Risk Warning

Products and Services

A simplified summary on products and services and the risks associated with them

Trading in financial products always involves risk. As a general rule, you should therefore only trade in financial products that you are familiar with and the understand the risk associated with them. You should carefully consider your financial situation and consult your independent professional advisors as to the suitability of your situation prior making any investment.

Securities

The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities.

Futures & Options

The risk of loss in trading futures contracts or options is substantial. In some circumstances, you may sustain losses in excess of your initial margin funds. Placing contingent orders, such as "stop-loss" or "stop-limit" orders, will not necessarily avoid loss. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore study and understand futures contracts and options before you trade and carefully consider whether such trading is suitable in the light of your own financial position and investment objectives. If you trade options you should inform yourself of exercise and expiration procedures and your rights and obligations upon exercise or expiry.

Futures

Futures trading involves trading on the price of a specific underlying asset going up or down in the future. A future gives the holder a standardised obligation to either buy or sell the underlying asset at a specified price at a certain date in the future. The underlying asset may, for instance, be raw materials, agricultural produce or financial products. Depending on the nature of the future, the asset either has to be settled for the price difference or by actual delivery at the settlement date. Saxo does not support actual physical delivery. Futures are always traded on margin (see "Foreign exchange trading" above). Futures are always traded in a regulated market, either by direct trading in the stock exchanges' trading systems, or by reporting of transactions.

Please note that as futures are margin traded, it allows you to take a larger position than you would otherwise be able to based on your funds with Saxo. As such, a relatively small negative or positive market movement can have a significant effect on your investment. Futures trading therefore involves a relatively high degree of risk. This makes the potential gain quite high, even if the deposit is relatively small. If your total exposure on margin trades exceeds your deposit, you risk losing more than your deposit.

The brief statements below disclose some but not all of the risks and other significant aspects of trading in futures. Trading in futures is not suitable for many members of the public. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances:

Effect of “Leverage” or “Gearing”

Transactions in futures carry a high degree of risk. The amount of initial margin is small relative to the value of the futures contract so that transactions are “leveraged” or “geared”. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit: this may work against you as well as for you. 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.
Risk-reducing orders or strategies

The placing of certain orders (e.g. “stop-loss” orders, or “stop-limit” orders) which are intended to limit losses to certain amounts may not be effective because market conditions may make it impossible to execute such orders. Strategies using combinations of positions, such as “spread” and “straddle” positions may be as risky as taking simple “long” or “short” positions.

Contract Options

Option trading is highly speculative and is not suitable for all investors due to the risks involved. Buyers and sellers of Contract Options should familiarize themselves with the type of option (i.e. put or call, bought or sold) they intend to trade and the associated risks. Contract Options are traded with Saxo as counterparty to the trades.

A Contract Option gives you the right or the obligation to either buy or sell a specified amount or value of a particular underlying asset at a fixed exercise price, by the option being exercised either before or on its specified expiration date. A Contract Option which gives you the right to buy or the obligation to sell is a call option and a Contract Option that gives you the right to sell or the obligation to buy is a put option.

A Contract Option that is in the money on expiry will always be exercised.

Trading Contract Options involves a high level of risk. Contract Options that give you the right to either sell or buy an underlying asset (bought Contract Options) might expire worthless and your initial investment (i.e. premium and transaction costs) will be lost. Contract Options that give you the obligation to either sell or buy an underlying asset (sold Contract Options) can result in substantial (potentially unlimited) losses. To assure you will be able to cover losses on sold Contract Options Saxo will require margin charges. Nonetheless, potential losses can exceed the margin charged and you will be liable for these losses.

If your total exposure on margin trades exceeds your deposit, you risk losing more than your deposit. If the underlying asset of a Contract Option is a margin traded product (i.e. a derivative), and if the Contract Option is being exercised by the buyer, then the buyer (in case of a call option) or the seller (in case of a put option) of the Contract Option will acquire a position in the underlying margin traded product with associated risks as well as liabilities to provide margin.

Stock Options

Final Settlement of Stock Options requires physical delivery of the underlying stocks vs. payment of the strike value in cash. In case a client is holding a stock options position, but is short either cash or stocks, he will not be able to settle the options position and the client will fail to deliver on his contractual obligation.

Final Settlement of a stock option position occurs when the holder of a long option position exercises his right to buy or sell the underlying stocks on and/or, in case of American Style options, prior to expiry. On expiry, all in-the-money long option positions held by clients of Saxo are automatically exercised. Both prior as well as on expiration, clients who hold short option positions will be assigned by means of a random assignment lottery. At expiry, there should be no "assume" procedure for delivering on short option positions. Instead of the assume procedure, the clearing statements from the broker should be used to reflect the true exchange expiry outcome.

