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A summary of products and services and the associated risks
Investing in financial products involves risks. Generally, you should only trade in financial products that you are familiar with and understand the associated risks. Before making investment decisions, you should carefully consider your financial situation and consult independent professional advisors to determine whether the investment is suitable for you.
Securities prices can sometimes be highly volatile. The prices of securities can rise and fall, and may even become worthless. Trading in securities may not necessarily generate profit; instead, it may lead to losses.
The risk of loss in trading futures contracts or options is substantial. In certain circumstances, you may sustain a loss greater than the amount of margin you initially deposited. Even if you place contingent orders, such as "stop-loss" or "stop-limit" orders, these orders may not necessarily limit your losses. Market conditions may make it impossible to execute such orders. You may be required to deposit additional margin within a short time frame. If you fail to meet the required amount within the specified time, your open positions may be liquidated. You will be liable for any resulting deficit in your account. Therefore, you should thoroughly understand and consider whether such trading is suitable for you based on your financial status and investment objectives before trading. If you decide to trade options, you should understand the specific exercise and expiration procedures and your rights and obligations upon exercise or expiration.
Futures trading involves the trading of contracts on the future price movement of specific underlying assets. Futures contracts obligate the holder to buy or sell the corresponding asset at a fixed price on a specific future date. For example, the underlying asset could be raw materials, agricultural products, or financial instruments. Depending on the nature of the futures contract, assets must be settled either by difference or by actual delivery on the settlement date. AFT does not support physical delivery. Futures are always traded on margin (see above "Forex Trading"). Futures trading is conducted in regulated markets, either directly within an exchange's trading system or through reporting trades.
Please note that because futures are traded on margin, you may hold larger positions relative to your available funds at AFT. Consequently, relatively small negative or positive market fluctuations can have a significant impact on your investment. Thus, the risk associated with futures trading is relatively high. This means that even with relatively small margin deposits, the potential returns can be substantial. However, if the total risk of your margin trading exceeds your margin deposits, you may incur losses that exceed your margin deposits.
The following brief explanation discloses some, but not all, of the risks associated with futures trading and other important aspects. Futures trading is not suitable for the general public. You should carefully consider whether such trading is appropriate for you based on your personal experience, objectives, financial resources, and other relevant circumstances:
Options trading is highly speculative and involves a high degree of risk, making it unsuitable for all investors. Buyers and sellers of options contracts should understand the type of options they intend to trade (e.g., put or call options, buy or sell options) and the associated risks. Options contracts are traded with AFT as the counterparty.
Options contracts give you the right or obligation to buy or sell a specific quantity or value of a particular underlying asset at a fixed strike price before or on a specified expiration date. A call option gives you the right to buy, while a put option gives you the right to sell.
Options contracts that are in-the-money at expiration will automatically be exercised.
Options trading involves significant risk. Buying options (buying call options or put options) may result in a total loss of your initial investment (i.e., the premium and transaction costs). Selling options (selling call options or put options) can lead to large (potentially unlimited) losses. To ensure that you can cover the losses from selling options, AFT will require you to post margin. However, potential losses can exceed the margin collected, and you will be responsible for these losses.
If the total risk of your margin trading exceeds your margin deposits, your losses may exceed your margin deposits. If the underlying asset of an options contract is a margin-traded product (i.e., a derivative) and the options contract is exercised by the buyer, the buyer (in the case of a call option) or the seller (in the case of a put option) will obtain a position in the underlying margin-traded product and be subject to the corresponding risks and margin requirements.
The final settlement of stock options requires the physical delivery of the underlying stock rather than cash settlement of the strike value. If a client holds a stock options position but does not have enough cash or stock, they will not be able to settle the options position and will fail to fulfill their contractual obligations.
When the holder of a long options position exercises their right to buy or sell the underlying stock on or before the expiration date, the stock options position will be finally settled. At expiration, all in-the-money long options positions held by AFT clients are automatically exercised. Customers holding short options positions will be assigned via random selection both before and at expiration. The "assumed" procedure should not be used to settle short options positions at expiration. Broker clearing statements should reflect the true outcome of options expiry trades.
Generally, AFT clients are responsible for meeting the settlement requirements associated with their options positions. Therefore, AFT will not take preemptive action to avoid settlement failures for client positions. Clients are responsible for managing their positions, especially as expiration approaches, to ensure they can meet any settlement obligations. However, if AFT faces unsecured client losses, AFT reserves the right to take preemptive action to close out some or all of the client's positions that may result in potential losses, which cannot be covered by the account balance. Preemptive liquidations will be carried out by AFT's Market Analysis and Control Department.
