Risk Disclosure

Risk Disclosure Statement

In addition to standard industry disclosures contained in this Agreement, you should be aware that margined currency trading is one of the riskiest forms of investment available in the financial markets and is only suitable for sophisticated individuals and institutions. An account with SHARON SECURITIES permits you to trade foreign currencies on a Highly leveraged basis (up to approximately 200 times your account equity or as otherwise permitted by applicable regulation). An initial deposit of $1,000 may enable the trader to take a maximum position with $100,000 notional market value. The funds in an account trading at maximum leverage can be completely lost, if the position(s) held in the account has a two percent swing in value. Given the possibility of losing an entire investment, speculation in the foreign exchange market should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well being.

If you have pursued only conservative forms of investment in the past, you may wish to study currency trading further before continuing an investment of this nature. You must realize that you could sustain a total loss of all funds you deposit as initial margin as well as substantial amounts of capital, when trading currencies or currency options, should the market go against your investment. You must also realize that the limited risk in buying options means you could lose the entire option investment should the option expire worthless. If you wish to continue with your investment, you acknowledge that the funds you have committed are purely risk capital and loss of your investment will not jeopardize your style of living nor will it detract from your future retirement program. Additionally, you fully understand the nature and risks of currency and currency options investments, and your obligations to others will not be neglected should you suffer investment losses.

Forex Trading Risk Disclosure

  1. Effect of “Leverage” or “Gearing”

    B & F Transactions carry a High degree of risk. The amount of Initial margin may be small relative to the value of the foreign currency so that transactions are ‘leveraged’ or ‘geared’. A relatively small market movement may have a proportionately larger impact on the funds you have deposited or will have to deposit: this may work against you as well as for you. You may sustain a total loss of initial margin funds and any additional funds deposited with the firm to maintain your position. If the market moves against your position or margin levels are increased, your position may be liquidated at a loss and you will be liable for any resulting deficit.
  2. Derivative markets are speculative and volatile

    Derivative markets can be highly volatile. The prices of CFDs and the underlying securities, currencies, commodities, financial instruments or indices may fluctuate rapidly and over wide ranges and in reflection of unforeseen events or changes in conditions, none of which can be controlled by you. The prices of CFDs will be influenced by unpredictable events including, 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 marketplace.
  3. Risk-reducing orders or strategies

    The placing of certain orders (e.g., “stop-loss” orders, where permitted under local law, or “stop-limit” orders) which are intended to limit losses to certain amounts may not be effective because market conditions may make it Impossible to execute such orders. Strategies using combinations of positions, such as “spread” and “straddle” positions, may be as risky as simple “long” or “short” positions.
  4. Your money is deposited in a separate trust account Any money that you deposit with us will be held separately from our money, in a trust account, and held and dealt with in accordance with the Governing Legislation and the Customer Agreement. As permitted under Governing Legislation, your money may be co-mingled into one or more trust accounts with our other customers’ money, which is also held on trust.
  5. Commission and other charges

    Before you begin to trade, you should obtain a clear explanation of all commission, fees and other charge for which you will be liable. These charges will affect your net profit (if any) or increase your loss.
  6. Advice

    We will not give you any personal financial product advice. Any general financial product advice that we may give you will have been prepared without taking into account your personal objectives, financial situation or needs. Accordingly, you should consider carefully trading with us and the appropriateness of any general advice having regard to your personal objectives, financial situation and needs, and obtain financial and legal advice before you open an account and trade with us. Nothing in this PDS should be taken to be a recommendation to trade in CFDs or trade in any particular share, stock, index, commodity or currency by way of CFDs, and any reference to a particular share, stock, index, commodity or currency is for illustration only. The Customer Agreement contains a provision by which you agree that you enter into all CFDs in reliance on your own judgment, and that we will not be liable for any losses, costs, expenses or damages suffered by you arising from any inaccuracy or mistake in any information we give to you in the absence of fraud, willful default or gross negligence or as required by legislation
  7. Currency risks

    The profit or loss in transactions in foreign currency (whether they are traded in your own or another jurisdiction) will be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the foreign currency position to another currency.
  8. Tax

    There is a risk that our understanding may be incorrect and/or that the tax treatment of these products may change. In the event that we are obliged to pay any tax in respect of your personal liability for CFDs undertaken with us, the Customer Agreement contains an indemnity that would allow us to recover such payments from you.
  9. Electronic trading

    Trading on an electronic trading system may differ not only from trading in an open-outcry market but also from trading on other electronic trading systems. If you undertake transactions on an electronic trading system, you will be exposed to risks associated with the system including the failure of hardware and software. The result of any system failure may be that your order is either not executed according to your instructions or is not executed at all.
  10. Acknowledgments

    By signing the Application Form you acknowledge to us that you:
    • have given consideration to your objectives, financial situation and needs and the risks of loss which accompany the prospects of profit associated with dealing in CFDs and have formed the opinion that dealing in CFDs is suitable for your purposes;
    • were advised by us to obtain independent tax and financial advice concerning this PDS, including the Customer Agreement;
    • Received and considered this PDS, including the Customer Agreement.

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.