As a general rule, Saxo clients have responsibility to meet the delivery requirements related to their option positions. As such Saxo will not pre-emptively act on client positions to avoid delivery failure. It will be the responsibility of the client to manage his positions especially when approaching expiry to make sure he can meet any delivery obligations. Notwithstanding the above, in case Saxo could be exposed to uncollateralized losses incurred by clients, Saxo reserves the right to act pre-emptively and close-out some or all of the client's positions that could cause potential losses which the client cannot carry on his account balances. Pre-emptive close-out will be conducted under the responsibility of the Saxo’s Market Analysis & Control.

In case a client failed to meet his delivery obligation, Saxo will act on behalf of the client and without the need to notify the client in advance to resolve the delivery failure. Saxo will resolve a short stock position by acquiring the required stocks at market price, Saxo will resolve a short cash position by liquidating any or all positions under delivery and if available any long option position that provided cover for a settling short option position. In the Exchange Traded Options context, this will be referred to as default handling. Transactions executed for the purpose of default handling, will be charged additional (substantial) commissions. Default Handling will be performed by Saxo's Markets Desk.

Therefore, Clients should carefully consider closing the position before expiry.

The brief statements below disclose some but not all of the risks and other significant aspects of trading in options. Trading in options is not suitable for many members of the public. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances:

Variable degree of risk

Transactions in options carry a high degree of risk. Purchasers and sellers of options should familiarise themselves with the type of option (i.e. put or call) which they contemplate trading and the associated risks. You should calculate the extent to which the value of the options must increase for your position to become profitable, taking into account the premium and all transaction costs.

The purchaser of options may offset or exercise the options or allow the options to expire. The exercise of an option results either in a cash settlement or in the purchaser acquiring or delivering the underlying interest. If the option is on a futures contract, the purchaser will acquire a futures position with associated liabilities for margin (see the section on Futures above). If the purchased options expire worthless, you will suffer a total loss of your investment which will consist of the option premium plus transaction costs. If you are contemplating purchasing deep-out-of-the-money options, you should be aware that the chance of such options becoming profitable ordinarily is remote.

Selling (“writing” or “granting”) an option generally entails considerably greater risk than purchasing options. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will be liable for additional margin to maintain the position if the market moves unfavourably. The seller will also be exposed to the risk of the purchaser exercising the option and the seller will be obligated to either settle the option in cash or to acquire or deliver the underlying interest. If the option is on a futures contract, the seller will acquire a position in a futures contract with associated liabilities for margin (see the section on Futures above). If the option is “covered” by the seller holding a corresponding position in the underlying interest or a futures contract or another option, the risk may be reduced. If the option is not covered, the risk of loss can be unlimited.

Certain exchanges in some jurisdictions permit deferred payment of the option premium, exposing the purchaser to liability for margin payments not exceeding the amount of the premium. The purchaser is still subject to the risk of losing the premium and transaction costs. When the option is exercised or expires, the purchaser is responsible for any unpaid premium outstanding at that time.

Additional Risks Common To Foreign Exchange And Derivative Transactions (Including Futures and Options)

Terms and conditions of contracts

You should ask the firm with which you deal about the terms and conditions of the specific futures or options which you are trading and associated obligations (e.g. the circumstances under which you may become obliged to make or take delivery of the underlying interest of a futures contract and, in respect of options, expiration dates and restrictions on the time for exercise). Under certain circumstances the specifications of outstanding contracts (including the exercise price of an option) may be modified by the exchange or clearing house to reflect changes in the underlying interest.
Suspension or restriction of trading and pricing relationships

Market conditions (e.g. illiquidity) and/or the operation of the rules of certain markets (e.g. the suspension of trading in any contract or contract month because of price limits or “circuit breakers”) may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate/offset positions. If you have sold options, this may increase the risk of loss.

Further, normal pricing relationships between the underlying interest and the futures, and the underlying interest and the option may not exist. This can occur when, for example, the futures contract underlying the option is subject to price limits while the option is not. The absence of an underlying reference price may make it difficult to judge “fair value”.
Deposited cash and property

You should familiarise yourself with the protections given to money or other property you deposit for domestic and foreign transactions, particularly in the event of a firm insolvency or bankruptcy. The extent to which you may recover your money or property may be governed by specific legislation or local rules. In some jurisdictions, property which had been specifically identifiable as your own will be pro-rated in the same manner as cash for purposes of distribution in the event of a shortfall.
Commission and other charges

Before you begin to trade, you should obtain a clear explanation of all commission, fees and other charges for which you will be liable. These charges will affect your net profit (if any) or increase your loss.
Transactions in other jurisdictions

Transactions on markets in other jurisdictions, including markets formally linked to a domestic market, may expose you to additional risk. Such markets may be subject to regulation which may offer different or diminished investor protection. Before you trade you should enquire about any rules relevant to your particular transactions. Your local regulatory authority will be unable to compel the enforcement of the rules of regulatory authorities or markets in other jurisdictions where your transactions have been effected. You should ask the firm with which you deal for details about the types of redress available in both your home jurisdiction and other relevant jurisdictions before you start to trade.
Currency risks