If a client fails to meet their settlement obligations, AFT will act on behalf of the client to resolve the settlement failure issue without prior notice. AFT will purchase the required stock at market price to settle short stock positions, liquidate any or all positions to settle short cash positions, and liquidate any long options positions used to cover short options positions. In exchange-traded options, this is known as default processing. Additional (substantial) commissions will be charged for transactions executed for default processing. Default processing will be executed by AFT's Market Service Desk.
Therefore, clients should carefully consider closing out positions before expiration.
The following brief explanation discloses some, but not all, of the risks associated with options trading and other important aspects. Options trading is not suitable for the general public. You should carefully consider whether such trading is appropriate for you based on your personal experience, objectives, financial resources, and other relevant circumstances:
Options trading is highly speculative and involves a high degree of risk, making it unsuitable for all investors. Buyers and sellers of options contracts should understand the type of options they intend to trade (i.e., put or call options, buy or sell options) and the associated risks. Options contracts are traded with AFT as the counterparty.
Options contracts give you the right or obligation to buy or sell a specific quantity or value of a particular underlying asset at a fixed strike price before or on a specified expiration date. A call option gives you the right to buy, while a put option gives you the right to sell.
Options contracts that are in-the-money at expiration will automatically be exercised.
Options trading involves significant risk. Buying options (buying call options or put options) may result in a total loss of your initial investment (i.e., the premium and transaction costs). Selling options (selling call options or put options) can lead to large (potentially unlimited) losses. To ensure that you can cover the losses from selling options, AFT will require you to post margin. However, potential losses can exceed the margin collected, and you will be responsible for these losses.
If the total risk of your margin trading exceeds your margin deposits, your losses may exceed your margin deposits. If the underlying asset of an options contract is a margin-traded product (i.e., a derivative) and the options contract is exercised by the buyer, the buyer (in the case of a call option) or the seller (in the case of a put option) will obtain a position in the underlying margin-traded product and be subject to the corresponding risks and margin requirements.
The final settlement of stock options requires the physical delivery of the underlying stock rather than cash settlement of the strike value. If a client holds a stock options position but does not have enough cash or stock, they will not be able to settle the options position and will fail to fulfill their contractual obligations.
When the holder of a long options position exercises their right to buy or sell the underlying stock on or before the expiration date, the stock options position will be finally settled. At expiration, all in-the-money long options positions held by AFT clients are automatically exercised. Customers holding short options positions will be assigned via random selection both before and at expiration. The "assumed" procedure should not be used to settle short options positions at expiration. Broker clearing statements should reflect the true outcome of options expiry trades.
Generally, AFT clients are responsible for meeting the settlement requirements associated with their options positions. Therefore, AFT will not take preemptive action to avoid settlement failures for client positions. Clients are responsible for managing their positions, especially as expiration approaches, to ensure they can meet any settlement obligations. However, if AFT faces unsecured client losses, AFT reserves the right to take preemptive action to close out some or all of the client's positions that may result in potential losses, which cannot be covered by the account balance. Preemptive liquidations will be carried out by AFT's Market Analysis and Control Department.
If a client fails to meet their settlement obligations, AFT will act on behalf of the client to resolve the settlement failure issue without prior notice. AFT will purchase the required stock at market price to settle short stock positions, liquidate any or all positions to settle short cash positions, and liquidate any long options positions used to cover short options positions. In exchange-traded options, this is known as default processing. Additional (substantial) commissions will be charged for transactions executed for default processing. Default processing will be executed by AFT's Market Service Desk.
Therefore, clients should carefully consider closing out positions before expiration.
The following brief explanation discloses some, but not all, of the risks associated with options trading and other important aspects. Options trading is not suitable for the general public. You should carefully consider whether such trading is appropriate for you based on your personal experience, objectives, financial resources, and other relevant circumstances:
Options buyers can offset or exercise the options, or allow the options to expire. Exercising the options may result in cash settlement or the buyer obtaining or delivering the underlying equity. If the options are based on a futures contract, the buyer will obtain a futures position and will be subject to related margin obligations (see "Futures" section above). If the options purchased are worthless at expiration, you will lose your entire investment, including all options premium and transaction costs. If you intend to purchase out-of-the-money options, please note that the likelihood of profit is usually small.
Selling (i.e., "writing" or "granting") options usually involves more risk than buying options. Although the premium received by the seller is fixed, the seller may incur losses exceeding that amount. If the market moves against the seller, they will need to deposit additional margin to maintain the position. Sellers also face the risk of the buyer exercising the options, and the seller is obligated to settle the options in cash or obtain or deliver the underlying equity. If the options are based on a futures contract, the seller will obtain a futures position and will be subject to related margin obligations (see "Futures" section above). The risk may be reduced if the options are "covered" by holding a corresponding position in the underlying equity, futures contract, or other options. If the options are not covered, the risk of loss may be unlimited.
