| Risks of Leveraged FX Trading |
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| 1. Side-effects of Leveraged FX Trading |
| Due to the fact that a relatively small margin deposit ( eg. 500,000 yen to trade a US$100,000 lot ) is involved in trading a much bigger currency contract, profits will be considerably enlarged under favorable circumstances, but in adverse conditions, losses might be correspondingly greater and might sustain losses in excess of the original funds. |
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| 2. Market Risk |
| The fluctuation of FX market might give rise to unforeseeable losses. Leveraged FX trading is not a capital protection investment and it is strongly hoped that the final decision of trading transaction lies with the client. |
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| 3. Credit Risk |
| The risk that our company and/or a counterparty fails to perform an obligation and such a situation might bring risks to client. |
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| 4. Liquidity Risk |
| War, natural hazards, sudden market fluctuation and unforeseen circumstances beyond human control might lead to difficulty in dealing/trading in the currency contracts or even to the extent of stoppage. |
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| 5. Interest Risk |
In the course of leveraged FX trading, interest rate SWAP occurs at the same time, depending on the interest rate differential of the currency pairs which in turn depends on the probable change of financial strength and fiscal policy of the countries in question.
When a high yield currency is sold, one will have to pay the SWAP interest differential for holding this short position every overnight. Under such circumstances, and in the course of time, one might not be able to make profits or might have to suffer losses even if the short position does trade in the desired direction. |
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| 6. System Risk |
| During the course of i-trading, one has to hold responsible for transaction inputs of 'buy' and 'sell' data, including prices and quantities. Moreover, if account number and password have gone astray, a third party might utilize it for a bad purpose, and account might incur losses as a result of this. Also, it is possible that trading might come to a stop due to communication disruption or failure. |
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| * The above-mentioned risks are only exemplary risks associated with Leveraged FX Trading and do not represent all of the possible risks. |
* The prices of Forex Trading are traded and arrived at 24 hours without stopping during a trading day dependent on a number of different economic and world factors. Leveraged Forex Trading is executed basing on a relatively small margin deposit to trade in a much bigger currency contract, consequently, changes in FX prices might incur in unpredicted losses. Furthermore, Leveraged Forex Trading is not a capital protection investment, and losses might be greater than the initial investment funds. Trading commission varies according to the kind of trading categories, ranging from JPY 300 to JPY 6,000 one way trading.
Before commencing trading, clients are earnestly requested to read carefully 'Leveraged Forex Trading Instruction Book' and 'Leveraged Forex Trading Rules and Regulations'. Upon fully understanding the contents and risks of Leveraged Forex Trading and evaluating one's financial status, trading experience and trading objective, one should exercise one's own judgment to execute Leveraged Forex Trading and be held fully responsible for such trading.
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