Futures Risk Disclosure Statement
THE RISK OF LOSS IN TRADING COMMODITY FUTURES CONTRACTS CAN BE SUBSTANTIAL. YOU
SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU
IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD BE AWARE OF
THE FOLLOWING POINTS:
| 1. |
You may sustain a total loss of the funds that you deposit
with your broker to establish or maintain a position in the
commodity futures market, and you may incur losses beyond these
amounts. 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 required funds within
the time required by your broker, your position may be liquidated
at a loss, and you will be liable for any resulting deficit
in your account. |
| 2. |
Under certain market conditions, you may find it difficult
or impossible to liquidate a position. This can occur, for
example, when the market reaches a daily price fluctuation
limit ("limit move"). |
| 3. |
Placing contingent orders, such as "stop-loss" or "stop-limit"
orders, will not necessarily limit your losses to the intended
amounts, since market conditions on the exchange where the
order is placed may make it impossible to execute such orders. |
| 4. |
All futures positions involve risk, and a "spread" position
may not be less risky than an outright "long" or "short"
position. |
| 5. |
The high degree of leverage (gearing) that is often obtainable
in futures trading because of the small margin requirements
can work against you as well as for you. Leverage (gearing)
can lead to large losses as well as gains. |
| 6. |
You should consult your broker concerning the nature of the
protections available to safeguard funds or property deposited
for your account. |
| ALL OF THE POINTS NOTED ABOVE APPLY TO ALL FUTURES
TRADING WHETHER FOREIGN OR DOMESTIC. IN ADDITION, IF YOU ARE
CONTEMPLATING TRADING FOREIGN FUTURES OR OPTIONS CONTRACTS,
YOU SHOULD BE AWARE OF THE FOLLOWING ADDITIONAL RISKS: |
| 7. |
Foreign futures transactions involve executing and clearing
trades on a foreign exchange. This is the case even if the
foreign exchange is formally "linked" to a domestic exchange,
whereby a trade executed on one exchange liquidates or establishes
a position on the other exchange. No domestic organization
regulates the activities of a foreign exchange, including the
execution, delivery, and clearing of transactions on such an
exchange, and no domestic regulator has the power to compel
enforcement of the rules of the foreign exchange or the laws
of the foreign country. Moreover, such laws or regulations
will vary depending on the foreign country in which the transaction
occurs. For these reasons, customers who trade on foreign exchanges
may not be afforded certain of the protections which apply
to domestic transactions, including the right to use domestic
alternative dispute resolution procedures. In particular, funds
received from customers to margin foreign futures transactions
may not be provided the same protections as funds received
to margin futures transactions on domestic exchanges. Before
you trade, you should familiarize yourself with the foreign
rules which will apply to your particular transaction. |
| 8. |
Finally, you should be aware that the price of any foreign
futures or option contract and, therefore, the potential profit
and loss resulting therefrom, may be affected by any fluctuation
in the foreign exchange rate between the time the order is
placed and the foreign futures contract is liquidated or the
foreign option contract is liquidated or exercised. |
| THIS BRIEF STATEMENT CANNOT, OF COURSE, DISCLOSE
ALL THE RISKS AND OTHER ASPECTS OF THE COMMODITY MARKETS |
|
