You are considering dealing with us in Leverage Bullion Trading ("LBT") which we term "Margined Trading". This disclosure is designed to explain in general terms the nature of and risks particular to Margined Trading to help you to take investment decisions on an informed basis. However, please note that this disclosure cannot and does not explain all the risks.
Margined Trading carries a higher risk of loss than trading many traditional instruments. You should not engage in Margined Trading unless you know and understand the features and risks of the Margined Trading you wish to carry on and are also satisfied that Margined Trading is suitable for you in light of your circumstances and financial resources.
In considering whether to engage in Margined Trading, you should be aware of the following:
Risks and Leverage
- A high degree of "gearing" or "leverage" is associated with Margined Trading. This stems from the margining system applicable to Margined Trades, which generally involves a comparatively modest deposit of the overall contract value to open a Margined Trade. This can work for you and against you. A small price movement in your favour can result in a high return on the money placed on deposit; however, a small price movement against you may result in substantial losses, possibly more than the money placed on deposit. Prices can move quickly. Placing contingent orders, such as “Stop loss” or “Stop limit” order, will not necessarily limited losses to the intended amounts. Market conditions may make it impossible to execute such orders.
- You may be called upon to deposit substantial additional margin, at short notice, to maintain your Margined Trades. If you do not do so within the time required, your Margined Trades may be closed at a loss and you will be liable for that loss.
Nature of Margined Trades
- Our trading terms and conditions explain in detail how Margined Trades operate.
- A Margined Trade is a trade speculating on price movements. Those prices are provided by market makers/counterparties. Whether you make a profit or loss will depend on the prices that the market makers/counterparties provide to us and fluctuations in the underlying financial instrument ("Underlying") to which your Margined Trade relates.
- Margined Trades can only be settled in cash.
- Margined Trades are legally enforceable.
- In certain circumstances your losses on a Margined Trade may be unlimited. For instance, if you short a market and the price rises, it is impossible to know the limit of your potential losses until you end the Margined Trade. You must ensure that you understand the potential consequences of any particular Margined Trade and be prepared to accept that degree of risk.
- Margin Trades are executed by the market makers/counterparty. If you open a Margined Trade with us, you have to close it with us.
- You will not acquire the Underlying nor any rights or delivery obligations in relation to the Underlying.
- Margined Trades which settle in a currency other than your base currency may be affected by the conversion of any profit or loss into your base currency.
As mentioned above whether you make a profit or a loss will depend on the prices that the market makers/counterparties provide to us and fluctuations in the price of the Underlying to which your Margined Trade relates. Neither you nor we will have any control over movements in the Underlying. Movements in the Underlying can be volatile and unpredictable. Movement of the Underlying may affect your ability to close a Margined Trade, making it difficult or impossible to close a Margined Trade. This may occur, for example, if the spread of the Underlying is widened or restricted trading activities from the market makers/counterparties.
Electronic 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 and us. Such limits may vary and you should refer to the customer agreement that you have signed.
Trading through electronic system, you will be exposed to risk 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 instruction or is not executed at all.
Conflict of Interest
We are devoting to provide excellent services to meet customers’ demand. At the same time, when you are trading with us, there are circumstances may affecting your interest. We always review and assess these affecting factors and to ensure the transparency and fairness to the customers of M Falconer. These factors are:-
- We are the market maker/counterparty to part or all Transactions entered into under the Customer Agreement and, as such, M Falconer’s interest may be in conflict of interest with its clients.
- When trading with us, such transactions are known as OTC transactions. All positions entered with us must be closed with us and cannot be closed with any other entity. Prices need not be quoted by us, based on best execution policies applicable in the market.
- Clients may have been introduced to us by a third party who receives remuneration from clients’ trades.
- Quoting Errors. Should a quoting error occur (Including responses to Customer requests), M Falconer is not liable for any resulting errors in Account balances and reserves the right to make necessary corrections or adjustments to the relevant Account. Any dispute arising from such quoting errors will be resolved on the basis of fair market value, as determined by M Falconer in its sole discretion and acting in good faith, of the relevant market at the time such an error occurred. In cases where the prevailing market represents prices different from the prices M Falconer has posted on our online trading system, M Falconer will attempt, on a best effort basis, to execute Trades on or close to the prevailing market price. These prevailing market prices will be the prices, which ultimately reflected on the Customer statements. This may or may not adversely affect the Customer’s realized and unrealized gains and losses.
M Falconer does not direct the information that is contained on this website to residents of any particular country outside Hong Kong and such information is not intended for the use of, or distribution by, any person in any country or jurisdiction where the use or distribution of such information would be in breach of any applicable local regulation or law. It is therefore your sole responsibility to ensure that you understand and comply fully with any laws or regulations relevant to you in your own country to placing any trade with M Falconer.
Disclaimer and Limitation of Liability
The content of this website have been prepared by M Falconer to provide general information to assist customers to make their investment decisions. Nothing in this website is to be constructed as an invitation or advertisement to engage in the service or products provided by M Falconer. M Falconer has taken reasonable measures to ensure the accuracy of the information on this website. However, M Falconerdoes not guarantee its accuracy, and will not be liable for any loss or damage that may cause directly or indirectly from the information of this website includes your inability to access, delay or failure of the transmission or the receipts of any notification or message sent through this website. Delayed Price Data provided in this website is for reference only and customer are recommended not to trade on the price data and M Falconerwill not liable for any losses incurred by the use of this data.
You should not proceed to trade Leverage Bullion Trading unless you have carefully considered that it is appropriate for you and are satisfied with these terms. Therefore, you may wish to seek independent advice before making a commitment to enter Leverage Bullion Trading. In the event that you choose not to seek independent advice, you should carefully consider whether such trading is suitable in the light of your investment objectives, financial resources and risk profile. You should also carefully read and understood all disclaimers and information in M Falconer’s Customer Agreement before commencing trading.