HF Markets (Europe) Ltd

RISKS ASSOCIATED WITH TRANSACTIONS IN

Table of Contents

1. Introduction .......................................................................................................................................... 3

2. Definition .............................................................................................................................................. 4

3. Leverage ................................................................................................................................................ 4

4. Volatility of price and limitation on the available market .................................................................... 4

5. Total Loss might exceed the Initial Amount ......................................................................................... 5

6. Additional obligations ........................................................................................................................... 6

7. Margin requirements ............................................................................................................................ 7

8. Review ................................................................................................................................................... 8

9. Client Declaration.................................................................................................................................. 8

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Regulated by the Cyprus Securities and Exchange Commission (CySEC)
License Number 183/12 - Registration Number HE 277582
 HF Markets (Europe) Ltd
Risks Associated with Transaction in Derivative Financial Instruments

1. Introduction

1.1. HF Markets (Europe) Ltd (hereinafter the “Company”) which is a member of HF Markets
Group, is incorporated under the laws of the Republic of Cyprus with Registration No. HE
277582 under the Department of Registrar of Companies and Official Receiver
(www.mcit.gov.cy). The Company is authorised and regulated by the Cyprus Securities and
Exchange Commission (“CySec”) to act as a Cypriot Investment Firm (License No. 183/12)
and to provide the Services specified in the Account Opening Agreement found on the
Company’s website, and operates under the Law 87(I)/2017 which provides for the
provision of investment services, the exercise of investment advice, the operation of
regulated markets and other related matters (the “Law”) which has implemented the
Markets in Financial Instruments Directive (EU Directive 2014/65/EU, MiFID II). The Law
144(I)/2007 as amended shall be followed to the extent it remains applicable after coming
into force of MiFID II.

1.2. This risk warning notice (herein the “Notice”) is provided to the Company’s Clients and any
Prospective Client who is willing to enter into an agreement with the Company for opening
a trading account with the Company, under the provisions of the Law as amended from
time to time.

1.3. The Clients and any Prospective Clients must read carefully this notice which is easily
accessible on the Company’s website before deciding to open a trading account with the
Company and before commencing any trading activity with the Company.

1.4. It is noted that this Notice and the General Risk Disclosure document found on the
Company’s website cannot and do not disclose or explain all of the risks and other
significant aspects involved in dealing in Derivative Financial Instruments offered by the
Company for (such as CFDs). The Notice was designed to explain in general terms the nature
of the risks involved when dealing in Financial Instruments on a fair and non-misleading
basis, according to the Law. The Client should be aware of all the risks associated with
trading in CFDs and seek advice and consultation from an independent financial advisor if

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Regulated by the Cyprus Securities and Exchange Commission (CySEC)
License Number 183/12 - Registration Number HE 277582
 HF Markets (Europe) Ltd
Risks Associated with Transaction in Derivative Financial Instruments

he has any doubts. The Company does not provide such advice. If the Client does not
understand the risks involved in trading in CFDs, he should not trade at all.

2. Definition

2.1. “CFDs” or “Contract for Differences” is an agreement between two parties to exchange
the difference between the opening price and closing price of a contract including but not
limited to shares, currencies, commodities and index. CFDs provide Investors with all the
benefits and risks of owing a security without actually owing it.

3. Leverage

3.1. The Client and/or any Prospective Client thereof fully acknowledge and accept that,
regardless of any information which may be offered by the Company, the value of the CFDs
provided by the Company may fluctuate downwards or upwards and it is not unlikely that
the investment may become of no value. This is due to the high degree of “gearing” or
“leverage” feature of CFDs. 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 trades.

4. Volatility of price and limitation on the available market

4.1. CFDs provided by the Company are derivative financial instruments, the price of which is
derived from the price of the Underlying asset, which the CFD refers to. Derivative Financial
instruments and the relevant markets can be highly volatile. The prices of CFDs and the
Underlying assets may be volatile and unpredictable and may fluctuate rapidly and over
wide ranges and may reflect unforeseeable events or changes in conditions, none of which
can be controlled by the Company or the Client. Those movements will affect the
Company’s prices, whether or not the Client can open or close a position and the price at
which the Client can do so. So, under certain market conditions, it may be impossible to
execute any type of Order at the declared price. Therefore, even ‘stop-loss orders’,

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Regulated by the Cyprus Securities and Exchange Commission (CySEC)
License Number 183/12 - Registration Number HE 277582
 HF Markets (Europe) Ltd
Risks Associated with Transaction in Derivative Financial Instruments

whereby the Client’s trade will be executed only when the CFD you want to buy or sell
reaches a particular price (the stop price), cannot guarantee the limit of loss. ‘Stop-loss
orders’ are not guaranteed to be filled at the price you state. Once the ‘stop-loss orders’
has been triggered, it turns into a market order, which is filled at the best possible price.
This price may be lower than the price specified by the ‘stop-loss orders’. The prices of CFDs
will be influenced by, amongst other things, changing supply and demand relationships,
governmental, agricultural, commercial and trade programs and policies, national and
international political and economic events and the prevailing psychological characteristics
of the relevant market place.

4.2. Some of the CFDs underlying assets may not become immediately liquid as a result of
reduced demand for the underlying instrument and Client may not be able to obtain the
information on the value of these or the extent of the associated risks.

4.3. Trading in CFDs is speculative and involves a high degree of risk. In particular because it will
be conducted using a margin (which covers only a small percentage of the value of the
underlying asset being traded), as such, even small price changes in the underlying assets
of CFDs can result in significant losses. You should be aware that by trading with CFDs you
may lose the margin held at the Company that serves for the purposes of collateral for
opening and maintaining your trading positions.

