Online Trading Risks
This risk warning notice (the “Risk Warning Notice”) cannot and does not disclose all of the risks of trading in foreign exchange (“Forex”), contracts for difference (“CFDs”) and Binary Options (“BOPs”). The purpose of this notice is to describe the major risks of trading Forex, CFDs and BOPs.
You should not engage in speculative Forex, CFD and BOP trading unless you understand the basic aspects of such trading and its risks – for example, how positions are opened and closed, how profits and losses are made, how eBrokerhouse makes BOPs available for you and the extent of your exposure to risk and loss.
Trading in Forex, CFDs and BOPs is speculative and involves a high degree of risk. In particular because it will be conducted using margin (which covers only a small percentage of the value of the foreign currency traded), price changes in Forex, CFD and BOP transacions can result in significant losses. You should be aware that by trading with CFDs, spot forex and BOPs you may lose the margin held at eBrokerhouse Ltd. that serves for the purposes of collateral for opening and maintaining your trading positions.
Therefore, trading in these contracts with respect to CFDs, spot forex and BOPs is appropriate only for persons who (a) understand and are willing to assume the economic, legal and other risks involved in such transactions, and (b) are financially able to withstand losses of their initial margin funds and any additional funds transferred to eBrokerhouse Ltd. to maintain their positions.
You should be satisfied that spot forex, CFD and BOP trading is suitable for you in the light of your financial circumstances and attitude to risk. If you are in any doubt as to whether spot forex, CFD and BOP trading is suitable for you, please seek independent advice from a financial services professional. eBrokerhouse Ltd. does not provide such advice.
When you engage in CFD, spot forex and BOP trading you are placing a trade in relation to movements of prices set by eBrokerhouse Ltd.. Prices quoted to you by eBrokerhouse Ltd. will include a spread, mark-up, or mark-down when compared to prices that eBrokerhouse Ltd. may receive or expect to receive if it were to cover transactions with you by a trade in the interbank market or with another counterparty. Although dealing spreads are common in the foreign exchange markets, the total impact of spreads may be significant in relation to the size of the margin you post and may make it more difficult for you to realise a profit from your trading. In addition, in connection with the automatic rolling forward of forex transactions that you do not close out, eBrokerhouse Ltd. will impose an interest charge. You should carefully consider the effect of such interest charges along with spreads, mark-ups, or mark-downs on your ability to profit from trading.
The “gearing” or “leverage” available in CFD and spot forex trading (i.e. the funds eBrokerhouse Ltd. requires you to provide when a position is opened compared to the notional size of trade you can enter into) means that a small margin deposit can lead to large losses as well as gains. It also means that a relatively small movement can lead to a proportionately much larger movement in the size of any loss or profit which can work against you as well as for you.
You may lose all amounts you deposit with eBrokerhouse Ltd. as margin. The placing of certain orders (e.g. “stop-loss” or “limit” orders) that are intended to limit losses to certain amounts in the case of trading spot forex and/or CFD may not always be effective because market conditions or technological limitations may make it impossible to execute such orders. Please also note that for all orders (including guaranteed stop loss orders) you may sustain the loss (which your order is intended to limit) in a short period of time.
You have to pay to eBrokerhouse Ltd. all losses you sustain as well as all other amounts payable under the terms and conditions for trading Forex, CFDs and BOPs such as interest. If you decide to engage in Forex, CFD and BOP trading, you must accept this degree of risk.
Forex, CFDs and BOPs trades are not traded under the rules of a recognised or designated investment exchange. Consequently, engaging in Forex and/or CFDs and/or BOPs trading may expose you to substantially greater risks than investments which are so traded.
eBrokerhouse publishes on the website investment analysises for its clients and for potential clients defined under the terms of General Terms of Business. This service is not qualified as investment adivsory and eBrokerhouse may not be liable for any damage of the client if the client acted in line with content of the analysis. The valadity and effectiveness of the strategy based on these analysises may change during volatile periods of the financial markets. You shall consider this fact if you follow these analyises.The potential for profit or loss from transactions on foreign markets or in foreign denominated contracts are affected by fluctuations in foreign exchange rates. Transactions involving foreign currencies, including Forex, CFDs and BOPs trading, involve risks not present when dealing with investments denominated entirely in your domestic currency. Such enhanced risks include (but are not limited to) the risks of political or economic policy changes in a foreign nation, which may substantially and permanently alter the conditions, terms, marketability or price of a foreign currency. The profit or loss in transactions in foreign currency-denominated contracts (whether they are traded in your own or another jurisdiction) will also be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the contract to another currency. The abovementioned risks feature the spot forex, the CFD, and the BOP transactions (including but not limited to: commodity and index based CFD instruments) therefore you should take them into account in all cases.
You can only engage in Forex, CFD and BOP trading with eBrokerhouse Ltd. in currencies eBrokerhouse Ltd. makes available. eBrokerhouse Ltd. does not undertake to continue to publish all such currencies. The markets eBrokerhouse Ltd. publish (and its prices) are derived from underlying prices quoted on the Forex interbank market and on the relevant Financial Market relating to CFD instruments. eBrokerhouse Ltd. has no control over movements in the underlying prices which may be volatile and unpredictable. Those movements will affect eBrokerhouse Ltd.’s prices, whether or not you can open and close a position and the price at which you can do so.
eBrokerhouse Ltd. does not act as market maker and/or principal to any foreign currency contracts executed by you. Thus, eBrokerhouse Ltd is not required to continue to make any foreign currency or any transaction available and may refuse to accept any order at its absolute discretion. During periods of market volatility, it may be difficult or impossible for you to liquidate an existing position, to assess the value of open positions, to determine a fair price or to assess the exposure to risk. These are among the reasons why transactions in Forex, CFD and BOP transactions involve increased risks. Since Forex, CFD and BOP trading with eBrokerhouse Ltd. is not conducted on a regulated exchange, there is no clearing house or other central counterparty which guarantees our payment obligations to you under contracts that you enter into. You can only look to eBrokerhouse Ltd. for performance on all Forex, CFDs and BOPs you enter into with us and for a return of any margin. The insolvency or default of eBrokerhouse Ltd. and/or its counterparty can cause you to lose the value of all positions carried in your Account with eBrokerhouse Ltd. and can cause you to suffer additional losses from open positions.
eBrokerhouse Ltd. may have access to information that is not available to you, may have acquired trading positions at prices that are not available to you, and may have interests different from your interests. eBrokerhouse Ltd. does not undertake any obligation to provide you with market or other information we possess, nor to alter or refrain from our own trading.
If there is anything you do not understand, please contact our Account Support Team on