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 (including Contracts for Difference “the CFDs” and Equities). 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. DNBC Global Markets will not provide clients with any investment advice in relation to investments, possible transactions in investments, or Financial Instruments, nor 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 DNBC Global Markets . 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 they are liable for all these losses and damages, which could result in more than the initial invested capital once they make the decision has been made to trade.
Effect of "leverage" or "gearing"
Transactions in spot foreign exchange, spot metals 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 that transactions are “leveraged”. 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.
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 his order is either not executed according to his instructions or it is not executed at all. DNBC Global Markets does not accept any liability in the case of such a failure.
While trading through the Client Terminal the Client shall be responsible for the risks of financial losses caused by:
(a) Client's or DNBC Global Markets’ hardware or software failure, malfunction or misuse;
(b) poor Internet connection either on the side of the Client or DNBC Global Markets or both, or interruptions or transmission blackouts or public electricity network failures or hacker attacks, overload of connection;
(c) the 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 DNBC Global Markets’ Website.
Contracts for Differences
The CFDs available for trading with DNBC Global Markets are non-deliverable spot transactions giving an opportunity to make profit on changes in currency rates, commodity, stock market indices or share prices called the underlying instrument. If the underlying instrument movement is in the Client's favour, 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. So, the Client must not enter into CFDs unless he is willing to undertake the risks of losing entirely all the money which he has invested and also any additional table-accordion commissions and other expenses incurred.
Investing in a Contract for Differences carries the same risks as investing in a future or an option and you should be aware of these as set out above. Transactions in Contracts for Differences may also have a contingent liability and you should be aware of the implications of this as set out below.
Risk-reducing orders or 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.
Restriction of trading and pricing relationships
Liquid Market conditions, changes in government regulation or trading restrictions with respect to certain markets may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate/offset positions. DNBC Global Markets will bear no liability for any failure to effect any such transactions should such events arise. Off-exchange transactions (over the counter) may be less regulated or subject to a separate regulatory regime. Before you undertake such transactions, you should familiarize yourself with applicable rules and attendant risks.
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 DNBC Global Markets 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.
Electronic trading risk
In case of any system failure or other interruption, orders may not be executed according to the Client’s instructions or Client may not be able to place or change orders. DNBC Global Markets shall not be liable for any such failure of hardware or software, system downtime or communications interruption. Further, DNBC Global Markets does not warrant that the Client will be able to maintain a continuous and uninterrupted link with the internet and shall have no liability for any such failure.
OTC and off-exchange transactions
Unlike the regulated exchanges, there are no limits on daily price movements when trading OTC instruments and other off-exchange derivatives. Therefore not all of the Client protections generally found in the regulated exchange markets are present in the OTC instruments and off-exchange derivatives. OTC and off-exchange transactions may be less regulated or subject to a separate regulatory regime. Before undertaking such transactions, clients should familiarize themselves with applicable rules and risks.
The client enters a trade and opens a position with DNBC Global Markets in its capacity as a counterparty. DNBC Global Markets online trading software is not a marketplace or an exchange. There are no guarantees to the creditworthiness of DNBC Global Markets. DNBC Global Markets has the right, in its sole discretion, to cease trading in any OTC and off-exchange derivative instrument at any time, and in such event, Clients will be prevented from liquidating an adverse position. Such actions may result in a substantial loss to the Client.
Introducing brokers and other affiliations
Clients may be introduced to DNBC Global Markets by an Introducing Broker. It is important to note that DNBC Global Markets and Introducing Brokers are separated and independent from one another without an employee, agency or partner relationship.