I – Introduction
This document is a disclosure by GCC Brokers Limited (the “Company”) of the potential risks involved in trading on financial markets. However, due to the wide range of possible scenarios, this brief statement does not disclose all of the risks involved in trading spot foreign exchange, spot metals and other off-exchange derivative contracts. Client should undertake such transactions only if it understands the nature of the financial markets and products offered, and the extent of the Client’s exposure to risk. Trading in these instruments is not suitable for many members of the public. Client should carefully consider whether trading is appropriate for Client in light of its experience, objectives, financial resources, and relevant circumstances.
II – Effect of “Leverage”
Transactions in CFDs and other off-exchange derivative contracts carry a high degree of risk. The amount of initial margin is small relative to the value of the contract, so even small market movements may have great impact on a client’s trading account due to the effect of leverage. The client shall hold full responsibility for all risks, financial resources used and the chosen trading strategy.
A relatively small market movement will have a proportionately larger impact on the funds lodged by the Client. This may work against you as well as for the Client. 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, you may be called upon to pay substantial additional funds on short notice to maintain your position. If you fail to comply with a request for additional funds within the time prescribed, your position may be liquidated at a loss and you will be liable for any resulting deficit.
III – Highly Volatile Instruments
Many instruments are traded within wide ranges of intraday price movements so the client must carefully consider the fact that there is not only high probability of profit, but also of loss.
IV – Liquidity
Some of the underlying assets may not become immediately liquid as a result of reduced demand for the underlying asset and the client may not be able to obtain the information on the value of these or the extent of the associated risks.
V – Risk Reducing Strategies
Placing of certain orders (e.g., ‘stop-loss’ or ‘stop-limit’ orders) that are intended to limit losses may not always be effective due to hectic market conditions or technological limitations that may make it impossible to execute such orders. Strategies using combinations of positions, such as hedging strategies, may be as risky as taking ‘long’ or ‘short’ vanilla positions.
VI – Electronic Trading & Technical Risk
When executing trading operations through the client terminal, the Client shall assume the risk of financial loss, which can be caused by the failure of Client hardware, software and internet connection, and/or the improper operation of Client equipment, and/or the wrong settings in the client terminal, and/or delayed client terminal update, and/or the Client’s ignorance of the applicable rules described in the trading platform User Guide.
In case of system failure or other interruption, orders may not be executed according to Client’s instructions or Client may not be able to place or change orders. The Company shall not be liable for any such failure of hardware or software, system downtime or communications interruption. Further, the Company does not warrant that Client will be able to maintain a continuous and uninterrupted link with the internet and shall have no liability for any such failure.
VII – Abnormal Market Conditions
Under abnormal market conditions, the execution time for Client instructions may increase.
The markets are generally closed for trading during week-ends when various news events and developments may arise causing the markets to open at a significantly different price from where they closed on Friday. Clients will not be able to use the online trading software to place orders when the markets are closed. There is a substantial risk when no stop-loss orders are left to protect open positions held over weekends, especially when the markets open at levels significantly worse than their specified price.
Force Majeure Events
The Company is not responsible for financial losses arising from force majeure events. These events are extreme and irresistible circumstances that are independent of the will and actions of the agreement participants, that cannot be foreseen, prevented, or eliminated, including but not limited to natural disasters, fires, man-made accidents and disasters, emergencies at utility works and on utility lines, DDOS attacks, riots, military actions, terrorist attacks, uprisings, civil unrest, strikes, and the regulatory acts of state- and local government authorities.