Trading futures and options involves substantial risk of loss and is not suitable for all investors.
There are no guarantees of profit no matter who is managing your money. Past performance is not necessarily indicative of future results.
The risk of loss in trading commodity interests can be substantial. You should, therefore, carefully consider whether such trading is suitable for you insight of your financial condition. In considering whether to trade or to authorize someone else to trade for you, you should be aware of the following:
- If you purchase a commodity option, you may sustain a total loss of the premium and all transaction costs.
- If you purchase or sell a commodity futures contract or sell a commodity option, you may sustain a total loss of the initial margin funds or security deposit and any additional funds that you deposit with your broker to establish or maintain your position.
- If you purchase a commodity option, you may sustain a total loss of the premium and all transaction costs.
- If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice, in order to maintain your position. If you do not provide the requested funds wishing the prescribed time, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account.
Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market makes a “limit move.”
The placement of contingent orders by you or your trading advisor, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.
A “Spread” position may not be less risky than a simple “long” or “short” position.
The high degree of leverage that is often obtainable in commodity interest trading can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
A complete discussion of fees and charges are disclosed in the risk management consultation agreement. Additional fees may be charged by the introducing broker and/or the futures commission merchant and by exchanges.