4.4. Transactions in the derivative Financial Instruments provided by the Company are not
undertaken on a recognized exchange, rather they are undertaken through the Company’s
Electronic Trading Platform and, accordingly, they may expose you to greater risks than
regulated exchange transactions. The terms and conditions and trading rules are
established solely by the counterparty, which in this case is the Company. You may be
obliged to close an open position of any given Financial Instrument during the opening
hours of the Company’s Electronic Trading Platform.

5. Total Loss might exceed the Initial Amount

5.1. The Client acknowledges and understands that risk of loss arising from trading in CFDs can
be substantial and the Client might lose more than the Initial Amount and any additional
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Regulated by the Cyprus Securities and Exchange Commission (CySEC)
License Number 183/12 - Registration Number HE 277582
 HF Markets (Europe) Ltd
Risks Associated with Transaction in Derivative Financial Instruments

amounts, including the Margin Requirement as explained below in paragraph 7. While CFD
trading typically only requires depositing a small percentage of the total trade volume (the
margin requirement), profits and losses can quickly exceed the Margin Requirement,
requiring the margin requirement to be adjusted at the initial amount.

5.2. The Company offers negative balance protection which, in the event that a negative
balance occurs in the Client’s Trading account, the Company will make a relevant
adjustment of the full negative amount.

6. Additional obligations

6.1. The Client and/or Prospective Client shall be obliged to obtain details of all commissions
and other charges for which he will be liable, before he begins trading with the Company.
Such information can be found on the Company’s Website(s) and/or to the uploaded legal
documentation on the Company’s website(s). If any charges are not expressed in money
terms (but, for instance, as a dealing spread, the Client and/or Prospective Client should
obtain a clear written explanation, including appropriate examples, to establish what such
charges are likely to mean in specific money terms.

6.2. When the Client engages in CFD trading, the Client is placing a trade in relation to
movements of prices set by the Company. Prices quoted to the Client by the Company will
include a spread, mark-up, or mark-down when compared to prices that the Company may
receive or expect to receive if it were to cover transactions with the Client by a trade in the
interbank market or with another counterparty. The Client is advised by the Company that
the total impact of spreads may be significant in relation to the size of the margin the Client
deposits and may make it more difficult for the Client to realise a profit from the Client’s
trading. The Client should carefully consider the effect of spreads, mark-ups, or mark-
downs on the Client’s ability to profit from trading.

6.3. The value of open positions in the CFDs provided by the Company is subject to financing
fees. The price of long positions in Financial Instruments is reduced by a daily financing fee
throughout the life of the CFD. Conversely, the price of short positions in CFDs is increased
by a daily financing fee throughout its life. Financing fees are based on prevailing market
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Regulated by the Cyprus Securities and Exchange Commission (CySEC)
License Number 183/12 - Registration Number HE 277582
 HF Markets (Europe) Ltd
Risks Associated with Transaction in Derivative Financial Instruments

interest rates, which may vary over time. Details of daily financing fees applied are available
on the Company’s Website(s).

6.4. The Client should take reasonable care to maintain sufficient available funds to avoid
negative account equity due to position size and overnight financing fees, especially when
trading CFDs on cash indices and CFDs on shares where financing fees are being applied to
reflect corporate actions.

6.5. The Client should be aware that his trades in CFDs may be or become subject to tax and/or
any other duty for example because of changes in legislation or the Client’s personal
circumstances. The Company does not warrant that no tax and/or any other stamp duty
will be payable. The Client will be responsible for any taxes and/or any other duties which
may accrue in respect of his trades.

7. Margin requirements

7.1. The Client should be aware of the implications of CFD Transactions and in particular the
specific margin requirements which are applied thereto. The Client is required to deposit
funds in his trading account in order to open a position and the funds should reflect the
specific margin required. The Client shall be informed of the specific Margin requirement
for each individual account before he begins trading; such information is available to the
Client upon completion of the necessary information required by the Company to approve
him as a Client of the Company.

7.2. Margin requirements will depend on the Underlying asset of the CFD as showed in
Company’s website(s), level of leverage chosen and the value of position to be established.

7.3. The Client shall not be able to hedge his open position, if the Margin Level on his trading
account is equal or less than 100%.
7.4. The Company will not notify the Client of any ‘Margin Call’ to sustain a loss making position.

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Regulated by the Cyprus Securities and Exchange Commission (CySEC)
License Number 183/12 - Registration Number HE 277582
 HF Markets (Europe) Ltd
Risks Associated with Transaction in Derivative Financial Instruments

8. Review

8.1. The Company reserves the right to review and/or amend its Risk Disclosure statements, at
its sole discretion, whenever it deems necessary, without prior notice to the Client.

9. Client Declaration

9.1. The Client hereby acknowledges, confirms and accept that by entering into an Agreement
with the Company and every time he decides to place an Order in a CFD, that he runs a high
risk of incurring losses and damages as a result and declares that he is willing to proceed
with this kind of trading and undertakes such risks.

WARNING: It is emphasized that dealings in (CFDs) is not be appropriate for all Clients. The
Client should not engage in any dealings directly or indirectly in CFDs unless he knows and
understands the features and risks involved in them and that he may lose entirely all of his
money and also be imposed extra charges.

Version: 2024/01

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Regulated by the Cyprus Securities and Exchange Commission (CySEC)
License Number 183/12 - Registration Number HE 277582