In compliance with our regulatory requirements, this notice is provided to you because you are proposing to undertake dealings in margin traded products such as spread-betting, Contracts For Difference (CFDs) or Foreign Exchange with InterTrader Limited.
CFDs, spread betting and rolling spot forex are complex, high-risk financial products. These products pose the following risks:
- You are at risk of losing money rapidly, due to leverage.
- Your losses may exceed your deposits.
Most investors lose money on these products.
In addition to these risks you should be aware that:
- We may make a margin call requiring you to deposit further funds to cover open positions and if you fail to post additional margin we may close out your position without warning.
- Trading fees, commissions, or spreads will be based on the full investment exposure of your deposited funds. An additional fee will be applied for overnight financing arrangements to maintain your position. These charges will impact your financial return.
Margined trades (or bets in the case of spread betting) are trades on the price movement of a product. They settle based on the difference between the opening price and the closing price of the trade or bet. They can settle in a currency other than your base currency and therefore your profit or loss could be liable to foreign exchange fluctuations
The nature of these products carry a higher risk of loss than trading many traditional instruments. As such our products may not be suitable for everyone. You should not trade any margined product unless you fully understand all the risks involved with doing so and that you have sufficient resources available to you that in the event, however unlikely you may deem it to be, that there is an adverse movement in the price of that product that you can meet the financial obligations required by you with respect to margin payments and losses.
Margin trading is leveraged trading that allows ‘gearing’ which means that you can place a large trade or bet by only putting up a small amount of money as margin. If the price moves in your favour you can greatly increase your profits. However even a small movement in price against you can lead to substantial losses and you may be required to deposit additional margin with us immediately to keep these trades open.
Failure to do this could result in positions being closed. You are liable for this and for any losses that may occur if your positions are closed. The potential losses, or profits, for margin traded products are, or could be, unlimited and this should always be considered by you when making trading decisions. The speed at which profits and losses can be incurred for these instruments, due to their geared nature means that it is essential to monitor your positions closely.
InterTrader will hold retail customer funds in a segregated bank account. We reserve the right to utilise some of those funds up to the level that the client is losing to fund open positions.
How we execute trades
The instruments you trade with us are synthetically created by us mirroring the movement and depth of the underlying asset. As such dealing in our products is considered exclusively off-exchange (over the counter (OTC). All client transactions are back to backed in the market simultaneously at point of execution, but as we host the products you trade with us we will be the venue of execution.
You are placing trades (or bets) on our prices and not those on an exchange. Depending on the market, our prices will usually be based on an exchange price but can fluctuate away from the underlying prices due to a variety of reasons
InterTrader will execute all trades resulting from client instructions with one of its Liquidity Providers, and deliver the synthetically created instrument to the client. As such, the client only holds a synthetic position and has no entitlement to the underlying instrument or voting rights if applicable. All open trades can only be closed and settled with us.
We constantly update our website with product and market information which is available online and which we endeavour to keep up to date, without any obligation or liability on us to do so, or for its accuracy
Appropriateness of these products
We are required by our regulator before opening an account for you to ensure that our product offering is appropriate for you based on the information you provide us with. As such we may ask you for additional information concerning your financial assets and earnings; and to satisfy ourselves that you have the necessary experience and knowledge in order to understand the risks involved in relation to these products. Any decision to trade is yours and it is your responsibility to monitor your own positions, the level of risk you take and your continued ability, financially, to maintain any exposure resulting from open positions.
Fluctuation in volatility and liquidity will directly impact your P&L. Price movements in the underlying instruments can be volatile and unpredictable. We have no control over instrument price movements.
A feature of volatile markets is ‘gapping’ where prices are not consecutive and can be fast moving.. When a market moves a long way in an instant – or ‘gaps’ – any orders you have placed may be filled at a worse level than the one you requested. This is called slippage.
We do not offer guaranteed Stop Losses so instances of volatility or a lack of liquidity (the depth of the underlying market) may mean that your stop loss is executed well through your designated level. You should factor this into your trading strategy.
When the equity level reaches the percentage for a stop out, there will be a full close out of positions. Good management of your trading will most likely prevent the stop out level from being reached. Stop out level and margin calls are explained further in the Customer agreement.
InterTrader offers spread betting and CFD trading on Cryptocurrencies. Cryptocurrencies are highly volatile instruments. Trading Cryptocurrencies carries an exceptionally high level of risk and is not suitable for all clients. Before trading cryptocurrencies with InterTrader you must carefully consider the following:
- These instrument are extremely volatile and can have intraday swings in excess of 100% of the value of the underline instrument.
- The instruments suffer at times from poor liquidity as a result we cannot guarantee that once you have opened a position we will be able to close this position on demand. As we hedge every individual position, our execution is subject to available liquidity to execute trades (we do not take proprietary market risk).
- We are only open from Sunday 23:00 GMT to Friday 22:00 GMT. Some Cryptocurrencies trade 24/7. As a result, whilst our service is not available, the market may move and result in a market gapping. This is an extremely likely event. We therefore would strongly recommend against holding position open over a weekend.
- Due to the nature of the instrument, the financing costs are relatively high and this may have an impact on your potential return. Before trading you must consider all the costs associated with your transactions.
- Cryptocurrencies have ‘forks’ – this is similar to a share split. As a result in the event you have a sell (“SHORT”) position during the occurrence of a fork you may be allocated with a sell (“SHORT”) position of the new instrument created with the position opened at a value of ‘0’. As a result it will be impossible for this position to become profitable.
Please ensure you fully understand the additional risks associated with trading CFDs in Cryptocurrencies.
Seeking independent professional help
If you are in any doubt whatsoever about any aspect of the risks involved in FX, CFDs or Spread Betting then we recommend that you seek independent professional help or advice before continuing.
If you are considering trading in shares in a company that you work for then you should seek legal advice beforehand to ascertain that you are not in breach of any laws or regulations that apply to you.