Risk Warning Notice

Contracts for Differences, Financial Spread Bets and Rolling Spot Forex

Tradenext Limited (“Tradenext”, “We”, “Our” or “Us”) is a Contract for Differences (“CFD”), Financial (“FSB”) and Foreign Exchange (“Forex”) broker authorised and regulated by the Financial Conduct Authority (“FCA”) under firm reference number 573464. Tradenext’s registered office address is Lower Ground, 3 Copthall Avenue, London, EC2R 7BH.

The address of the FCA is 25 The North Colonnade, Canary Wharf, London, E14 5HS.

Tradecrowd Technology Ltd is an Appointed Representative of Tradenext Limited under firm reference number 607527. Tradecrowd’s registered office address is 9th floor, 107 Cheapside, London, EC2V 6DN.

This Risk Warning Notice is provided to you because you are proposing to undertake dealings with Tradenext in financial derivative products under Our Contracts for Differences (“CFDs”), Financial Spread Bets (“FSB”) and Rolling Spot Forex (“Forex”) Terms of Business.

This notice cannot and does not disclose or explain all of the risks and other significant aspects involved in trading CFDs, FSB and Forex. Engaging in these types of transaction can carry a high risk to your capital. You should not engage in trading CFDs, FSB or Forex unless you understand the nature of the transactions you are entering into and the true extent of your exposure to the risk of loss. You should also be satisfied that the products are suitable for you in the light of your circumstances and financial position. Certain strategies, such as a ‘spread’ position or a ‘straddle’, may be as risky as a simple ‘long’ or ‘short’ position. If you are in any doubt you should seek independent advice.

Different products involve different levels of exposure to risk and in deciding whether to trade in such instruments you should be aware of the following points:

1. General

Although CFDs, FBS and Forex can be utilised for the management of investment risk, some of these products are unsuitable for many customers as they carry a high degree of risk. The “gearing” or “leverage” often obtainable in trading CFDs, FSB and Forex often means that a small deposit or down payment can lead to large losses as well as gains. It also means that a relatively small market movement can lead to a proportionately much larger movement in the value of your position, and this can work against you as well as for you. Such transactions may have to be margined, and you should be aware of the implications of this, which are set out in paragraph 3 below. You should only speculate with money you can afford to lose.

2. Foreign markets

Foreign markets will involve different risks from UK markets. In some cases risks will be greater. The potential for profit or loss from transactions on foreign markets or in foreign currency denominated markets will be affected by fluctuations in foreign exchange rates.

3. Margin

You can rapidly lose more on a trade than funds you have deposited with Us to open that trade (the Margin). CFDs, FSB and Forex are margined, and may require you to make a series of payments against the contract value, instead of paying the whole contract value immediately. Where you enter into CFDs, FSB or Forex trades with us, you must maintain sufficient margin on your account at all times to maintain your open positions and We provide you with on-line access to enable you to monitor your margin requirement at all times. We revalue your open positions continuously during each business day, and any profit or loss is immediately reflected in your account and a loss (which may or may not result in a margin call) may require you immediately to provide additional funds to Us to maintain your open positions. We may also change Our rates of initial margin and/or notional trading requirements at any time, which may also result in a change to the margin you are required to maintain. If you do not maintain sufficient margin on your account at all times and/or provide such additional funds within the time required, your open positions may be closed at a loss and you will be liable for any resulting deficit.

4. Off-exchange transactions

When trading CFDs, FSB or Forex with us, you will be entering into an off-exchange or over-the-counter (“OTC”) derivative transaction. All positions entered into with Us must be closed with Us and cannot be closed with any other entity. Transactions in OTC derivatives may involve greater risk than investing in on-exchange derivatives because there is no exchange market on which to close out an open position. It may be impossible to liquidate an existing position, to assess the value of the position arising from an off-exchange transaction or to assess the exposure to risk. Bid prices and offer prices need not be quoted by us, and, even where they are, We may find it difficult to establish a fair price particularly when the relevant exchange or market for the underlying is closed or suspended.

5. Charges and commissions

Before you begin to trade, you should obtain from Us details of all commissions and other charges for which you will be liable which We will usually set out in Our Rates Schedule. If any charges are not expressed in money terms (but, for example, as a percentage of contract value), you should obtain a clear and written explanation, including appropriate examples, to establish what such charges are likely to mean in specific money terms. When commission is charged as a percentage, it will normally be as a percentage of the total contract value, and not simply as a percentage of your initial payment.

6. Suspensions of trading

Under certain trading conditions it may be difficult or impossible to liquidate a position. This may occur, for example at times of rapid price movement if the price for the underlying rises or falls in one trading session to such an extent that trading in the underlying is restricted or suspended.

7. Stop and limit orders

Stop loss orders may limit your loss but are not guaranteed. In some circumstances your loss may be greater. Slippage (commonly known as 'gapping') may occur when the market moves past the price of your stop loss order. This may occur when the particular underlying market has become unusually volatile. For example, the underlying market may have stopped trading at a point above your stop loss order price and after a period of time, may recommence trading at a price below your stop loss order price. In such a circumstance We would close your open trade at or as quickly after the reopening of trading in that underlying market, i.e. at the next price available. This may result in your stop loss order being executed at a price below your stop loss order price in a rapidly falling underlying market.

8. Money and collateral

8.1 If you have been categorised as a retail client (or We have agreed to segregate your funds), then We will hold your money in trust in a segregated client money bank account separate from Our money at one or more approved financial institutions in accordance with the Client Money Rules; however, this may not provide complete protection (for example, in the insolvency of Our bank). Your attention is also drawn to 'Client Money' section of Our Terms and Conditions.

8.1 If you are a professional client or eligible counterparty, then any money held by Us will normally be transferred to Us to secure your actual or potential obligations to us. Such money will not be segregated from Our money and you will rank as a general creditor of Tradenext.

8.2 If you deposit collateral as security with us, We may provide you with additional terms and conditions that apply. Deposited collateral may lose its identity as your property once dealings on your behalf are undertaken.

8.3 Even if your dealings should ultimately prove profitable, you may not get back the same assets which you deposited and may have to accept payment in cash. It is your responsibility to ascertain how your collateral will be dealt with by us.

8.4 In the unlikely event of Our default, We are members of the Financial Services Compensation Scheme which, in respect of proven and eligible claims, provides protection of 100% of the first £50,000 of any claim.

9. Appropriateness

Before We open an account for you, We are required to assess whether Our services and the products We offer are appropriate for you, and to warn you if, on the basis of the information you provide to us, it is not appropriate. You must decide on whether or not to open an account based on your understanding of the risks and your personal circumstances. We may also periodically ask you KYC (Know Your Customer) questions regarding your financial assets and earnings. We do not monitor on your behalf whether the amount of money you have sent to Us or your profits or losses are consistent with that information. It is your responsibility to assess whether your financial resources are adequate prior to trading.