Risk Disclosure
Important information about the risks associated with trading Event Contracts CFD
High Risk Warning
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Trading Event Contracts CFD involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources, and other relevant circumstances.
The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.
Understanding Leverage Risk
Leverage allows you to control a large position with a relatively small amount of capital. While this can amplify profits, it can also magnify losses. A small adverse price movement can result in the loss of your entire investment.
Event Contracts CFD are leveraged products, meaning you only need to deposit a percentage of the full value of the trade to open a position. However, your profit or loss is calculated on the full value of the position, not just your initial deposit.
Market Volatility
Event Contracts are based on real-world events that can be highly unpredictable. Political elections, economic announcements, sports outcomes, and other events can experience rapid and significant price movements.
Market volatility can result in rapid changes to your positions, potentially leading to substantial losses in a short period. Prices may gap, meaning they move from one level to another without trading at the levels in between.
Binary and Multi-Outcome Market Risks
Binary Markets: In binary outcome markets (Yes/No, Over/Under), positions can expire worthless if the outcome does not occur. This means you could lose your entire investment if the market settles against your position.
Multi-Outcome Markets: In markets with multiple possible outcomes, only one outcome will settle at 100, while all others settle at 0. This creates a winner-takes-all scenario where incorrect predictions result in total loss of the position.
Margin Requirements and Liquidation
You must maintain sufficient margin in your account to keep positions open. If your account equity falls below the required margin level, your positions may be automatically closed (liquidated) at the current market price, which may result in significant losses.
Margin calls may occur during periods of high volatility or when multiple positions move against you simultaneously. You are responsible for monitoring your account and maintaining adequate margin at all times.
Past Performance
Past performance is not indicative of future results. Historical data, backtesting results, and simulated trading records do not guarantee future performance. Market conditions change, and strategies that worked in the past may not work in the future.
Technology and Execution Risks
Trading through electronic platforms involves risks related to system failures, internet connectivity issues, and software malfunctions. While we maintain robust technology infrastructure, technical issues can occur that may prevent you from accessing your account or executing trades.
During periods of high market volatility or system congestion, order execution may be delayed, and you may not receive the price you expected (slippage).
Regulatory and Legal Risks
Event Contracts CFD trading is subject to regulatory oversight and legal restrictions that vary by jurisdiction. Changes in regulations, tax laws, or legal interpretations may affect your ability to trade or the profitability of your positions.
It is your responsibility to ensure that you are legally permitted to trade Event Contracts CFD in your jurisdiction and to comply with all applicable laws and regulations.
Recommendations
- Only trade with money you can afford to lose
- Understand the products you are trading and their associated risks
- Use risk management tools such as stop-loss orders
- Diversify your positions across different markets and outcomes
- Monitor your positions regularly and maintain adequate margin
- Seek independent financial advice if you are unsure about trading
- Start with small position sizes until you gain experience
- Educate yourself through our trading guides and resources
By using EXDGE's platform and services, you acknowledge that you have read, understood, and accepted the risks outlined in this disclosure. You agree that EXDGE is not responsible for any losses you may incur as a result of trading Event Contracts CFD.