Full Risk Disclosure
The following
statement is furnished pursuant to Commodity Futures Trading Commission
(“CFTC”) Regulation 1.55(c).This brief statement does not disclose all
of the risks and other significant aspects of trading in futures, forex
and options. In light of the risks, you should undertake such
transactions only if you understand the nature of the contracts (and
contractual relationships) into which you are entering and the extent of
your exposure to risk. Trading in futures, forex and options is not
suitable for many members of the public. You should carefully consider
whether trading is appropriate for you in light of your experience,
objectives, financial resources and other relevant circumstances.
The risk of
loss in trading commodity futures contracts and foreign currency can be
substantial. You should, therefore, carefully consider whether such
trading is suitable for you in light of your circumstances and financial
resources. You should be aware of the following points:
- You may sustain a total loss of the funds that you deposit with
your broker to establish or maintain a position in the commodity
futures market or foreign exchange market, and you may incur losses
beyond these amounts. If the market moves against your position, you may
be called upon by your broker to deposit a substantial amount of
additional margin funds, on short notice, in order to maintain your
position. If you do not provide the required funds within the time
required by your broker, your position may be liquidated at a loss, and
you will be liable for any resulting deficit in your account.
- The funds you deposit with a futures commission merchant for
trading futures and forex positions are not protected by insurance in
the event of the bankruptcy or insolvency of the futures commission
merchant, or in the event your funds are misappropriated.
- The funds you deposit with a futures commission merchant for
trading futures or forex positions are not protected by the Securities
Investor Protection Corporation even if the futures commission merchant
is registered with the Securities and Exchange Commission as a broker or
dealer.
- The funds you deposit with a futures commission merchant are
generally not guaranteed or insured by a derivatives clearing
organization in the event of the bankruptcy or insolvency of the futures
commission merchant, or if the futures commission merchant is otherwise
unable to refund your funds. Certain derivatives clearing
organizations, however, may have programs that provide limited insurance
to customers. You should inquire of your futures commission merchant
whether your funds will be insured by a derivatives clearing
organization and you should understand the benefits and limitations of
such insurance programs.
- The funds you deposit with a futures commission merchant are
not held by the futures commission merchant in a separate account for
your individual benefit. Futures commission merchants commingle the
funds received from customers in one or more accounts and you may be
exposed to losses incurred by other customers if the futures commission
merchant does not have sufficient capital to cover such other customers’
trading losses.
- The funds you deposit with a futures commission merchant may be
invested by the futures commission merchant in certain types of
financial instruments that have been approved by the Commission for the
purpose of such investments. Permitted investments are listed in
Commission Regulation 1.25 and include: U.S. government securities;
municipal securities; money market mutual funds; and certain corporate
notes and bonds. The futures commission merchant may retain the interest
and other earnings realized from its investment of customer funds. You
should be familiar with the types of financial instruments that a
futures commission merchant may invest customer funds in.
- Futures commission merchants are permitted to deposit customer
funds with affiliated entities, such as affiliated banks, securities
brokers or dealers, or foreign brokers. You should inquire as to whether
your futures commission merchant deposits funds with affiliates and
assess whether such deposits by the futures commission merchant with its
affiliates increases the risks to your funds.
- You should consult your futures commission merchant concerning
the nature of the protections available to safeguard funds or property
deposited for your account.
- Under certain market conditions, you may find it difficult or
impossible to liquidate a position. This can occur, for example, when
the market reaches a daily price fluctuation limit (“limit move”).
- All futures, forex and options positions involve risk, and a
“spread” position may not be less risky than an outright “long” or
“short” position.
- The high degree of leverage (gearing) that is often obtainable
in futures and forex trading because of the small margin requirements
can work against you as well as for you. Leverage (gearing) can lead to
large losses as well as gains.
- In addition to the risks noted in the paragraphs enumerated
above, you should be familiar with the futures commission merchant you
select to entrust your funds for trading futures positions. As of July
12, 2014, the Commodity Futures Trading Commission requires each futures
commission merchant to make publicly available on its Web site firm
specific disclosures and financial information to assist you with your
assessment and selection of a futures commission merchant. Information
regarding this futures commission merchant may be obtained by visiting
the websites of the respective FCM partner of NinjaTrader Brokerage:
Dorman Trading (
www.dormantrading.com), Phillip Capital
(
www.phillipcapital.com), FXCM (www.fxcm.com)
ALL OF THE
POINTS NOTED ABOVE APPLY TO ALL FUTURES AND FOREX TRADING WHETHER
FOREIGN OR DOMESTIC. IN ADDITION, IF YOU ARE CONTEMPLATING TRADING
FOREIGN FUTURES OR OPTIONS CONTRACTS, YOU SHOULD BE AWARE OF THE
FOLLOWING ADDITIONAL RISKS:
- Foreign futures transactions involve executing and clearing
trades on a foreign exchange. This is the case even if the foreign
exchange is formally “linked” to a domestic exchange, whereby a trade
executed on one exchange liquidates or establishes a position on the
other exchange. No domestic organization regulates the activities of a
foreign exchange, including the execution, delivery, and clearing of
transactions on such an exchange, and no domestic regulator has the
power to compel enforcement of the rules of the foreign exchange or the
laws of the foreign country. Moreover, such laws or regulations will
vary depending on the foreign country in which the transaction occurs.
For these reasons, customers who trade on foreign exchanges may not be
afforded certain of the protections which apply to domestic
transactions, including the right to use domestic alternative dispute
resolution procedures. In particular, funds received from customers to
margin foreign futures transactions may not be provided the same
protections as funds received to margin futures transactions on domestic
exchanges. Before you trade, you should familiarize yourself with the
foreign rules which will apply to your particular transaction.
- Finally, you should be aware that the price of any foreign
futures or option contract and, therefore, the potential profit and loss
resulting therefrom, may be affected by any fluctuation in the foreign
exchange rate between the time the order is placed and the foreign
futures contract is liquidated or the foreign option contract is
liquidated or exercised.
THIS BRIEF STATEMENT CANNOT, OF COURSE, DISCLOSE ALL THE RISKS AND OTHER ASPECTS OF THE COMMODITY AND FOREIGN CURRENCY MARKETS.
