This notice (Risk Warning Notice) is provided to you as required by the rules of the Financial Conduct Authority (FCA).
This Risk Warning Notice relates to CFD trading in general. If you choose to engage MB Capital in the provision of advisory services in relation to CFD trades we will send you additional information and a more detailed risk warning relating to that process. Please speak with your usual contact at MB Capital immediately if you have engaged us to provide such services and have not received, or do not have a copy of the additional information and notices.
This Risk Warning Notice cannot and does not disclose or explain all of the risks and other significant aspects involved in trading in “contracts for difference” (CFDs). Engaging in these types of transaction can carry a high risk to your capital. You should not engage in trading CFDs and other financial derivative products unless you understand the nature of CFD trading, how it operates, how you make a profit or a loss and the extent of your exposure to risk and loss. Note in particular that your losses can be unlimited and no deposit or other amount you have paid will limit your losses.
Past performance is not necessarily a guide to future performance. The value of shares may rise as well as fall due to the volatility of world markets, economic conditions/data and/or changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily receive back the amount you invested and may be liable for more than the initial amount paid or deposited.
You should be satisfied that CFD trading is suitable for you in the light of your circumstances and financial position. If you are in any doubt you should seek independent advice.
Different products involve different levels of exposure to risk and in deciding whether to trade in such instruments you should be aware of the following points:
The value of an investment in a CFD may be affected by a variety of factors, including but not limited to, price volatility, market volume, foreign exchange rates and liquidity.
You will engage in trading in CFDs with an approved third party broker with which you hold a trading account. When you engage in CFD trading you are placing a trade in relation to movements of prices set by the broker by reference to prices of the underlying securities. Whether you make a profit or a loss depends on how the price has moved between when you opened your trade and when you closed your trade.
Your trades with the broker will be subject to specific terms and conditions. It is in your own best interests to read and understand them before you engage in CFD trading. CFDs are a short term trading tool and commission is charged on the leveraged amount (not the deposit) and therefore costs can build up when frequently traded. You should evaluate potential losses against affordability.
Although CFD trading can be utilised for the management of investment risk, CFD trading is unsuitable for many investors as it can carry a high degree of risk. The ‘gearing’ or ‘leverage’ often obtainable in trading CFDs means that a small deposit or down payment can lead to large losses as well as gains. It also means that a relatively small market movement can lead to a proportionately much larger movement in the value of your position, and this can work against you as well as for you. Such transactions may have to be ‘margined’, and you should be aware of the implications of this, which are set out in paragraph 3 below.
It also means that a relatively small market movement can lead to a proportionately much larger movement in the value of your position, and this can work against you as well as for you. Such transactions may have to be ‘margined’, and you should be aware of the implications of this, which are set out in paragraph 3 below.
2. Foreign markets
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.
CFDs and other financial derivative products are ‘margined’, and require you to make a series of payments against the contract value, instead of paying the whole contract value immediately. Changes to the rates of initial margin and/or notional trading requirements at any time, may also result in a change to the margin.
4. Off-exchange transactions
When trading CFDs, you will be entering into off-exchange (OTC) derivative transactions. Transactions in off-exchange derivatives may involve greater risk than investing in on-exchange derivatives because there is no exchange market on which to close out an open position. It may be impossible to liquidate an existing position, to assess the value of the position arising from an off-exchange transaction or to assess the exposure to risk.
5. Suspensions of trading
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 for the underlying rises or falls in one trading session to such an extent that trading in the underlying is restricted or suspended.
Disclaimer The materials contained herein are for information purposes only and do not constitute an offer to sell or a solicitation of an offer to purchase any interest in any investments offered by MB Capital Limited or its affiliates. MB Capital Limited is authorised and regulated by the Financial Conduct Authority (the ‘FCA’). The information contained herein is directed inside and outside the United Kingdom, and it is not directed at any persons in the United States or any other jurisdiction where it would be unlawful to access this information.
The investments and services to which this publication relates are only available to persons with a categorisation as either a retail or professional client or an eligible counterparty.
The performance information (including any expression of opinion or forecast) herein reflects the most-up-to date data at the time of production and publication made in good faith on the basis of publically available information or on sources believed by MB Capital Limited to be reliable, but not liable, guaranteed as to its accuracy or completeness for any such information. Returns are subject to change and may be amended. Past performance is not a reliable indicator of future performance.
Notwithstanding any statement herein, MB Capital Limited does not exclude or restrict any duty or liability that it has to its clients under the regulatory or legal system in the United Kingdom.
Risk Warning Notice: Contracts For Difference may be subject to rapid and unexpected price movements and past performance is not necessarily a guide to future performance. Trading in these markets is generally considered to be suitable only for the more experienced investor as it poses a risk of loss to your capital. An investor may not receive back the amount of their original investment and in certain circumstances may be liable for a sum that is greater than their original investment. Please read through our risk warning at the end of our brochure. Tax treatment depends on your individual circumstances and may be subject to change in the future. If in any doubt please seek further independent advice.
MB Capital Limited. Registered in England and Wales No. 06948349. Registered office: Level 30, The Leadenhall building, 122 Leadenhall Street, LONDON, EC3V 4AB
MB Capital Limited is authorised and regulated by the Financial Conduct Authority (FCA) FCA Register