The profit or loss in transactions in foreign currency-denominated contracts (whether they are traded in your own or another jurisdiction) will be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the contract to another currency.
Trading facilities

Electronic trading facilities are supported by computer-based component systems for the order-routing, execution, matching, registration or clearing of trades. As with all facilities and systems, they are vulnerable to temporary disruption or failure. Your ability to recover certain losses may be subject to limits on liability imposed by the system provider, the market, the clearing house and/or participant firms. Such limits may vary: you should ask the firm with which you deal for details in this respect.
Electronic trading

Trading on an electronic trading system may differ from trading on other electronic trading systems. If you undertake transactions on an electronic trading system, you will be exposed to risks associated with the system including the failure of hardware and software. The result of any system failure may be that your order is either not executed according to your instructions or is not executed at all.
Off-exchange transactions

In some jurisdictions, and only then in restricted circumstances, firms are permitted to effect off-exchange transactions. The firm with which you deal may be acting as your counterparty to the transaction. It may be difficult or impossible to liquidate an existing position, to assess the value, to determine a fair price or to assess the exposure to risk. For these reasons, these transactions may involve increased risks. Off-exchange transactions may be less regulated or subject to a separate regulatory regime. Before you undertake such transactions, you should familiarise yourself with applicable rules and attendant risks.

Foreign Exchange (Forex / FX)

When trading in foreign exchange, the investor takes a view on the development of the price of one currency relative to another, where one is sold and the other is purchased. By way of example, an investor may sell British pounds (GBP) against the US dollar (USD) if he expects that the USD will increase relative to the GBP.

Foreign exchange is traded as a leveraged product, which means that for a small outlay, you can open and trade larger positions in the market. Foreign exchange may be traded as FX Spot, FX Forward or FX Options. FX Spot is the purchase of one currency against the sale of another for immediate delivery. FX Forward and FX Options transactions are settled on an agreed date in the future at prices which are agreed on the date of the transaction. FX Forward trading involves an obligation to enter into the transaction at the agreed price on the settlement date. A purchaser of FX Options has a right to enter into a transaction in the underlying FX Spot currency pair on the expiry date if the price is more favourable than the market price at this time. On the other hand, a seller of options has an obligation to enter into a transaction with the purchaser (Saxo) on the settlement date if requested by the purchaser. Purchased options therefore involve a limited risk in the form of a premium which is payable when the contract is made, while options that have been sold involve unlimited risk in the form of changes to the price of the underlying FX Spot currency pair.

The currency exchange market is the world's largest financial market with 24 hour trading on working days. It is characterised, among other things, by a relatively low profit margin compared to other products. A high profit is therefore subject to a large trading volume, which is achieved for instance by margin trading as described above. When trading in foreign exchange, a gain realised by one market player will always be offset by another player's loss. Foreign exchange transactions are always made with Saxo as counterparty, and Saxo quotes prices on the basis of prices that can be obtained in the market.

Please note that as foreign exchange is margin traded, it allows you to take a larger position than you would otherwise be able to based on your funds with Saxo. As such, a relatively small negative or positive market movement can have a significant effect on your investment. Foreign exchange trading therefore involves a relatively high level of risk. This makes the potential gain quite high, even if the deposit is relatively small. If your total exposure on margin trades exceeds your deposit, you risk losing more than your deposit.

The risk of loss in leveraged foreign exchange trading can be substantial. You may sustain losses in excess of your initial margin funds. Placing contingent orders, such as "stop-loss" or "stop-limit" orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore carefully consider whether such trading is suitable in light of your own financial position and investment objectives.

Forex Options

There are special risks associated with forex option selling that may expose investors like yourself to significant losses. Therefore, this type of strategy may not be suitable for all customers, as it is meant primarily for sophisticated and well experienced clients.

Kindly note the following scenarios:

(a) An option seller may be short on a contract and then experience a rise in demand for contracts, which, in turn, inflates the price of the premium and may cause large losses, even if the underlying has not moved.

(b) The seller of the option may incur large losses if the price of the options increases due to but not restricted to the followings:

Price of the underlying
Strike price
Time until expiration
Volatility of the underlying

The cash balance on your account increases.
The unrealized value of positions will be decreased accordingly according to the real time offer price of the option.
There is hence no increase in account value when initiating a new short contract options trade.

(d) There is generally more risk and generally less reward involved in selling options than in purchasing options.

(e) Selling options naked (not covered or hedged) involves the risk of an unlimited loss.

When selling a naked CALL option, the underlying can theoretically rise to an infinite price level, resulting in infinite losses on your trading account.
When selling a naked PUT option, the underlying can theoretically fall to zero, resulting in massive losses on your trading account.

(f) The seller of a European‐style option is subject to exercise assignment only during the exercise period.

(g) In the case of a margin stop out where the required margin on the account exceeds the net equity for margin.

