OANDA Asia Pacific Risk Disclosure Statement
IMPORTANT - READ CAREFULLY:
OANDA Asia Pacific Pte. Ltd. (“OANDA”) believes that its customers should be aware of the risks involved in entering over-the-counter contracts for foreign currency (“foreign currency contracts”). The following is a brief summary of certain considerations that you should take into account when deciding whether to trade in foreign currency contracts. This Risk Disclosure Statement (the “Statement”) is not meant to be all-inclusive; rather it is intended to highlight certain more significant factors and special risks related to foreign currency contracts.
In order to open and operate an fxTrade account with OANDA Asia Pacific, you must indicate that you have read and understood this Statement. Please read this Statement in its entirety.
When you enter into a foreign currency contract with OANDA, you will be entering into a privately negotiated contract with OANDA, as principal. OANDA may, in turn, enter into “back-to-back” transactions with others. OANDA includes its mark-up in the price it quotes to you. These foreign currency contracts are not executed on an exchange and are not cleared on a central clearing organization. They are obligations of OANDA and you will not be afforded the regulatory and financial protections offered by exchange-traded contracts. Both you and OANDA are obliged to perform their respective obligations under each transaction in accordance with its terms. The terms of each foreign currency contract are set out in OANDA’s Customer Agreement, which applies to every transaction you enter into with OANDA.
In entering into foreign currency transactions you should understand that OANDA is acting solely in the capacity of an arm’s length contractual counterparty to you in connection with the transaction and not in the capacity of your financial advisor or fiduciary. Accordingly, you should not regard any transaction proposal, suggested hedging strategies or other written materials or oral communications from OANDA as investment recommendations or advice or as expressing OANDA’s views as to whether a particular transaction is suitable for you or meets your financial objectives. Moreover, any market or quote that OANDA makes for you may be based solely on markets or quotes that are made or quoted to OANDA by the counterparties with which it does business. Such quotes or markets may not represent the best quotes or markets available to you or OANDA from other sources and OANDA undertakes no obligation to obtain competitive quotes or markets from other counterparties.
This brief Statement does not disclose all of the risks and other significant aspects of trading in foreign currency contracts. In light of the risks, you should trade in foreign currency contracts only if you understand the contracts (and contractual relationships) into which you are entering and the extent of your exposure to risk. Trading in foreign currency contracts is not suitable for many members of the public. You should consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. Most importantly, do not invest money that you are not in a position to lose.
Transactions in foreign currency contracts carry a high degree of risk. The amount of initial margin is small relative to the value of the foreign currency contracts contract so that transactions are “leveraged” or “geared”. A small market movement will have a proportionally larger impact on your position. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and any additional deposits made to maintain your position.
You agree that you are willing and able, financially and otherwise, to assume the risk of trading in speculative investments and agree not to hold OANDA responsible for losses incurred as a consequence of OANDA carrying your account and following its recommendations or suggestions or those of employees, associates or representatives. You accept that guarantees of profit or freedom from loss are impossible in investment trading.
OANDA’s trading system is designed to automatically liquidate all open positions if your margin deposit is in jeopardy so that you cannot lose more than the funds you have on deposit in your trading account. To limit your losses OANDA encourages you to employ such risk-reducing strategies as “stop-loss” or “stop-limit” orders, but you should be aware that market conditions may make it impossible to close out your order at the level specified.
There are risks associated with utilizing an Internet-based trade execution software application including, but not limited to, the failure of hardware and software. While OANDA maintains back up systems and contingency plans to minimize the possibility of system failure, OANDA does not control signal power, reception, routing via the Internet, configuration of your equipment or the reliability of your connection to the Internet. The result of any failure of the foregoing may be that your order is either not executed according to your instructions, or is not executed at all.
OANDA’s hours of operation coincide with the global financial markets. Trading is available from Sunday approximately 5 p.m. to Friday 5 p.m., (Eastern) New York time. During weekends you will not be able to close existing positions or open new positions. Also, spreads (the difference between the bid price and the ask price) typically widen at 4:15 p.m. Friday, to reflect decreased liquidity in the global markets. And, it is possible for market prices to significantly change or “gap” when trading resumes on Sunday. Therefore, you must ensure that you maintain sufficient margin in your fxTrade account at all times to avoid a margin closeout. To reduce the risk of a margin closeout, reduce or close your overall positions or add more funds to your fxTrade account and to prevent unwanted order execution, consider widening your take profits, stop losses or trailing stops prior to the weekend.
As a Capital Markets Services licence holder licensed by Monetary Authority of Singapore, OANDA is required to and has set up a trust account at a major bank registered and licensed in Singapore. All funds you send to OANDA must be deposited in this trust account, and held there in trust for you. This means that your funds are segregated and maintained separately from OANDA own funds, and can only be withdrawn as a direct result of your trading-related activities or withdrawal requests. No withdrawals can be made from this account for any OANDA operations.