Certain jurisdictions' exchanges allow for delayed payment of the options premium, limiting the buyer's risk to the cost of the premium. However, the buyer remains at risk of losing these costs and transaction fees. When options are exercised or expire, the buyer must pay any outstanding premium costs at that time.
Additional Common Risks of Forex and Derivative Trading (Including Futures and Options)
In forex trading, investors focus on the price movement of one currency relative to another, meaning selling one currency while buying another. For example, if an investor expects the US dollar to appreciate against the British pound, they may sell pounds to buy dollars.
Forex trading is a leveraged product, meaning you can open larger positions in the market with a relatively small amount of capital. Forex can be traded as spot forex, forward forex, or forex options. Spot forex involves buying one currency and selling another for immediate delivery. Forward forex and forex options involve settlement on a future agreed date at the price agreed upon on the trade date. Forward forex trading involves an obligation to trade at the agreed price on the settlement date. If the forex option price is more favorable than the market price at that time, the buyer of the forex option has the right to trade the underlying spot forex currency pair on the expiry date. On the other hand, if the buyer demands it, the option seller is obligated to trade with the buyer (AFT) on the settlement date. Therefore, the risk involved in buying options is limited to the premium paid at contract signing, while the risk in selling options is unlimited, depending on the price movement of the underlying spot forex currency pair.
The forex market is the largest financial market globally, trading 24 hours a day on weekdays. One of its characteristics, compared to other products, is its relatively low profit margin. Therefore, to achieve substantial profits, a large trading volume is necessary, such as in the margin trading mentioned above. In forex trading, the profit of one market participant is always offset by the loss of another participant. Forex trading is always conducted with AFT as the counterparty, with AFT quoting prices based on those available in the market.
Please note that because forex is traded on margin, you can hold larger positions based on your funds at AFT. Consequently, relatively small negative or positive market fluctuations can significantly impact your investment. Thus, the risk associated with forex trading is relatively high. This means that even with relatively small margin deposits, the potential returns can be substantial. However, if the total risk of your margin trading exceeds your margin deposits, your losses may exceed your margin deposits.
The risk of loss in trading leveraged forex can be substantial. You may lose more than your initial margin deposit. Even if you set contingent trading orders, such as "stop-loss" or "stop-limit" orders, these may not necessarily limit your losses to the intended amounts. Market conditions may prevent the execution of such orders. You may be required to deposit additional margin within a short time frame. If you fail to provide the required amount within the specified time, your open contract positions may be liquidated. You will be responsible for any resulting deficit in your account. Therefore, you must carefully consider your financial situation and investment objectives to determine whether trading is suitable for you.
Selling forex options involves special risks and can result in significant losses for investors like you. Therefore, this strategy may not be suitable for all clients and is primarily intended for experienced investors.
Please note the following situations:
Selling forex options is only suitable for experienced investors who understand the risks, have the financial capability and willingness to bear potentially significant losses, and have sufficient liquid assets to meet applicable margin requirements. In this regard, if the value of the underlying instrument moves against the open short options position, AFT may require substantial additional margin payments or forcibly close investor accounts with little or no prior notice in accordance with the General Business Terms.
Investing in Growth Enterprise Market (GEM) stocks involves high risks. Some companies listed on GEM may not have a track record of profitability or may not be obligated to forecast future profitability. GEM stocks can be highly volatile and illiquid.
Be sure to make investment decisions after appropriate and prudent consideration. Due to the higher risks and other characteristics of GEM, it is more suitable for professionals and other experienced investors.
To obtain the latest information on GEM stocks, you may only be able to access it on the website operated by The Stock Exchange of Hong Kong Limited. GEM companies are generally not required to publish paid announcements in the gazette.
If you are unsure or do not understand any part of this risk disclosure statement or the nature and risks of trading GEM stocks, please seek independent professional advice.
Overseas listed investment products must comply with the laws and regulations of the jurisdiction where they are listed. Before trading overseas listed investment products or authorizing others to trade on your behalf, you should understand the following:
These risks and others may affect the value of your investment. If you do not understand or cannot bear such risks, you should not invest in the product.
This statement does not disclose all the risks and other significant aspects of trading overseas listed investment products. You should only trade such products if you understand and can bear the level of risk you are exposed to.
