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Risk Disclosure Statement

RISK WARNING: Contracts for Difference (‘CFDs’) are crucial financial products, most of which have no set maturity date. A CFD position matures on date you opt to close an close your open position. CFDs, which are leveraged products, incur a high level of risks and can result in the loss of all of your invested capital. CFDs may or may not be suitable for all  the individuals. Before deciding to trade, you should ensure that you understand the risks involved and take into account your level of experience. You should seek independent advice, if necessary.

Scope of the Notice

1.1 The Risk Disclosure Notice (‘the Notice’) is provided to you in accordance with the regulation on the basis that you are proposing to trade with OTXforex in CFDs. 

1.2 It is be noted that it is impossible for the Notice all the risks involved in trading CFDs; you need to ensure that your decision is entirely made on an informed basis and as a minimum you should consider the following:

Product Description

2.1 A CFD is an agreement either to buy or either to sell a contract that reflects the performance of forex, precious metals, futures, and shares. The profit or loss of is determined by the difference between the price a CFD is bought at and sold price and vice versa. CFDs are traded on margin only and no physical delivery of either the CFD or underlying asset occurs anyway. It should also be noted that when you buy. i.e, CFDs on shares you cam merely speculate the share’s value to either to increase or decrease.

 2.2 CFDs fluctuate in value during the day. The price movements of CFDs are determined by a number of factors affecting but narrowed the availability of market information.

Performance

3.1 It is to note that the past performance of CFDs is not a useful indicator of future prediction or performance.

Risks Associated with Transactions in CFD's

4.1 Prior to trading CFDs, you need to ensure that you completely understand the risks involved in it. CFDs are leveraged products, therefore, they carry higher risks as well. The value of CFDs may go up or down depending on market conditions.

 4.2 CFDs are leveraged products so trading in CFD trading may not be suitable for you and bits of advice should be taken when necessary. The potential for profit must be balanced alongside risk management given the losses that may occur over a very small period of time when trading CFDs.

 4.3 You should not trade in CFDs before you completely understand the risks involved.

Capital Loss

5.1 CFDs, are leveraged products with a high level of risk and can result in loss of all of your invested capital or gain. However, it should be well noted that OTXforex operates on a ‘negative balance protection’ basis which means you can’t lose more than your initial investment.

Credit Risk

6.1 When trading CFDs and entering into an over-the-counter (‘OTC’) transaction; this implies that any position opened with OTXforex can’t be closed with any entity. OTC transactions involve greater risk compared to transactions of regulated markets. In OTC transactions there is no central counterparty, therefore, either of the party has the transaction bears certain credit risk.

Leverage

7.1 CFD trading allows you to trade with markets which you can start by paying only a small proportion of the total trade value. However, it is to be noted that leverage that a relatively small market movement may lead to a proportionately much larger movement compared to the value of your position. OTXforex offers flexible leverage ranging from 1:1 up to 1:500. In the context of Meta Trader 5, every Friday from 9PM until 11.59.59PM server time, or during any other time slot specified by OTXforex, the Firm sets a maximum leverage rate for opening a position of 1:100; if it occurs later, you shall be informed suitably.

 7.2 It is also to noted that the Firm will be monitoring the leverage registered your positions At all times the Firm reserves all right to devalue the leverage depending on your trading volume.

Margin Account and Other Requirements

8.1 You need to make sure that sufficient margin of your trading account, at all times, in order to maintain an open position. In addition, you are directed to analyze any open positions in order to avoid positions being closed due to the funds’ unavailability; it is to be noted that the Firm isn’t responsible for notifying you for any such instances at any time.

 8.2 At margin levels of 45% for OTX FOREX MetaTrader5, the Firm has the discretion to begin or closing positions starting from unprofitable one. Additionally, at margin levels of 40% (forty) for OTX FOREX MetaTrader5, the Firm shall automatically begin closing positions on market price, starting with most unprofitable one.

