High-risk products

In compliance with our regulatory requirements, this notice is provided to you because you are proposing to deal in margin traded products such as Spread Betting, Contracts For Difference (CFDs) with Alvar Financial.

CFDs, spread betting and rolling spot forex are complex, high-risk financial products. These products pose the following risks:

  • You are at risk of losing money rapidly, due to leverage.
  • Your losses may exceed your deposits.

Most investors lose money on these products.

In addition to these risks you should be aware that:

  • We may make a margin call requiring you to deposit further funds to cover open positions and if you fail to post additional margin we may close out your position without warning.
  • Trading fees, commissions, or spreads will be based on the full investment exposure of your deposited funds. An additional fee will be applied for overnight financing arrangements to maintain your position. These charges will impact your financial return.

Margin trading

Margined trades (or bets in the case of spread betting) are trades on the price movement of a product. They settle based on the difference between the opening price and the closing price of the trade or bet. They can settle in a currency other than your base currency and therefore your profit or loss could be liable to foreign exchange fluctuations.

The nature of these products carry a higher risk of loss than trading many traditional instruments. As such our products may not be suitable for everyone. You should not trade any margined product unless you fully understand all the risks involved with doing so and that you have sufficient resources available to you that in the event, however unlikely you may deem it to be, that there is an adverse movement in the price of that product that you can meet the financial obligations required by you with respect to margin payments and losses.

Margin trading is leveraged trading that allows ‘gearing’ which means that you can place a large trade or bet by only putting up a small amount of money as margin. If the price moves in your favour you can greatly increase your profits. However even a small movement in price against you can lead to substantial losses and you may be required to deposit additional margin with us immediately to keep these trades open.

Failure to do this could result in positions being closed. You are liable for this and for any losses that may occur if your positions are closed. The potential losses, or profits, for margin traded products are, or could be, unlimited and this should always be considered by you when making trading decisions. The speed at which profits and losses can be incurred for these instruments, due to their geared nature means that it is essential to monitor your positions closely.