Risk Disclosure
The risks of trading leveraged CFDs, set out in full.
Purpose
This notice explains the main risks of trading CFDs with Zerventa. It cannot list every risk. Read it together with the Client Agreement and do not trade until you understand and accept these risks. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. A large proportion of retail investor accounts lose money when trading CFDs.
Leverage magnifies losses as well as gains
With leverage of 1:100 a position is 100 times the margin you commit. A 1% move against you wipes out the margin. Small price moves therefore produce large gains or losses relative to your deposit, and losses can exceed the amount committed to a single trade. You must never trade with money you cannot afford to lose.
You can lose your whole deposit
When your equity falls below the required margin, positions are closed automatically. You may lose the entire balance of your account. Negative balance protection means you will not owe the Company more than you deposited, but it does not protect the deposit itself.
Volatility, gaps and slippage
Markets can move sharply, especially around economic releases, at the open after a weekend or holiday, and in thin liquidity. Prices may "gap" past your stop loss, so it executes at a worse price than the level you set. Market orders may fill at a different price from the one shown at the moment you clicked.
No ownership of the underlying
A CFD gives exposure to the price of an asset, not the asset itself. You have no shareholder rights, no claim on a commodity and no ownership of any cryptocurrency. Corporate actions (dividends, splits) are reflected by adjustments to your position.
Overnight financing and costs
Holding positions overnight incurs swaps that can accumulate materially over time, particularly on leveraged positions held for weeks. Spreads, commissions and fees reduce your returns and are charged whether or not a trade is profitable.
Technology and connectivity
Trading depends on your device, your internet connection and our systems. Outages, latency or errors can prevent you from opening, modifying or closing positions. Keep alternative means of contacting support and do not rely on a single device.
Cryptocurrency CFDs
Cryptocurrency prices are exceptionally volatile and markets trade 24/7, so positions can move significantly while you are away. Liquidity can disappear suddenly and spreads can widen.
Counterparty and operational risk
The Company is your counterparty. Its ability to pay depends on its financial soundness and the safeguards it operates for client money. Read the About and Legal pages for the safeguards in place.
Suitability
CFD trading is not suitable for everyone. Consider your experience, investment objectives, financial situation and risk tolerance. Seek independent advice if you are unsure. Past performance, including on a demo account, is not a reliable indicator of future results.
This document forms part of the Legal Documents of Zerventa. The current version is always the one published on this page. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.