ALL margin positions (including bought only options) will be forced closed by the system.
In view of our self‐directed trading business model, we make no commitment to contact you by phone and/or email before the forced closure of your positions by the system.
Your positions may have been forced closed by the system even if you may have initiated a transfer of funds

(h) Losses on a short Option position can be substantial when the market moves against the position, and can result in a deficit balance on the account ‐ which is immediately due and payable.

Forex option selling is suitable only for the highly experienced and sophisticated investor who understands the risks, has the financial capacity and willingness to incur potentially substantial losses, and has sufficient liquid assets to meet applicable margin requirements. In this regard, if the value of the underlying instrument moves against an uncovered seller's options position, Saxo may request significant additional margin payments, or close positions in the investor's account with little or no prior notice in accordance with the General Business Terms.

Growth Enterprise Market Stocks

Growth Enterprise Market (GEM) stocks involve a high investment risk. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. GEM stocks may be very volatile and illiquid.

You should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Current information on GEM stocks may only be found on the internet website operated by The Stock Exchange of Hong Kong Limited. GEM Companies are usually not required to issue paid announcements in gazetted newspapers.

You should seek independent professional advice if you are uncertain of or have not understood any aspect of this risk disclosure statement or the nature and risks involved in trading of GEM stocks.

Overseas-Listed Investment Products

An overseas-listed investment product is subject to the laws and regulations of the jurisdiction it is listed in. Before you trade in an overseas-listed investment product or authorise someone else to trade for you, you should be aware of:

(a) The level of investor protection and safeguards that you are afforded in the relevant foreign jurisdiction, as the overseas-listed investment product would operate under a different regulatory regime.

(b) The differences between the legal systems in the foreign jurisdiction and Hong Kong that may affect your ability to recover your funds.

(c) The tax implications, currency risks, and additional transaction costs that you may have to incur. The counterparty and correspondent broker risks that you are exposed to.

(d) The political, economic and social developments that influence the overseas markets you are investing in.

These and other risks may affect the value of your investment. You should not invest in the product if you do not understand or are not comfortable with such risks.

This statement does not disclose all the risks and other significant aspects of trading in an overseas-listed investment product. You should undertake such transactions only if you understand and are comfortable with the extent of your exposure to the risks.

You should carefully consider whether such trading is suitable for you in light of your experience, objectives, risk appetite, financial resources and other relevant circumstances. In considering whether to trade or to authorise someone else to trade for you, you should be aware of the following:

Differences in Regulatory Regimes

(a) Overseas markets may be subject to different regulations, and may operate differently from approved exchanges in Hong Kong. For example, there may be different rules providing for the safekeeping of securities and monies held by custodian banks or depositories. This may affect the level of safeguards in place to ensure proper segregation and safekeeping of your investment products or monies held overseas. There is also the risk of your investment products or monies not being protected if the custodian has credit problems or fails. Overseas markets may also have different periods for clearing and settling transactions. These may affect the information available to you regarding transaction prices and the time you have to settle your trade on such overseas markets.

(b) Overseas markets may be subject to rules which may offer different investor protection as compared to Hong Kong. Before you start to trade, you should be fully aware of the types of redress available to you in Hong Kong and other relevant jurisdictions, if any.

(c) Overseas-listed investment products may not be subject to the same disclosure standards that apply to investment products listed for quotation or quoted on an approved exchange in Hong Kong. Where disclosure is made, differences in accounting, auditing and financial reporting standards may also affect the quality and comparability of information provided. It may also be more difficult to locate up-to-date information, and the information published may only be available in a foreign language.

Differences in legal systems

(d) In some countries, legal concepts which are practiced in mature legal systems may not be in place or may have yet to be tested in courts. This would make it more difficult to predict with a degree of certainty the outcome of judicial proceedings or even the quantum of damages which may be awarded following a successful claim.

(e) The Securities and Futures Commission may be unable to compel the enforcement of the rules of the regulatory authorities or markets in other jurisdictions where your transactions will be effected.

(f) The laws of some jurisdictions may prohibit or restrict the repatriation of funds from such jurisdictions including capital, divestment proceeds, profits, dividends and interest arising from investment in such countries. Therefore, there is no guarantee that the funds you have invested and the funds arising from your investment will be capable of being remitted.

(g) Some jurisdictions may also restrict the amount or type of investment products that foreign investors may purchase. This can affect the liquidity and prices of the overseas-listed investment products that you invest in.

Different costs involved

(h) There may be tax implications of investing in an overseas-listed investment product. For example, sale proceeds or the receipt of any dividends and other income may be subject to tax levies, duties or charges in the foreign country, in Hong Kong, or in both countries.

(i) Your investment return on foreign currency-denominated investment products will be affected by exchange rate fluctuations where there is a need to convert from the currency of denomination of the investment products to another currency, or may be affected by exchange controls.

