This notice is provided to you as per the provisions of the relevant legislation and in accordance with Law 87(I)/ 2017 governing Forextime Limited (the Company).
Some Instruments trade within wide intraday ranges with volatile price movements. Therefore, the Client must carefully consider that there is a high risk of loss as well as profit. The price of Derivative financial instruments is derived from the price of the underlying asset in which the instruments refer to (for example currency, stock, metals, indices, etc.). Derivative financial instruments and related markets can be highly volatile. The prices of instruments and the underlying asset may fluctuate rapidly, over wide ranges, and may reflect unforeseeable events or changes in conditions, none of which can be controlled by the Client or the Company. Under certain market conditions it may be impossible for a Client's order to be executed at a declared price, leading to losses. The prices of instruments and the underlying asset will be influenced by, amongst other things, changing supply and demand relationships, governmental, agricultural, commercial and trade programs and policies, national and international political and economic events and the prevailing psychological characteristics of the relevant market place. Therefore, a Stop Loss order cannot guarantee the limit of loss.
The Client acknowledges and accepts that, regardless of any information which may be offered by the Company, the value of Instruments may fluctuate downwards or upwards and it is even a possibility that the investment may diminish to no value. This is owed to the margining system applicable to such trades, which generally involves a comparatively modest deposit or margin in terms of the overall contract value. A relatively small movement in the underlying market can have a disproportionately dramatic effect on the Client's trade. If the underlying market movement is in the Client's favour, the Client may achieve a good profit, but an equally small adverse market movement can not only quickly result in the loss of the Clients' entire deposit, but may also expose the Client to a large additional loss.
At this point it is significant to refer to Slippage which usually happens during periods of high volatility - This is when a trader has executed an order at a price which is different to the price they expected the trade to be executed at. There are two kinds of slippage, positive and negative. Positive slippage occurs when the price is executed at a better level than the one requested; a negative slippage is exactly the opposite situation, therefore the Client should consider the possible risks and/or hazardous situation that they might be placed in. Slippage can occur in all account and order types offered, and under all execution methods.
Please be informed that in case a slippage is experienced in the market, the orders will be executed at the next available price, in cases of market execution. Instant Execution requotes, (i.e. if the requested price is not available, the current available price will be sent to the Client to confirm execution, and the Client must explicitly agree to accept the requoted price, prior to execution) occur when entering or exiting the market in Standard and Cent account.
Shares are bought and sold on stock exchanges and their values can go down. In respect of shares in smaller companies, there is an extra risk of losing money when such shares are bought or sold. There can be a big difference between the buying and selling price of these shares.
If they have to be sold immediately, the Clients may get back much less than they paid for them. Shares in companies incorporated in emerging markets may be harder to buy and sell than those shares in companies in more developed markets and such companies may also not be regulated as strictly.
All Equities offered are listed on an exchange, which means that the prices are not set by the Company. The Company will act on any instruction that the Client provides to buy or sell an instrument on his/her behalf in accordance with the Company’s obligation to provide best execution as set out in the order execution policy, to act reasonably and in accordance with the applicable Client Agreement and other Operative Agreements.
The Company may place the Clients instructions to deal outside of an exchange if this is in line with the order execution policy.
The Company will arrange for the custody of the Clients instruments.
All equities purchased for the Client or transferred to the Company by the Client, will be purchased in the name of the nominee company or FXTM, and/or held by a nominee company selected by FXTM, for the benefit of the Client.
As investments will be held in the name of a nominee company, the Client may not have voting rights which he/she would have had if he/she held the investment in his/her own name.
All financial investments involve an element of risk. The value of any investment the Client makes through may fall as well as rise and the Client may get back less than his/her initial investment. Past performance is not an indication of future performance.
The risks that the Clients are exposed to will vary according to the instruments they instruct the Company to buy and sell on their behalf.
The Clients should be aware that physical shares admitted to trading on a regulated market are not high risk financial products.
The Company’s services are provided on an execution only basis. The Company does not provide investment advice in relation to Equities. The Company might provide factual information or research recommendations about a market, information about transaction procedures and information about the potential risks involved and how those risks may be minimized. However, any decision to use the products or services is made by the Client.
Collateral risks (professional/elective professionals only)
When Clients enter into the Collateral Agreement with the Company, it is agreed to take security over the assets in the Share Account in place of cash for payment of margin on their linked CFD Account. The value of shares and CFDs will rise and fall. If the collateral value of the assets in Clients Share Account, together with any cash on Client’s linked CFD Account, falls below the amount required to maintain the open positions, Client may be closed out of the CFD positions on that linked account, and the Company will have the right to sell the assets in the Client’s Share Account in order to pay for any resulting deficit.
As the value of the assets in the Clients Share Account ﬂuctuates the value of the collateral that the Client can utilise as margin will also ﬂuctuate. The Client will need to monitor his/her Share Account and the linked CFD Account to ensure that the collateral value and any cash he/she has deposited on his/her linked CFD Account is sufficient to fund his/her open positions on that account.
The Client will only be able to use his/her collateral services to cover margin requirements on open positions on his/her linked CFD Account and he/she will need to cover any running losses using the available cash in his/her linked CFD Account.
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 will not necessarily limit losses to the intended amounts, because market conditions may make it impossible to execute such an Order at the stipulated price. In addition, under certain market conditions the execution of a Stop Loss Order may be worse than its stipulated price and the realized losses can be larger than expected.
The Company’s price for a given CFD is calculated by reference to the price of the relevant underlying asset, which the Company obtains from third party external reference sources. The Company’s prices can be found on the Company’s website. If the price reaches an order such as: Stop Loss, Take Profit, Buy Limit, Buy Stop, Sell Limit, Sell Stop- these orders will be closed. But under certain trading conditions it may be impossible to execute orders (Stop Loss, Take Profit, Buy Limit, Buy Stop, Sell Limit, Sell Stop) at the declared Clients’ price. Therefore, these orders may not always limit Client losses in the event of highly volatile trading conditions, for example, in an underlying asset or reference price. In this case the Company has the right to execute the order at the first available price. This may occur, as already stated, 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. This may also occur at the opening of a trading session. The minimum level for placing Stop Loss, Take Profit, Buy Limit, Buy Stop, Sell Limit and Sell Stop orders, for a given CFD, is specified under Contract Specifications on the main Website of the Company. In general, the Company places strong emphasis on the quality and level of the price data that the Company receives from external sources, in order to provide to the Clients with competitive price quotes. The Company does not however guarantee that its’ quoted prices will be at a price which is as good, or better, than one might have been available elsewhere.
This notice is provided to the Client in accordance with applicable legislation.
Position Risk: It refers to the probability of loss associated with a particular trading (long or short) position due to price changes.
Interest Rate Risk: The risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
Commodities Risk: It refers to the uncertainties of future market values and of the size of the future income, caused by the fluctuation in the prices of commodities. These commodities may be oil, metals, gas, electricity etc.
Foreign Exchange Risk: It is a financial risk that exists when a financial transaction is denominated in a currency other than the base currency of the Company. The foreign exchange risk in the Company is effectively managed by the establishment and control of foreign exchange limits, such as through the establishment of maximum value of exposure to a particular currency pair as well as through the utilization of sensitivity analysis.
Currency Risk: If Clients trade in a market denominated in a currency other than their base currency, currency exchange ﬂuctuations will impact their profits and losses.
Liquidity Risk: Under certain market 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.