This brief statement does not disclose all of the risks involved in trading spot foreign exchange, spot metals and other off-exchange derivative contracts. You should undertake such transactions only if you understand the nature of the financial markets and products offered, and the extent of your exposure to risk. Trading in these instruments may not be suitable for all investors. Before deciding to trade, you should carefully consider your investment objectives, level of experience, exposure to risk and other relevant circumstances.
Effect of "Leverage" or "Gearing"
Transactions in spot foreign exchange, spot metals and other off-exchange derivative contracts carry a high degree of risk. The amount of initial margin may be small relative to the value of the value of foreign exchange or derivatives contract so that the transaction is “leveraged” or “geared”. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit; this may work against you as well as for you. While you could make a potential profit if the market moves in your favor, you could just as easily sustain a total loss of initial deposited funds and any additional funds deposited with the Company to maintain your position. If the market moves against your position and/or margin requirements are increased, you may be called upon to deposit additional funds on short notice, if you wish to maintain your position. If you fail to comply with a request for additional funds within the time prescribed, your position may be liquidated at a loss and you will be liable for any resulting deficit.
Risk-Reducing Orders or Strategies
Placing certain orders (e.g. ‘stop-loss’ or ‘stop limit’ orders) that are intended to limit losses may not always be effective due to hectic market conditions or technological limitations that may hinder the execution of such orders. Strategies using combinations of positions, such as hedging strategies, may be as risky as taking ‘long’ or ‘short’ vanilla positions.
Trading and Pricing Relationship Restrictions
Illiquid market conditions, changes in government regulation or trading restrictions, with respect to certain markets, may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate/offset positions. ICM will bear no liability for any failure to effect any such transactions should such events arise. Off-exchange transactions (over-the-counter) maybe be less regulated or subject to a separate regulatory regime. Before you undertakes such transactions, you should familiarize yourself with applicable rules and attendant risks.
Markets generally do not trade during week-ends. It is during that time that various news and developments may arise resulting in wider differences between the bid and the ask prices. You will then not be able to use the ICM online trading software to place orders. There is substantial risk when no stop-loss orders are left to protect positions held over weekends especially when markets are open at significantly lower levels than their specified price.
Electronic Trading Risk
In case of system failure or other interruptions, orders may not be executed, placed or changed as per your instructions. ICM shall not be liable for any such hardware or software failures, system downtime or communications interruption. Furthermore, ICM does not warrant that you will be able to maintain a continuous and uninterrupted internet connection, and shall have no liability for any such failures.
OTC and Off-Exchange Transactions
Unlike regulated exchanges, there are no limits to daily price fluctuations when trading OTC instruments and other off-exchange derivatives. Therefore, not all customary regulated-exchange-market Client-protection tools and regulations are present in this case. OTC and off-exchange transactions may be less regulated or subject to a separate regime. Before undertaking such transactions, you should familiarize yourself with applicable risks and rules.
You enter a trade and open a position with ICM in its capacity as a counterparty. ICM online trading software is not a marketplace or an exchange. There are no guarantees to the creditworthiness of ICM. ICM reserves the right, in its sole discretion, to cease trading in any OTC and off-exchange derivative instrument at any time. In such event you will be prevented from liquidating an adverse position. You may then experience substantial loss.
Introducing Brokers and Other Affiliations
You may be introduced to ICM through a broker. It is important to note that ICM and the introducing broker are separate and independent entities that are not joined by employment, agency or partner relationships.