(j) You may have to pay additional costs such as fees and broker's commissions for transactions in overseas exchanges. In some jurisdictions, you may also have to pay a premium to trade certain listed investment products. Therefore, before you begin to trade, you should obtain a clear explanation of all commissions, fees and other charges for which you will be liable. These charges will affect your net profit (if any) or increase your loss.

Counterparty and correspondent broker risks

(k) Transactions on overseas exchanges or overseas markets are generally effected by Saxo through the use of foreign brokers who have trading and/or clearing rights on those exchanges. All transactions that are executed upon your instructions with such counterparties and correspondent brokers are dependent on their respective due performance of their obligations. The insolvency or default of such counterparties and correspondent brokers may lead to positions being liquidated or closed out without your consent and/or may result in difficulties in recovering your money and assets held overseas.

Political, Economic and Social Developments

(l) Overseas markets are influenced by the political, economic and social developments in the foreign jurisdiction, which may be uncertain and may increase the risk of investing in overseas-listed investment products.

Receipt of Client Assets Outside Hong Kong

Client assets received or held by the licensed or registered person outside Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction which may be different from the Securities and Futures Ordinance (Cap.571) and the rules made thereunder. Consequently, such client assets may not enjoy the same protection as that conferred on client assets received or held in Hong Kong.

Authority to Repledge your Securities Collateral, etc

There is risk if you provide the licensed or registered person with an authority that allows it to apply your securities or securities collateral pursuant to a securities borrowing and lending agreement, repledge your securities collateral for financial accommodation or deposit your securities collateral as collateral for the discharge and satisfaction of its settlement obligations and liabilities.

If your securities or securities collateral are received or held by the licensed or registered person in Hong Kong, the above arrangement is allowed only if you consent in writing. Moreover, unless you are a professional investor, your authority must specify the period for which it is current and be limited to not more than 12 months. If you are a professional investor, these restrictions do not apply.

Additionally, your authority may be deemed to be renewed (i.e. without your written consent) if the licensed or registered person issues you a reminder at least 14 days prior to the expiry of the authority, and you do not object to such deemed renewal before the expiry date of your then existing authority.

You are not required by any law to sign these authorities. But an authority may be required by licensed or registered persons, for example, to facilitate margin lending to you or to allow your securities or securities collateral to be lent to or deposited as collateral with third parties. The licensed or registered person should explain to you the purposes for which one of these authorities is to be used.

If you sign one of these authorities and your securities or securities collateral are lent to or deposited with third parties, those third parties will have a lien or charge on your securities or securities collateral. Although the licensed or registered person is responsible to you for securities or securities collateral lent or deposited under your authority, a default by it could result in the loss of your securities or securities collateral.

A cash account not involving securities borrowing and lending is available from most licensed or registered persons. If you do not require margin facilities or do not wish your securities or securities collateral to be lent or pledged, do not sign the above authorities and ask to open this type of cash account.

Authority to Hold Mail or to Direct Mail to Third Parties

If you provide the licensed or registered person with an authority to hold mail or to direct mail to third parties, it is important for you to promptly collect in person all contract notes and statements of your account and review them in detail to ensure that any anomalies or mistakes can be detected in a timely fashion.

Margin Lending

You should carefully read this information and the Margin Lending Terms before participating in Margin Lending.

With Margin Lending, you can purchase eligible instruments using a loan provided to you by Saxo. Should you choose to use a margin loan, eligible instruments in your account will act as collateral for the loan. You should carefully consider your financial situation, the risks and consult your independent professional advisors (as necessary) prior to using a margin loan.

Margin Lending provides greater market exposure

Using a margin loan allows you to purchase more instruments than would be possible without a loan. Therefore, your exposure to changes in the prices of the underlying instruments will be greater. Your potential losses, in the case that the underlying instruments decease in value, will be greater.

You may lose more money than your initial deposit

When margin trading, it is necessary to deposit initial collateral in the form of cash or fully paid securities. The deposit is necessary as Saxo will not lend you the full value of the securities you wish to purchase. Taking out a margin loan will allow you to buy securities, the value of which will exceed your initial deposit. Consequently, you will have greater exposure to the price movement of purchased securities. A decline in the value of the purchased securities may result in losses in excess of your initial deposit and may require you to deposit additional funds or collateral to avoid a forced sale of the margin securities or other securities in your account.

A decline in the value of the purchased instruments may result in losses in excess of your initial deposit and may require you to deposit additional funds or eligible collateral to meet any applicable margin requirements.

Repledging

Under the Margin Lending Terms, Saxo has the right to sell, pledge, re-hypothecate, assign, invest, use, commingle or otherwise dispose of, and otherwise use in its business, any margin securities, and a default could result in the loss of your margin securities.

If you fail to meet margin requirements, Saxo has the right to initiate the closure or reduction of positions in your account without notice

If you fail to meet the applicable margin requirements, Saxo has the right (but is not obliged) to close or reduce different types of positions on your account and/or cancel any open orders without notice, depending on whether your “margin utilisation” ratio or “collateral utilisation” ratio (or both) has reached or exceeded 100%.

