Risk Disclosure Notice

The high degree of "gearing" or "leverage" is a particular feature of this type of transaction. This stems from the margining system applicable to such trades that generally involves a comparatively modest deposit or initial margin in terms of the overall contract value, so that a relatively small movement in the underlying market can have a disproportionately dramatic effect on your trade. If the underlying market movement is in your favour, you may achieve a good profit, but an equally small adverse market movement can not only quickly result in the loss of your entire deposit, but may also expose you to a large additional loss unless you enter into a limited liability contract with the firm.

If you deal on a credit basis, which may amongst other payments cover the initial margin requirements, the extent of your agreed credit facility does not limit your loss or financial liability and you can be subject to variation margin calls for an amount in excess of your facility. As a consequence the amount of capital that you are prepared to place at risk should be sufficient to cover your credit allocation and the possibility of subsequent variation margin calls, which will only be made once your credit allocation has been exceeded.

You may be called upon to deposit substantial additional variation margin, at short notice, to maintain your trade. If you do not provide such additional funds within the time required, your trade may be closed at a loss and you will be liable for any resulting deficit.

Such transactions will not be undertaken on a recognised or designated investment exchange and, accordingly, they may expose you to greater risks than exchange transactions. The trading structure and trading rules will be established solely by the bookmaker. For example, if you wish to close the trade earlier than the time at which it would otherwise automatically expire you will have to close it at your bookmaker's quotation which may reflect the premium or discount of the "underlying market". When the underlying market is closed your bookmaker's quotation can be influenced by the weight of other clients buying or selling with your bookmaker. You will have to close any trade with the same bookmaker with whom it was originally entered into.

Where entering into such transactions, your bookmaker must do so under a two-way customer agreement. You should satisfy yourself that dealing is conducted throughout in strict conformity with that customer agreement.

Prior to placing any trades, you should receive from your bookmaker written confirmation of all transaction or other charges for which you will be liable.

A limited liability transaction limits the extent of your liability for loss in a transaction to an amount agreed by you prior to entering into such transaction, but you may sustain such loss in a relatively short time. You should take particular note of this aspect as specified in the terms and conditions of your bookmaker. In particular, you should check whether the limited liability is only guaranteed during normal business hours. You are likely to incur additional costs in this type of transaction and you should obtain from your bookmaker an explanation of these, if they are applicable. Such additional costs may take the form of a specific additional charge, or could be a "hidden cost" because the prices or spread on which these trades are based differ from those applicable to other trades that do not have limited liability.

Your bookmaker is prohibited from providing you with investment advice relating to investments or possible transactions in investments or from making investment recommendations of any kind. This prohibition is subject to an exception where advice given amounts to the giving of factual market information or information in relation to a transaction about which you have enquired, as to transaction procedures, potential risks involved and how those risks may be minimised.

Your bookmaker holds your money in segregated trust accounts but this may not afford complete protection.

If you deposit collateral as security with your bookmaker, you should ascertain from your bookmaker how your collateral will be dealt with.