This brief statement does not disclose all of the risks and other significant aspects of trading foreign exchange contracts. In light of these risks, Client should undertake such transactions only if Client understands the nature of the contracts and contractual relationships into which Client is entering into and the extent of Client’s exposure to risk. Trading in foreign exchange contracts may not be suitable for some customers. Client should carefully consider whether trading is appropriate for Client in light of Client’s experience, objectives, financial resources and other relevant circumstances.
1. Effect of "Leverage" or "Gearing". Foreign exchange contracts carry a high degree of risk. The amount of initial margin is small relative to the value of the foreign exchange contract so that transactions are “leveraged” or “geared”. A relatively small market movement may have a proportionately larger impact on the funds Client has deposited or will have to deposit. This may work against Client as well as for Client. Client may sustain a total loss of initial margin funds and any additional funds deposited with the firm to maintain Client’s position.
2. Risk-reducing orders or strategies. Placing contingent orders, such as “stop-loss” or “limit” orders, particularly in volatile market conditions, will not necessarily limit Client’s losses to the intended amounts, since market conditions may make it impossible to execute such orders. Strategies using combinations of positions, such as “spread” and “straddle” positions may be as risky as taking simple “long” or “short” positions.
3. Charges. Before Client begins to trade, Client should obtain a clear understanding of all charges for which Client may be liable. These charges will affect Client’s net profit (if any) or increase Client’s loss.
4. Electronic trading. Trading on an electronic trading system may differ not only from trading in an open-outcry market but also from trading on other electronic trading systems. If Client undertakes transactions on an electronic trading system, Client will be exposed to risks associated with the system including any failure of hardware and software. The result of any system failure may be that Client’s order is either not executed according to Client’s instructions or not executed at all. Since XCOQ does not control signal power, its reception or routing via Internet, configuration of Client’s equipment or reliability of its connection, XCOQ cannot be responsible for communication failures, distortions or delays when trading on-line (via Internet). In no event shall XCOQ be liable for speculative or expectancy damages for potential future lost profits.
5. Limitation of liability. Client accepts any trading system provided by XCOQ "as is," and without warranties, express or implied, including, but not limited to, the implied warranties of merchantability or fitness for a particular use, purpose or application; timeliness; freedom from interruption; or any implied warranties arising from trade usage, course of dealing or course of performance. Under no circumstances shall XCOQ be liable for any punitive, indirect, incidental, special or consequential loss or damages, including loss of business, profits or goodwill. XCOQ shall not be liable to Client by reason of delays or interruptions of service or transmissions, or failures of performance of XCOQ or its affiliate systems, regardless of cause, including, but not limited to, those caused by hardware or software malfunction; regulatory action; acts of god; war, terrorism, or our intentional acts. Client recognizes that there may be delays or interruptions in the use of our system, including, for example, those caused intentionally by XCOQ for purposes of servicing the system. XCOQ does not guarantee that alternative trading arrangements will be available at a particular time and XCOQ will not be held liable for delays in entering an order.
6. Margin.XCOQ’s margin policies require that Client’s account be properly margined at all times. Failure to meet margin requirements may result in the liquidation of any open positions with a resultant loss. XCOQ reserves the right to liquidate all positions without notice if an account falls below Client’s minimum margin requirement, in accordance with XCOQ’s margin call policy.
7. Quoting errors. Should quoting errors occur, which may include, but are not limited to, a mistype of a quote by XCOQ, a quote which is not representative of fair market prices, an erroneous price quote from a XCOQ employee, such as but not limited to a wrong big figure quote or an erroneous quote due to failure of hardware, software or communication lines or systems and/or inaccurate external data feeds provided by third-party vendors, XCOQ will not be liable for the resulting errors in account balances. The foregoing list is not meant to be exhaustive and in the event of a quoting error, XCOQ reserves the right to make the necessary corrections or adjustments on the account involved. In the event of a system error where interest is not charged or credited as scheduled, XCOQ reserves the right to apply the missed interest to the account at any time.
8. Third-Party Authority. In the event that Client grants trading authority or control over Client’s account to a third-party trading advisor, such as a Money Manager, whether on a discretionary or non-discretionary basis, XCOQ shall in no way be responsible for reviewing Client’s choice of such trading advisor, or for making any recommendations with respect thereto. XCOQ makes no representations or warranties concerning any trading advisor; XCOQ shall not be responsible for any loss to Client occasioned by the actions of the trading advisor; and XCOQ does not, by implication or otherwise, endorse or approve of the operating methods of any trading advisor. If Client gives a Money Manager authority to exercise any rights over Client’s account, Client does so at Client’s own risk. Client should regularly review the activity in Client’s account to ensure that Client approves of the transactions placed on Client’s behalf by Client’s Money Manager.
9. Disclosure Regarding Bankruptcy Protections. The transactions Client is entering into with XCOQ are not traded on an exchange. Client’s funds may not receive the same protections as funds used to margin or guarantee exchange-traded futures and options contracts, which receive a priority in bankruptcy. Since that same priority has not been given to funds used for off-exchange Forex trading and other online derivatives contracts or instruments, if XCOQ becomes insolvent and Client has a claim for amounts deposited or profits earned on transactions with XCOQ, Client’s claim may not receive a priority. Without a priority, Client is a general creditor and Client’s claim will be paid, along with the claims of other general creditors, from any monies still available after priority claims are paid. Even customer funds that XCOQ keeps separate from its own operating funds may not be safe from the claims of other general and priority creditors.
10. Volatile Market Conditions. Trading at times of extraordinarily volatile market conditions, e.g. key news announcements may expose the Client to additional risks, including the risk that the Client may not get the price him or her requests. XCOQ cannot and does not guarantee its prices in times of extraordinary market volatility.