You are responsible for any deficit on the account at all times

At all times, you are solely responsible for any negative balance or interest on any of your accounts. For example, you remain responsible for any negative deficit on your account that arises even after Saxo has exercised its right to close or reduce the positions in your account.

In case of a margin call you do not have any discretion to choose the assets to be liquidated

In the event of a forced sale, Saxo will sell all of your securities (if you have elected full stop-out) or a pro-rated portion of your securities (in the case you have elected partial stop-out). You will not be able to decide which securities are sold, what quantities will be sold and in what order the securities will be sold, and you are not entitled to any extension of time on a margin call. Moreover, you will remain liable for any resulting deficit in your account and interest charged on your account.

Saxo may increase the applicable margin requirements at any time without notice

Any applicable margin requirement may be adjusted by Saxo at any time (at its sole discretion) and take effect immediately without notice. It is your sole responsibility to ensure that your account has sufficient collateral or funds to meet any applicable margin requirements at all times.

Margin Trading

The risk of loss in financing a transaction by deposit of collateral is significant. You may sustain losses in excess of your cash and any other assets deposited as collateral with the licensed or registered person. Market conditions may make it impossible to execute contingent orders, such as "stop-loss" or "stop-limit" orders. You may be called upon at short notice to make additional margin deposits or interest payments. If the required margin deposits or interest payments are not made within the prescribed time, your collateral may be liquidated without your consent. Moreover, you will remain liable for any resulting deficit in your account and interest charged on your account. You should therefore carefully consider whether such a financing arrangement is suitable in light of your own financial position and investment objectives.

Stock Lending

You should carefully read this information and the Stock Lending Terms before participating in Stock Lending.

By participating in Stock Lending, you permit Saxo to borrow Stocks from you on a title transfer basis, which Saxo may thereafter on lend to third parties. However, you continue to maintain market risk on any Stocks which Saxo has borrowed from you (i.e. if the price of the Stocks decreases while the Stocks are loaned to Saxo, then the value of the Stocks which you will receive upon the termination/expiry of the loan will decrease; and vice versa).

Where Saxo has borrowed your Stocks, you can still choose to sell such Stocks at any time.

It is possible that Saxo does not borrow any of the Stocks on your Account and you may not therefore not receive any additional revenue from participating in Stock Lending. If Saxo borrows Stocks from you, the additional revenue which you receive may fluctuate because of prevailing market conditions.

While your Stocks are loaned out, you will not retain voting rights and the right to attend general meetings of shareholders (as applicable). When participating in Stock Lending, it will not be possible to choose to make only certain Stocks on your Account available for lending to Saxo.

You should consult a tax advisor on any potential tax implications that you may incur by participating in Stock Lending.

Nasdaq-Amex Securities at The Stock Exchange of Hong Kong Limited

The securities under the Nasdaq-Amex Pilot Program (“PP”) are aimed at sophisticated investors. You should consult the licensed or registered person and become familiarised with the PP before trading in the PP securities. You should be aware that the PP securities are not regulated as a primary or secondary listing on the Main Board or the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited.

Bullion

Trading in Bullion, which includes Gold, Silver and Precious Metals, particularly on margin trading, result in substantial gain as well as substantial losses in excess of your initial margin funds. As such, bullion trading may not be suitable for everyone. Please note that the value of bullion is affected by many global economic factors, which are unpredictable. If the market goes against your existing position, you may be called upon at short notice to deposit additional margin funds in order to maintain your margin position(s). Failing to provide the required funds within the prescribed time, will require us to immediately liquidate all of your existing margin positions and you may be liable for any resulting deficit in your trading account. Placing contingent orders will not necessarily limit losses to the intended amounts in fast moving markets. Market conditions may make it impossible to execute such orders. You should therefore seek independent financial advice to ensure that trading bullion is suitable for your financial situation.

Exchange Traded Funds (ETFs)

Most ETFs track a portfolio of assets to provide diversified exposure. It is typically designed to track the performance of certain indices, market sectors, or groups of assets such as stocks, bonds, or commodities. However, some ETFs may invest in stock index future contracts and other derivatives. Compared to conventional securities, derivatives can be more sensitive to changes in market prices due to both the low margin deposits required, and the extremely high degree of leverage involved in derivative products. As a result, a relatively small price movement in the derivative product may result in immediate and substantial loss (or gain) to the ETF. In addition, some derivatives are traded OTC. OTC derivatives markets are generally not regulated by government authorities and participants in these markets are not required to make continuous market in the contracts they trade. As a result, an ETF that engages in transactions involving OTC derivatives is subject to the liquidity risk. In the event that the market makers cease to fulfill their role, investors may not be able to buy or sell the ETF. For ETFs with underlying assets not denominated in the base currency, they are also exposed to exchange rate risk. Currency rate fluctuations can adversely affect the underlying asset value, also affecting the ETF price. Before trading, Clients should read the ETF prospectus carefully to ensure they understand how the fund operates and make an independent determination if this product is suitable for them.

