Risk Warning

Risk Warnings

Prospective clients should study the following risk warnings very carefully. Please note that we do not explore or explain all the risks involved when dealing in Financial Instruments. We outline the general nature of the risks of dealing in Financial Instruments on a fair and non-misleading basis.

In particular, Contracts for Difference ('CFDs') are complex financial products and not suitable for all investors. CFDs are leveraged products that mature when you choose to close an existing open position. By investing in CFDs, you assume a high level of risk and can result in the loss of all of your invested capital.

Unless a client knows and fully understands the risks involved in each Financial Instrument, they should not engage in any trading activity. You should not risk more than you are prepared to lose. PNM will not provide clients with any investment advice in relation to investments, possible transactions in investments, or Financial Instruments, neither will we make any investment recommendations.

Clients should consider which Financial Instrument is suitable for them according to their financial status and goals before opening an account with PNM. If a client is unclear about the risks involved in trading in Financial Instruments, then they should consult an independent financial advisor. If the client still doesn't understand these risks after consulting an independent financial advisor, then they should refrain from trading at all.

Purchasing and selling Financial Instruments comes with a significant risk of losses and damages, and each client must understand that the investment value can both increase and decrease. Clients are liable for all these losses and damages, which could result in more than the initial invested capital once they make the decision to trade.

Acknowledgement - Technical Risk

  1. The Client shall be responsible for the risks of financial losses caused by the failure of information, communication, electronic, and other systems. The result of any system failure may be that their order is either not executed according to their instructions or is not executed at all. The Company does not accept any liability in the case of such a failure.
  2. While trading through the Client Terminal, the Client shall be responsible for the risks of financial losses caused by:
    • a) Client's or Company's hardware or software failure, malfunction, or misuse;
    • b) Poor internet connection either on the side of the Client or the Company or both, or interruptions or transmission blackouts, public electricity network failures, or hacker attacks, overload of connection;
    • c) Wrong settings in the Client Terminal;
    • d) Delayed Client Terminal updates;
    • e) The Client disregarding the applicable rules described in the Client Terminal user guide and in the Company's website.

Abnormal Market Conditions

  1. The Client acknowledges that under Abnormal Market Conditions, the period during which the Instructions and Requests are executed may be extended.

Trading Platform

  1. The Client acknowledges that only one Request or Instruction is allowed to be in the queue at one time. Once the Client has sent a Request or Instruction, any further Requests or Instructions sent by the Client are ignored, and the "Order is locked" message appears until the first Request or Instruction is executed.
  2. The Client acknowledges that the only reliable source of Quotes Flow information is that of the real/live Server's Quotes Base. Quotes Base in the Client Terminal is not a reliable source of Quotes Flow information because the connection between the Client Terminal and the Server may be disrupted at some point, and some of the Quotes simply may not reach the Client Terminal.
  3. The Client acknowledges that when the Client closes the order placing/modifying/deleting window or the position opening/closing window, the Instruction or Request, which has been sent to the Server, shall not be canceled.
  4. In case the Client has not received the result of the execution of the previously sent Instruction but decides to repeat the Instruction, the Client shall accept the risk of making two Transactions instead of one, however the Client may receive an "Order is locked" message as described in point 2.5 above.
  5. The Client acknowledges that if the Pending Order has already been executed, but the Client sends the Instruction to modify its level and the levels of If-Done Orders at the same time, the only Instruction which will be executed is the Instruction to modify Stop Loss and/or Take Profit levels on the position opened when the Pending Order triggered.

Communication

  1. The Client shall accept the risk of any financial losses caused by the fact that the Client has received with delay or has not received at all any notice from the Company.
  2. The Client acknowledges that unencrypted information transmitted by email is not protected from any unauthorized access.
  3. The Client is fully responsible for the risks in respect of undelivered trading platform internal mail messages sent to the Client by the Company as they are automatically deleted within 3 (three) calendar days.
  4. The Client is wholly responsible for the privacy of the information received from the Company and accepts the risk of any financial losses caused by unauthorized access of a third party to the Client's Trading Account.
  5. The Company has no responsibility if authorized/unauthorized third persons have access to information, including electronic addresses, electronic communication, and personal data, access data when the above are transmitted between the Company or any other party, using the internet or other network communication facilities, telephone, or any other electronic means.

Force Majeure Event

  1. In case of a Force Majeure Event, the Client shall accept the risk of financial losses.

Risk Warning Notice for Foreign Exchange and Derivative Products

  1. This notice cannot disclose all the risks and other significant aspects of foreign exchange and derivative products such as futures, options, and Contracts for Differences. You should not deal in these products unless you understand their nature and the extent of your exposure to risk. You should also be satisfied that the product is suitable for you in light of your circumstances and financial position. Certain strategies, such as a "spread" position or a "straddle," may be as risky as a simple Long or Short position.

Effect of Leverage

  1. Under Margin Trading conditions, even small market movements may have a great impact on the Client's Trading Account. It is important to note that all accounts trade under the effect of Leverage. The Client must consider that if the market moves against the Client, they may sustain a total loss greater than the funds deposited. The Client is responsible for all the risks, financial resources they use, and for the chosen trading strategy.

It is highly recommended that the Client maintains a Margin Level (percentage Equity to Necessary Margin ratio) of not lower than 1,000%. It is also recommended to place Stop Loss to limit potential losses and Take Profit to collect profits when it is not possible for the Client to manage their Open Positions.

