Trading with PipIndex Capital Markets (the ‘Company’) carries a high degree of risk to Customer’s capital. The products offered by the Company are not suitable for everyone and it is therefore very important that Customers fully understand the risks involved with this type of trading activity. If Customers are in any doubt as to the appropriateness of any of the products or services offered by the Company they should seek independent, professional advice.
The Company operates an execution only service and does not provide investment advice. Customers are responsible for all financial losses that are incurred when trading with the Company.
Gearing and Leverage
Before opening a new trade with the Company, Customers will be required to deposit monies on account to cover the Initial Margin Requirement. Details of the deposit required for each and every trade can be found in the Market Information sections of the Company’s websites. The size of the deposit required to place a trade with the Company will usually be a proportion of the overall value of the trade. This means that Customers will be using gearing or leverage that can result in significant profits or losses accruing very quickly as a result of relatively small price movements in the Underlying Market. Customers may therefore sustain losses that are far greater than the size of their initial deposit and should only speculate with monies they can afford to lose.
The Company provides access to a number of risk management tools that can assist Customers with the management of some of these risks although it should be noted that the Company does not offer guaranteed Stop Loss Orders and so it is not possible to place an absolute limit on losses.
It is essential that all Customers monitor open trades on their account and that they are always in a position to deposit additional funds should open trades move against them.
Customers may rapidly lose substantially more on trades than the amount deposited to cover the Initial Margin Requirement and so may be required to deposit additional funds (Variation Margin) at short notice in order to maintain open positions.
Customer open positions are revalued continuously throughout each trading day with running profits and losses immediately reflected in the account. Accrued losses may require additional deposits to be made by the Customer at very short notice.
The Company may increase Initial Margin Requirements at any time which may result in Customers being required to deposit additional funds. Failure to meet a margin call may result in Customer open positions being closed in part or in full with no further reference to the Customer.
Over-the Counter Derivatives and Contract for Differences
When trading with the Company, Customers will be entering into an off-exchange transaction (also known as Over-the-Counter, or OTC). As a result Customers will enter into trades directly with the Company, who will be acting as principal throughout.
Whilst trades placed with the Company are off-exchange transactions, prices for these instruments are derived from the Underlying Market and so it is important to understand the contract specifications, trading hours, potential volatility, underlying liquidity and currency risk of any trade placed. In times of increased volatility or poor liquidity, Underlying Markets can Gap resulting in a sudden movement in prices from one level to another and so it is important for Customers to understand the potential impact of these price movements and the effect it can have on open positions and resting Orders.
Trades placed by Customers with the Company are not transferable and cannot be sold to Third Parties. This may result in a higher degree of risk than when investing in a financial instrument that is transferable or when dealing in an exchange based derivative. This also means that Customers may be exposed to the risk of default. In this unlikely event the Company is a member of the Financial Services Compensation Scheme and Customers classified as Retail Clients will be eligible for cover up to £50,000.
Customers are not entitled to any right to the underlying instrument or, when trading individual shares, to voting rights or any other rights that would normally be associated with the ownership of physical shares. Corporate actions by a company may result in the treatment the Customer receives from the Company being less advantageous than if the underlying instrument was owned.
When applying for an account with the Company, Customers are required to answer questions to allow the Company to assess the appropriateness of the products and services we provide and to warn if, on the basis of this information, the Company does not think that they are appropriate. If Customers choose to proceed with the application to open an account with the Company following this warning they agree they have done so using their own judgement and are aware of, and accept, the risks involved.
Commission and Charges
Customers should ensure that they are fully aware of all charges or commissions they will be liable for when trading with the Company.
Customers choosing to use the Company’s Trading Platform, Mobile or Tablet Applications must be aware that electronic communications can and do fail, can be delayed, may not be secure or reach their intended destination.