SaxoWealthCare

Investments into a SaxoWealthCare portfolio are not capital guaranteed and are subject to risks and the potential loss of some or the whole of the principal invested, and we are not responsible for any loss that may be suffered by you arising from or in connection with movement in prices or exchange rates, errors or delays in the transmission of any instruction from or to you or changes in any applicable law.

Advice provided by us will be based on information from sources believed to be accurate, however no representation or warranty, express or implied is made by us as to the accuracy, completeness or suitability of such advice.

You agree that you are solely responsible for making your own independent investigation and appraisal of any advice, recommendations, view, opinion or information provided by us. You shall fully understand and familiarise yourself with all the terms and conditions of each investment and the risks involved, and agree that you will only accept our recommended investment plan on the basis of your own independent review and determination that the recommended investment plan is suitable and appropriate for you, taking into account your specific objectives, financial situation, investment experience, knowledge and particular needs.

You agree and acknowledge that you have made all necessary enquiries and we have informed you of all material features and risks involved in respect of your investments including but not limited to information on:

the nature and objective of your investments;
the key benefits and risks of your investments;
details of the providers of your investments;
your key rights with respect to your investments;
the intended investment horizon of your investments;
the ease of converting your investments to cash;
the expected level of your risk tolerance in respect of your investments;
the commitment required from you in respect of your investments;
the pricing of your investments;
the fees and charges to be borne by you in respect of your investments;
the frequency of reports to be provided to you in respect of your investments;
any applicable charges or restrictions on withdrawal, surrender or claim procedures of your investments;
any applicable warnings, exclusions and disclaimers; and
information in relation to where the prospectus in respect of your investments (if applicable) may be accessed, or if we consider it appropriate, an abridged version of such prospectus.

You further acknowledge and accept that we will collect, document or take into account any of the following information before, or in the course of, providing you with the SaxoWealthCare service:

Your employment status;
Your financial situation, including assets, liabilities, cash flow and income;
The source and amount of your regular income;
Your financial commitments;
Your current investment portfolio (including any life policies); and
Whether the amount to be invested by you is a substantial portion of your assets.

You expressly acknowledge that you have the appetite to assume all economic consequences and risks of your investments and to the extent necessary, have consulted your own tax, legal and other advisers.

Extended Hours Trading

You should consider the following points before engaging in Extended Hours Trading in the U.S. (United States) securities market. "Extended Hours Trading" means trading in (a) "Pre-Market Trading Hours" of between 7:00 a.m. and 9:30 a.m. Eastern Time; and (b) "After-Hours Trading Hours" of between 4:00 p.m. and 5:00 p.m. Eastern Time respectively. "Regular Hours Trading" means trading from 9:30 a.m. to 4:00 p.m. Eastern Time.

1. General Risks

Risk of Lower Liquidity. Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more orders that are available in a market, the greater the liquidity. Liquidity is important because with greater liquidity it is easier for investors to buy or sell securities, and as a result, investors are more likely to pay or receive a competitive price for securities purchased or sold. There may be lower liquidity during Extended Hours Trading compared to Regular Hours Trading. As a result, your order in Extended Hours Trading may only be partially executed, not executed at all, or may receive inferior pricing.
Risk of Higher Volatility. Volatility refers to the changes in price that securities undergo when trading. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility during Extended Hours Trading. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price when engaging in Extended Hours Trading than you would during Regular Hours Trading.
Risk of Changing Prices. The prices of securities traded during Extended Hours Trading may not reflect the prices in Regular Hours Trading. As a result, you may receive an inferior price when engaging in Extended Hours Trading than you would during Regular Hours Trading. Additionally, securities underlying the indexes or portfolios will not be regularly trading as they are during Regular Hours Trading or may not be trading at all. This may cause prices during Extended Hours Trading not reflecting the prices of those securities when they open for trading.
Risk of Unlinked Markets. Depending on the Extended Hours Trading system or the time of day, the prices displayed on a particular Extended Hours Trading system may not reflect the prices in other concurrently operating Extended Hours Trading systems dealing in the same securities. Accordingly, you may receive a price in one Extended Hours Trading system that is inferior to the price you would receive in another Extended Hours Trading system.
Risk of News Announcements. Normally, issuers make news announcements that may affect the price of their securities after Regular Hours Trading. Similarly, important financial information is frequently announced outside of Regular Hours Trading. In Extended Hours Trading, these announcements may occur during trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.
Risk of Wider Spreads. The spread refers to the difference between the price at which a security can be purchased and the price at which it can be sold. Lower liquidity and higher volatility in Extended Hours Trading may result in wider than normal spreads for a particular security.

