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Risk Disclosure Statement
THE RISK OF LOSS IN TRADING COMMODITY FUTURES CONTRACTS 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:
(1) 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, 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.
(2) 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").
(3) Placing contingent orders, such
as "stop loss" or "stop limit" orders, will not necessarily limit your
losses to the intended amounts, since market conditions on the exchange where the order is
placed may make it impossible to execute such orders.
(4) All futures positions involve
risk, and a "spread" position may not be less risky than an outright
"long" or "short" position.
(5) The high degree of leverage
(gearing) that is often obtainable in futures 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.
(6) You should consult your broker
concerning the nature of the protection available to safeguard funds or property deposited
for your account.
THIS BRIEF STATEMENT CANNOT, OF COURSE, DISCLOSE ALL THE RISKS AND OTHER ASPECTS OF THE COMMODITY MARKETS. |
