Risk Disclosure Statement

Important information about CFD trading risks

High Risk Warning

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

1. What are CFDs?

A Contract for Difference (CFD) is a derivative financial instrument that allows you to trade on the price movements of underlying assets without owning the actual asset. When you trade CFDs, you are entering into a contract to exchange the difference in the price of an asset from when the position is opened to when it is closed.

2. Key Risk Factors

Leverage Risk

Leverage amplifies both profits and losses. A small adverse price movement can result in losses exceeding your initial investment.

Market Risk

Financial markets can be volatile and unpredictable. Prices can move rapidly against your position due to economic, political, or market events.

Overnight Risk

Positions held overnight are subject to financing charges and potential gaps in pricing when markets reopen.

Liquidity Risk

In volatile market conditions, it may be difficult to execute trades at desired prices or close positions when you want to.

3. Leverage and Margin

Understanding Leverage

Leverage allows you to open positions larger than your account balance. For example, with 10:1 leverage, you can control £10,000 worth of assets with just £1,000.

10:1 Leverage
10% margin required
50:1 Leverage
2% margin required
100:1 Leverage
1% margin required

Margin Call: If your account equity falls below the required margin level, you may receive a margin call requiring additional funds. If you cannot meet the margin requirements, your positions may be automatically closed at a loss.

4. Costs and Charges

CFD trading involves various costs that can affect your profitability:

  • Spreads: The difference between bid and ask prices
  • Commissions: Fixed fees charged per trade
  • Overnight Financing: Interest charges for positions held overnight
  • Currency Conversion: Costs when trading in different currencies
  • Inactivity Fees: Charges for dormant accounts

5. Market Specific Risks

Forex CFDs

Currency markets can be affected by interest rate changes, political events, economic data, and central bank interventions. Exchange rates can be highly volatile.

Index CFDs

Stock indices can be affected by overall market sentiment, economic conditions, and individual stock performance within the index.

Commodity CFDs

Commodity prices can be volatile due to supply and demand factors, weather conditions, geopolitical events, and storage costs.

Cryptocurrency CFDs

Cryptocurrencies are extremely volatile and can experience rapid price changes. They are subject to regulatory risks and technological issues.

6. Risk Management

To manage risk when trading CFDs, consider the following:

  • Never invest more than you can afford to lose
  • Use stop-loss orders to limit potential losses
  • Diversify your trading portfolio
  • Start with small position sizes
  • Understand the markets you're trading
  • Keep up to date with market news and events
  • Regularly review and adjust your risk management strategy

7. Regulatory Protection

As an FCA authorized firm, we provide certain protections:

  • Negative balance protection for retail clients
  • Client money segregation
  • Financial Services Compensation Scheme (FSCS) protection
  • Leverage limits for retail clients
  • Margin close out protection

8. Suitability Assessment

Before trading CFDs, you should consider:

  • Your investment objectives and risk tolerance
  • Your financial situation and ability to bear losses
  • Your knowledge and experience with financial markets
  • The time you can dedicate to monitoring your positions
  • Your understanding of leverage and margin requirements

Final Warning

This risk disclosure does not cover all the risks associated with CFD trading. Before you start trading, please ensure you fully understand the risks involved and seek independent advice if necessary. Past performance is not indicative of future results.

9. Contact Information

If you have questions about these risks or need clarification, please contact:

Brokersure Ltd

Phone: +44 1376 809041

Email: support@valuvera.com

Address: CO5 9SE, United Kingdom

FCA Reference: 501719