2. Order Handling

Limit Orders. All existing limit orders placed with respect to eligible Instruments which have the ‘Extended Hours’ option enabled on the respective trade tickets will continue to be executed during Pre-Market Trading Hours or After-Hours Trading Hours sessions. Any residual unfilled limit orders existing after the session close of (1) Pre-Market Trading Hours will be rolled into the continuous session of Regular Hours Trading; (2) Regular Hours Trading will be rolled into the continuous session of After-Hours Trading; and (3) After-Hours Trading Hours will be rolled into the continuous session of Pre-Market Trading Hours, provided such limit order is not cancelled, expired, or as otherwise indicated by you.
Stop Orders and Conditional Orders. Stop orders and Conditional orders will not be triggered by price updates received for Instruments available for and during Extended Hours Trading, and will only be triggered by price updates for such Instruments during Regular Hours Trading
Corporate Actions. Certain Instruments affected by a corporate action event may not be allowed to trade during the Extended Hours Trading at our discretion unless all relevant orders and positions can be correctly handled.

3. Margin Requirement

Price updates received for Instruments available for and during Extended Hours Trading will impact the initial margin available but will not impact the maintenance margin available in your Account(s). However, your margin utilisation may still change during Extended Hours Trading due to trading activity in the Extended Hours Trading session, including trading in other Instruments or currency fluctuation. If your Margin Requirement is reached or breached during Extended Hours Trading, Saxo may not close any and all Contracts and Margin Positions for such Instruments until Regular Hours Trading but may close any other Instruments immediately that are in the Regular Trading Session.

4. Account shield

Your Account shield will not be triggered by price updates received for Instruments available for and during Extended Hours Trading, and will only be triggered by price updates for such Instruments during Regular Hours Trading.

By participating in Extended Hours Trading, you expressly acknowledge and agree to the unique risks and rules of investing during Extended Hours Trading sessions. Saxo may not be able to predict and describe all of the special trading risks that could arise in Extended Hours Trading. Therefore, you agree not to hold Saxo responsible for any risks you undertake, whether described above or not, by participating in Extended Hours Trading sessions.

In the event of any inconsistency between this Risk Warning and Saxo’s General Business Terms, the General Business Terms shall prevail.

Saxo may notify you or make known on the Trading Platform of Instruments in respect of Extended Hours Trading to which we will not quote, the restrictions on the amount for which we will quote, or other conditions that may apply to our quote, but any such notification will not be binding on us.

You expressly acknowledge and agree that regardless of whether you engage in Extended Hours Trading, the price updates received for Instruments available for and during Extended Hours Trading will affect the initial margin available in your Account(s) and this may affect or reduce your ability to open new position(s) on any Instruments or withdraw funds. Further, you understand that Extended Hours Trading may not be appropriate for every investor and that you are solely responsible for implementing or adopting any investment decision or trading strategy.

CFDs (Applicable to Professional Investors)

A CFD - or Contract for Difference - is an agreement between two parties to exchange the difference between the purchase and sale price of a financial instrument or security. The product allows you to take a view on the future increases or decreases in the value of a specific asset, for instance a share. If your view proves to be correct, you will make a profit from the difference in value (less costs). If the view you took turns out to be wrong, you will have to pay the difference in value (plus costs). Being tied to an underlying asset, the value of a CFD depends on that asset. CFDs are always margin traded (see the above paragraph on foreign exchange transactions). CFDs are normally traded with Saxo as the counterparty, but some CFDs may be traded on a regulated market. However, the price always moves with the price of the underlying product, which is in most cases traded on a regulated market. The price and liquidity of CFDs on individual shares mirror the price and liquidity of the share on the market in which the share is admitted for trading, whereas, for instance, index CFDs are over-the counter (OTC) products with a price fixed by Saxo on the basis of the price and liquidity of the underlying shares, the futures market, estimated future dividends, the effects of interest rates, etc.

Please note that as CFDs are margin traded, it allows you to take a larger position than you would otherwise be able to based on your funds with Saxo. As such, a relatively small negative or positive movement in the underlying instrument can have a significant effect on your investment. CFD trading therefore involves a relatively high level of risk. This makes the potential gain quite high, even if the deposit is relatively small. If your total exposure on margin trades exceeds your deposit, you risk losing more than your deposit.

Investment in CFD is generally considered to be a risky form of investment. If you have pursued conservative forms of investment in the past, you may wish to obtain professional consultation further before considering an investment in any collective investment scheme. You must realize that you could sustain a total loss of all funds invested.

No Warranty or Liability

The information presented herein is intended for general circulation and does not constitute investment, legal, accounting, tax or financial advice. It does not take into account the specific investment objectives, financial situation or particular needs of any person, and any information contained herein should be verified independently, taking into account, the specific investment objectives, financial situation or particular needs of the investor, before the investor makes a commitment to transact in any investment.

Although information presented in this document has been obtained or derived from sources believed to be correct and reliable, Saxo makes no warranty or accepts any liability of any kind as to its accuracy, adequacy, reliability, timeliness or reasonableness of such information. You assume all risks for any reliance on the information presented herein.

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