Risk Warning

Risk Warning

This notice is provided to you in compliance with FSA requirements because you are proposing to undertake dealings in Contracts for Difference and Spread Bets. This notice cannot and does not disclose or explain all of the risks and other significant aspects involved in dealing in Contracts for Difference and Spread Bets. Engaging in these types of transactions can carry a high risk. You should not engage in this form of trading unless you understand the nature of the transaction you are entering into and the true extent of your exposure to the risk of loss. Your profit or loss will vary according to the extent of the fluctuations in the price of the "underlying markets".

For many members of the public, these transactions are not suitable; you should, therefore, consider carefully whether they are suitable for you in the light of your circumstances and financial resources. In considering whether to engage in this form of trading, you should be aware of the following:

  1. The high degree of "gearing" or "leverage" is a particular feature of this type of transaction. This stems from the margining system applicable to such trades which generally involves a comparatively modest deposit or margin in terms of the overall contract value, so that a relatively small movement in the underlying market can have a disproportionately dramatic effect on your trade. If the underlying market movement is in your favour, you may achieve a good profit, but an equally small adverse market movement can not only quickly result in the loss of your entire deposit, but may also expose you to a large additional loss unless you enter a limited liability contract (place a guaranteed stop loss) with us, where we offer such facility.
  2. Foreign markets will involve different risks from UK markets. In some cases risks will be greater. The potential for profit or loss from transactions on foreign markets or in foreign currency denominated markets will be affected by fluctuations in foreign exchange rates.
  3. You may be called upon to deposit substantial additional margin, at short notice, to maintain your trade. If you do not provide such additional funds within the time required, your trade may be closed at a loss and you will be liable for any resulting deficit.
  4. CFD transactions will not be undertaken on a recognised or designated investment exchange. During normal market hours and outside normal market hours, we will execute CFD Orders and Trades at our price. We act as a "market maker" in these CFDs in and out of market hours (see our Terms of Business for market hours.) Closing trades will be traded at the price dictated by the spread quoted at the time of closing, irrespective of the spread at the time of the opening trade, which may be larger or smaller. No guarantee is given as to the spread at the time of closing. All CFD trades opened with us must be closed with us and cannot be closed with any other entity.
  5. Where entering into such transactions, we must do so under a two-way customer agreement (i.e. our Terms of Business) pursuant to the FSA Conduct of Business rules unless exempted from doing so. You should satisfy yourself that dealing is conducted throughout in strict conformity with that customer agreement and report to the FSA if you have reason to believe it is not.
  6. Prior to placing trades, you should ensure that you understand all charges for which you will be liable.
  7. CFDs and Spread Bets are higher risk investments than ordinary share dealing, as gearing can lead to unlimited losses. However, to limit potential losses and bring peace of mind, clients trading through us have access to both a simple stop loss facility and, where we offer this, a guaranteed stop loss facility. Both simple and guaranteed stop loss facilities are only available at our absolute discretion. For further detail in relation to stop losses please refer to our Dealing System. A stop loss order allows you to set a price which if breached will automatically trigger a sell order (for long positions) or buy order (for short positions) to close your current position. This facility is available at our discretion when placing the deal either through the online platform or over the telephone. With a simple stop loss if the share or index breaches your stop loss then your order will be executed when we are reasonably able to do so. This may mean the order is executed at less than your stop loss price in the case of a long position or more than the stop loss price in the case of a short position. However you can use a guaranteed stop loss on selected underlying products. As it suggests this is a stop loss order that is guaranteed to be executed at the price you specify, even if the price of the underlying product makes a sudden movement and never actually trades at the price that you specified, your position will still be closed at your chosen price. This may not be the case with a simple stop loss. The guaranteed stop loss facility may be available through our on line Dealing System or via telephone on such underlying products as we determine in our discretion. You may also be required to pay a small premium for the guaranteed stop loss facility when placing the deal but many would consider this a small price to pay when compared to the cost of an unpredictable loss. It is important to remember that we allow you to trade certain CFDs outside of normal market hours. For instance the FTSE 100 Index CFD can be traded between 9am and 5.30pm when the normal market hours are 8am until 4.30pm. The prices quoted for Index CFDs are our prices and are based on market movements. Outside normal market hours the prices are based on the interpretation of how the market may move if it were open. This means simple stop losses and guaranteed stop losses could be triggered outside of normal market hours based on movements in the house price for the index. For specific information about our trading hours for each instrument, please refer to the Dealing System.
  8. Under certain trading conditions it may be difficult or impossible to liquidate a position. This may occur, for example at times of rapid price movement if the price rises or falls in one trading session to such an extent that trading is restricted or suspended.
  9. We are prohibited under our FSA permissions from providing you with investment advice relating to investments or possible transactions in investments or from making investment recommendations of any kind. This prohibition is subject to an exception where advice given amounts to the giving of factual market information or information, in relation to a transaction about which you have enquired, as to transaction procedures, potential risks involved and how those risks may be minimised.
  10. We are required to hold your money in segregated accounts in accordance with the regulations of FSA, but this may not afford complete protection.
  11. If you deposit collateral as security with us, you should ascertain from us how your collateral will be dealt with.
  12. Our insolvency or default may lead to positions being liquidated or closed out without your consent. In certain circumstances, you may not get back the actual assets which you lodged as collateral and you may have to accept any available payment in cash.
  13. If you have reason to believe that we are not acting in accordance with representations that we have made to you, the terms of your customer agreement or the rules of the FSA, you should report it to the Financial Services Authority Consumer Helpline, 25 The North Colonnade, Canary Wharf, London E14 5HS telephone number 020 7066 1000.
  14. We are covered by the Financial Services Compensation Scheme. In the unlikely event that we were to face liquidation and could not meet our obligations, retail clients may be entitled to compensation from the scheme. Most types of investment business are covered for 100% of the first £50,000, so the maximum compensation is £50,000. Further information about compensation arrangements is available from the Financial Services Compensation Scheme.

Complaints Policy

If you have a complaint about our products or services, you should contact us as soon as possible. It is our policy to handle complaints fairly, consistently and promptly.

A copy of our internal complaints procedures is available upon request from our Compliance Officer. Email Compliance Department

Communicating with Us

We will communicate with you orally and in writing in English. If you wish to communicate with us, you will need to do so in English unless we agree otherwise.

Conflicts of Interest

We are committed to treating our customers fairly. However, we and our connected persons may, when dealing with you, have interests which are, or may be, in conflict with your own interests or owe duties to third parties which are in conflict with your own interests. In such circumstances, we will have regards to your interests in the manner set out in our Conflicts Policy.

Our Costs and Charges

Our costs and charges for entering into orders and trades with us in CFDs, Spread Bets and FX are as set out on our Fees List and the prices at which you can trade in CFDs and FX with us are set out on our dealing system from time to time.

Execution Policy

The manner in which we will execute orders and trades with you is set out in our Execution Policy, as amended from time to time. To see the maximum spreads which we will charge for the purposes of the Execution Policy, click on Market Information.