 8.3 Trading with additional software like Expert Advisor etc will be taken care on the sole discretion of OTX FOREX. If any abnormal trading patterns such as Arbitrage or any unethical trades are being noticed in a Trading Account then OTX FOREX reserves the right to disable the Account /or Disallow/Cancel those trades where a minimum difference between opening and closing of trade is less than two minutes duration.

Abnormal Market Conditions

9.1 Under any abnormal market conditions, CFDs may fluctuate rapidly to reflect unforeseeable activity that can’t be managed either by the Firm or by you. As a result, OTXforex may be unable to execute your instructions at given declared price and  ‘stop-loss’ instruction can’t be guaranteed to limit the loss.

 9.2 CFD prices are influenced by, amongst other things, implementation of government actions, Policies, agricultural, commercial and trade programs and policies and national and international activities, socioeconomic and Political Conditions.

Trading Platform Conditions

10.1 You should accept that the only reliable source of price-related information is the Quotes represented on the real/ live time servers and; this service may be disrupted which can result price related information may not reach the destination client.

 10.2 You shall regularly consult and be in touch the ‘Help’ menu or User Guide of the trading platform(s); if a conflict or dispute arises the Service Agreement shall prevail unless OTXforex decides, in its sole discretion, otherwise.

Communication

11.1 OTXforex holds no responsibility for any loss that arises as a result of delayed communication or un-received communication sent to you by the company.

 11.2 In addition, OTX FOREX also bears no responsibility for any loss that arises due to unencrypted information sent to you by the Firm that has been accessed via any unauthorized means.

 11.3 OTXforex also bears no responsibility for any unread or un-received internal messages sent you through any trading platform(s); in such case, a message is not delivered or read within 7 (seven) calendar days the message is automatically deleted.

 11.4 You are solely responsible for the privacy of any data contained within the communication received by OTXforex.

 11.5 Additionally you accept that any loss that arises due to unauthorized third party access to your trading account is not the responsibility of OTXforex.

Force Majeure Event

12.1 In case of a Force Majeure Event you should accept any loss arising.

 12.2 For Further details go through the ‘Force Majeure Event’ is available in the ‘Client Agreement’.

Taxation

13.1 Although investing in CFDs doesn’t involve in taking physical delivery of any underlying financial instrument independent of tax advice should be sought, if needed whether you are subject to any taxes including stamp duty.

Account Review

14.1 You may review any of your trading accounts, including but not limited to open and closed positions. In addition, via OTXforex client area you can manage your account, deposit or withdraw money as per your trading needs.

Costs and Other Considerations

15.1 Prior to trading CFDs you need to study all costs involved like spread(s) (including the mark-up, if applicable), commission(s) and swap(s) charges. All costs aren’t represented in monetary terms. OTXforex reserves the right to change the term from time to time or any of the costs applicable to trading CFDs therefore you understand and clearly accept about the most up-to-date information in relation to costs are available online at the OTXforex website.

Swap Value

16.1 A swap is the interest charged in addition or deduction for holding a position open overnight. Considering your position held the interest rates of the currency pair involved may either be credited or debited accordingly. Your trading account is reconciled every day at 23:59:31 (server time) and the resulting remaining amount will be automatically converted into the currency of your trading account denominations.

 The swap charges for a position opened on Wednesday and held open overnight is three times compared to days; the reason behind is that value date of a trade held open overnight Wednesday would normally occur on Saturday the banks are closed, so the value date is Monday and the client incurs an extra 2 (two) days interest. Friday to Monday swap is charged only once. Please note, rollover interest rates charged by OTXforex depends on the interbank rates; OTXforex updates such rollover interest rates when deems necessary. In addition, you are responsible for checking the applicable swap value prior to trading. Some trading accounts can be exempted from swaps such as; Islamic religious laws, or swap-free offers for certain time. It’s your responsibility to check the criteria before trading on your account.