can be considered as a safe trade due to the high volatility of the International currency prices and the spread that the Liquidity Provider(s) adds to all calculations and quotes.
The Company’s Liquidity Provider is responsible to calculate and provide to the Company the price to be paid for financial contracts traded on the Company’s website at the time the financial contract is purchased or sold. This calculation is based on the availability of market information and a complex arithmetic calculation derived from best estimates of market prices, the expected level of interest rates, implied volatility and other market conditions. Leverage is also a significant factor that should be taken into account. One of the main characteristics of leverage is that the relatively insignificant fluctuations of the underlying assets’ prices can lead to multiple profits or losses.
Rollover Risk: Rollover occurs when a currency position is held open overnight. The Clients may earn rollover or pay rollover, but it depends on the interest rate differential between the two currencies. In addition, rollover can add a significant extra cost or profit to the transaction, depending on the volume of the transaction.
The Clients have the option to put on Stop Loss Orders which, subject to market conditions, can be executed by two ways; may the Client choose the exact exchange rate on which the order shall be executed, in which case the amount is calculated automatically, or the Client may choose the exact maximum amount of loss to be incurred, in which case the exchange rate will be calculated accordingly. Such a transaction shall be executed by the Client as soon as they find the distinctive (“indicative”) exchange rate on the electronic trading platform that, including the Company’s spread, is identical to the order given by the Client or indicates a loss identical with the maximum amount of loss declared by the Client.
Liquidity Risk: Liquidity risk arises from situations in which an investor interested in trading security cannot do it because nobody in the market wants to trade that security. In other words, it is the inability to find buyers on the desired terms.
More particularly, the CFD’s prices offered on the Company’s electronic trading platform may differ substantially from the prices of the relevant underlying instruments, which the Company obtains from third party liquidity providers. It is important to note that the Company does not provide a market amongst or between traders. Each CFD purchased by a Client via the Company’s Website is an individual Agreement made between that Client and the Company’s Liquidity Provider and is not transferable, negotiable or assignable to or with any third party.
Counterparty Risk: When trading CFDs, the Client is effectively entering into an over-the counter (‘OTC’) transaction which indicates that the position opened with the Company cannot be closed with any other entity. OTC transactions may involve greater risk compared to transactions occurring on regulated markets due to the fact that in OTC transactions there is no central counterparty and either party to the transaction bears the risk.
Slippage is the difference between the expected price and the execution price for a particular transaction. When slippage occurs the Client gets a different rate than expected between the time he enters the trade and the time the trade is made.
Slippage does not directly refer to a negative or positive movement, as any change between the expected and actual prices can qualify. If the execution price is better than the price requested by the Client this is referred to as ‘positive slippage’. In contrast, if the execution price is worse than the price requested by the Client this is referred to as ‘negative slippage’.
Clients should be aware of the fact that slippage is more likely to occur when there is low liquidity or high due to news announcements or economic events and therefore their order cannot be executed at the desired price.
It should be taken into consideration that during abnormal market conditions the Company might be unable to execute your instructions at the requested price. This may occur, for example, at the following cases:
- During market opening times,
- During economic announcements and political events ,
- During volatile periods where there is a 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,
- If there is insufficient liquidity for the execution of the specific volume at the declared price.
All the Clients should bear in mind that the Company makes available to them a significant range of financial information. This includes, but is not limited to, financial market data, quotes, trading signals, news, analyst opinions and research reports, graphs or data. It should be noted that this financial information is considered to be marketing communication only and does not contain investment advice or investment recommendation. The Company makes no representation and assumes no liability as to the accuracy, timeliness or completeness of the information provided, nor any loss arising from any investment based on a recommendation or other information supplied by any employee of the Company, a third party or otherwise. Market Information may quickly become unreliable for various reasons including, for example, changes in market conditions or economic circumstances.