The Client shall be responsible for all financial losses caused by the opening of the position using temporary excess Free Margin on the Trading Account gained as a result of a profitable position (cancelled by the Company afterwards) opened at an Error Quote (Spike) or at a Quote received as a result of a Manifest Error.

High Volatile Instruments

  1. Some Instruments trade within wide intraday ranges with volatile price movements. Therefore, the Client must carefully consider that there is a high risk of losses as well as profits. The price of Derivative financial instruments is derived from the price of the underlying asset in which the instruments refer to (for example, currency, stock market indices, or share prices). Derivative financial instruments and related markets can be highly volatile. The prices of instruments and the underlying asset may fluctuate rapidly and over wide ranges and may reflect unforeseeable events or changes in conditions, none of which can be controlled by the Client or the Company. Under certain market conditions, it may be impossible for a Client's order to be executed at declared price, leading to losses. The prices of instruments and the underlying asset will be influenced by, among other things, changing supply and demand relationships, governmental, agricultural, commercial and trade programs, and policies, national and international political and economic events, and the prevailing psychological characteristics of the relevant market place. Therefore, Stop Loss order cannot guarantee the limit of loss.

The Client acknowledges and accepts that, regardless of any information which may be offered by the Company, the value of Instruments may fluctuate downwards or upwards, and it is even probable that the investment may become of no value. This is owed to the margining system applicable to such trades, which generally involves a comparatively modest deposit or 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 the Client's trade. If the underlying market movement is in the Client's favor, the Client may achieve a good profit, but an equally small adverse market movement can not only quickly result in the loss of the Client’s entire deposit, but may also expose the Client to a large additional loss.

Liquidity

  1. 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.

Futures

  1. Transactions in futures involve the obligation to make, or to take, delivery of the underlying asset of the contract at a future date, or in some cases to settle the position with cash. They carry a high degree of risk. The gearing or leverage often obtainable in futures trading means that a small depositor down payment 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 value of your investment, and this can work against you as well as for you. Futures transactions have a contingent liability, and you should be aware of the implications of this, in particular the margining requirements, which are set out below.

Options

  1. There are many different types of options with different characteristics subject to the following conditions:
  • Buying Options: Buying options involves less risk than selling options because, if the price of the underlying asset moves against you, you can simply allow the option to lapse. The maximum loss is limited to the premium, plus any commission or other transaction charges.
  • Writing Options: If you write an option, the risk involved is considerably greater than buying options. You may be liable for margin to maintain your position and a loss may be sustained well in excess of the premium received. By writing an option, you accept a legal obligation to purchase or sell the underlying asset if the option is exercised against you, however far the market price has moved away from the exercise price. Only experienced persons should contemplate writing uncovered options.

Contracts for Differences

  1. The CFDs available for trading with the Company are non-deliverable spot transactions giving an opportunity to make profit on changes in currency rates, commodity, stock market indices, or share prices (the underlying instrument). If the underlying instrument movement is in the Client's favor, the Client may achieve a good profit, but an equally small adverse market movement can not only quickly result in the loss of the Client’s entire deposit but also any additional table-accordion commissions and other expenses incurred. The Client must not enter into CFDs unless they are willing to undertake the risks of losing entirely all the money which they have invested and also any additional table-accordion commissions and other expenses incurred.

Off-exchange Transactions in Derivatives

  1. CFDs, forex, and precious metals are off-exchange transactions. While some off-exchange markets are highly liquid, transactions in off-exchange or non-transferable derivatives may involve greater risk than investing in on-exchange derivatives because there is no exchange market on which to close out an Open Position.

Foreign Markets

  1. Foreign markets involve various risks. On request, the Company must provide an explanation of the relevant risks and protections (if any) which will operate in any foreign markets, including the extent to which it will accept liability for any default of a foreign firm through whom it deals. The potential for profit or loss from transactions on foreign markets or in foreign-denominated contracts will be affected by fluctuations in foreign exchange rates.

Contingent Liability Investment Transactions

  1. Contingent liability investment transactions, which are margined, require you to make a series of payments against the purchase price instead of paying the whole purchase price immediately.

Collateral

  1. If you deposit collateral as security with the Company, the way in which it will be treated will vary according to the type of transaction and where it is traded. There could be significant differences in the treatment of your collateral depending on whether you are trading on a recognized or designated investment exchange, with the rules of that exchange (and the associated clearing house) applying, or trading off-exchange.

Commissions and Taxes

  1. Before you begin to trade, you should make yourself aware of all commissions and other charges for which you will be liable.
  2. There is a risk that the Client's trades in any Financial Instruments, including derivative instruments, may become subject to tax and/or other duties due to changes in legislation or personal circumstances.

Suspensions of Trading

  1. Under certain trading conditions, it may be difficult or impossible to liquidate a position. This may occur, for example, at times of rapid price movement.

Clearing House Protections

  1. On many exchanges, the performance of a transaction by your firm (or third party with whom it is dealing on your behalf) is guaranteed by the exchange or clearing house.

Insolvency

  1. The Company's insolvency or default may lead to positions being liquidated or closed out without your consent.

Third Party Risk

  1. The Company may pass money received from the Client to a third party to hold or control in order to effect a transaction through or with that person.
  2. The third party to whom the Company will pass money may hold it in an omnibus account, and it may not be possible to separate it from the Client's money.