DERIVATIVES RISK DISCLOSURE
The risk of loss in trading in shares, futures contracts, contracts for difference or other leveraged markets and derivatives can be substantial. You should therefore carefully consider whether that kind of trading is appropriate for you in the light of your financial circumstances. In deciding whether or not you will become involved in that kind of trading, you should be aware of the following matters
You could sustain a total loss of the initial margin funds that you deposit with your broker to establish or maintain a position either on exchange or off exchange. If the market moves against your position, you may be required, at short notice, to deposit with your broker additional funds in order to maintain your position. Those additional funds may be substantial. If you fail to provide those additional funds within the required time, your position may be liquidated at a loss and in that event you will be liable for any shortfall in your account resulting from that failure. Under certain conditions, it could become difficult or impossible for you to liquidate a position (this can, for example, happen when there is a significant change in prices over a short period).The placing of contingent orders (such as a “stop-loss” order) may not always limit your losses to the amounts that you may want. Market conditions may make it impossible to execute such orders.A “spread” position is not necessarily less risky than a simple “long” or “short” position.The high degree of leverage that is obtainable in derivatives trading because of small margin requirements can work against you as well as for you. The use of leverage can lead to large losses as well as large gains.
This statement does not disclose all of the risks and other significant aspects involved in trading derivatives. You should therefore study derivatives trading carefully before becoming involved in it.
FOREIGN DERIVATIVES RISK DISCLOSURE
The risk in trading derivatives on non-Australian exchanges or over the counter based on non-Australian financial instruments can be substantial. Therefore you should carefully consider whether such trading is suitable for you in light of your financial condition. In considering whether to trade foreign derivatives, you should be aware of the following:
Participation in foreign derivatives markets involves the execution and clearing of trades on or subject to the rules of a foreign exchange. The activities of foreign exchanges are outside the regulation of the Australian Securities and Investment Commission and Australian Regulatory Bodies do not have the power to compel enforcement of the rules of a foreign exchange or any applicable foreign law. Protective provisions of Australian legislation such as the Corporations Law may not apply to clients who trade foreign derivatives. Therefore you should obtain as much information as possible from your broker concerning the foreign rules, particularly as regards protection of your funds, which will apply to foreign derivatives transactions that may be carried out on your behalf. You should also be aware that the price of any foreign derivative and, therefore, the potential profit and loss therein, may be affected by any variance in the foreign exchange rate between the time your order is placed and the time it is liquidated, offset or exercised.
PAST PERFORMANCE WARNING
The performance of individual traders varies significantly and will depend on factors such as but not limited to account size, leverage used, slippage incurred, brokerage paid, the level of diversification, general trading conditions of the markets chosen and particularly the discipline of the trader to follow the rules of the trading system.
Gerling & Company Pty Ltd provide on a regular basis market commentaries and investment / trading recommendations in shares and derivatives and keep track of its performance on downloadable spreadsheets. The figures provided are not necessarily actual trade prices but price levels that a trader could have achieved on average. Individual execution prices may vary from trader to trader. Not all clients of Gerling & Company Pty Ltd take all recommendations and as such the performance quoted does not necessarily represent performance of an individual client. Some clients may have achieved losses when our recommendations resulted in gains.
PROSPECTIVE TRADERS ARE CAUTIONED THAT THE AVERAGE RESULTS ARE NOT NECESSARILY INDICATIVE OF THE RESULTS WHICH MAY BE ACHIEVED IN THE FUTURE. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. NO REPRESENTATION IS MADE ABOUT FUTURE PROFITS.
GENERAL ADVICE WARNING
THE PROVIDING ENTITY ONLY GIVES GENERAL ADVICE. GENERAL ADVICE IS DEFINED AS FINANCIAL PRODUCT ADVICE WHICH IS NOT PERSONAL ADVICE. IN PROVIDING THE GENERAL ADVICE THE CLIENT’S PERSONAL FINANCIAL SITUATION, OBJECTIVES AND NEEDS (INCLUDING ATTITUDE TO RISK) HAVE NOT BEEN CONSIDERED BY THE PROVIDING ENTITY. FURTHERMORE, NO CLIENT SHOULD EXPECT THE PROVIDING ENTITY TO HAVE CONSIDERED SUCH MATTERS. THE CLIENT IS ENCOURAGED TO SEEK PERSONAL ADVICE FROM A LICENCED FINANCIAL ADVISOR BEFORE USING ANY SERVICES OR PRODUCTS FROM THE PROVIDING ENTITY.