You should carefully consider whether trading is suitable for you based on your personal experience, objectives, risk tolerance, financial resources, and other relevant circumstances. When considering whether to trade or authorize others to trade on your behalf, you should note the following:
Client assets received or held by licensed persons or registered institutions outside Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction. These laws and regulations may differ from the Securities and Futures Ordinance (Cap. 571) and the rules made thereunder. As a result, the corresponding client assets may not enjoy the same protection as those received or held in Hong Kong.
If you authorize a licensed person or registered institution to use your securities or securities collateral under a securities lending agreement, re-pledge your securities collateral to obtain financing, or deposit your securities collateral as collateral for fulfilling or discharging their settlement obligations and liabilities, there are certain risks involved.
If your securities or securities collateral are received or held by a licensed person or registered institution in Hong Kong, the above arrangements are only valid if you have given written consent. Additionally, unless you are a professional investor, your authorization must specify a valid period that does not exceed 12 months. If you are a professional investor, this restriction does not apply.
Moreover, if your licensed person or registered institution sends you a reminder at least 14 days before the expiry of the authorization and you do not object to the continuation of the authorization before it expires, the authorization will be deemed to have been renewed without your written consent.
There is currently no legal requirement for you to sign these authorizations. However, a licensed person or registered institution may require authorization, for example, to provide you with margin loans or to lend your securities or securities collateral to third parties or deposit them with third parties as collateral. The licensed person or registered institution should explain the purpose of exercising these powers to you.
If you sign one of these authorizations and your securities or securities collateral are lent to or deposited with third parties, those third parties will have a lien or charge on your securities or securities collateral. Although the licensed person or registered institution that lends or deposits your securities or securities collateral under your authorization is responsible to you, the misconduct of the licensed person or registered institution may result in losses to your securities or securities collateral.
Most licensed persons or registered institutions offer cash accounts that do not involve securities lending. If you do not need margin loans or do not want your securities or securities collateral to be lent or pledged, do not sign the above authorizations and request to open such cash accounts.
If you authorize a licensed person or registered institution to hold mail or send mail directly to third parties, you must collect all contract notes and account statements in a timely manner and carefully review them to ensure that any anomalies or errors are promptly identified.
Before engaging in margin loans, you should carefully read this information and the terms of the margin loan agreement. Through a margin loan, you can purchase eligible financial instruments using the loan provided by AFT. If you choose to use a margin loan, the eligible financial instruments in your account will serve as collateral for the loan. Before using a margin loan, you should carefully consider your financial situation and risks and consult your independent professional advisor if necessary.
Using a margin loan allows you to purchase more financial instruments than you would without the loan. Consequently, you will be more affected by price movements in the target financial instruments. If the target financial instruments depreciate, your potential losses will be greater.
When conducting margin trading, an initial margin deposit must be made in the form of cash or fully paid securities. A margin deposit is necessary because AFT will not lend you the full value of the securities you wish to purchase. A margin loan allows you to purchase securities whose value exceeds your initial margin deposit. Therefore, you will be more vulnerable to fluctuations in the prices of the securities purchased. A decline in the value of the securities purchased may result in losses exceeding your initial margin deposit and may require you to deposit additional funds or collateral to avoid the forced sale of margin securities or other securities in your account.
Under the terms and conditions of the margin loan, AFT has the right to sell, pledge, repledge, transfer, invest, use, commingle, or otherwise dispose of your margin securities and otherwise use any margin securities in its business. Default may result in the loss of your margin securities.
If you fail to meet the margin requirements, AFT has the right to liquidate or reduce positions in your account without further notice.
If you fail to meet the applicable margin requirements, AFT has the right (but not the obligation) to liquidate or reduce different types of positions in your account and/or cancel any open orders without further notice, depending on whether your "margin utilization" ratio or "collateral utilization" ratio (or both) reaches or exceeds 100%.
You will always be fully responsible for any deficit in your account balance or interest charges. For example, even if AFT exercises its rights to liquidate or reduce positions in your account, you will still be responsible for any deficit in your account balance.
In the event of a forced sale, AFT will sell all of your securities (if you have opted for a full stop-loss) or proportionally sell part of your securities (if you have opted for a partial stop-loss). You will not have the right to decide which securities to sell, the quantity to be sold, or the order in which the securities are sold, nor will you have the right to request an extension of the margin call. Additionally, you will still be responsible for repaying the deficit in your account balance and the corresponding interest.
AFT may adjust any applicable margin requirements at any time (at its discretion), and such changes will take effect immediately without further notice. You are fully responsible for ensuring that your account always has sufficient collateral or funds to meet any applicable margin requirements.
The risk of loss from financing transactions through the deposit of collateral can be substantial. You may incur losses that exceed the cash and any other assets you have deposited with the licensed person or registered institution as collateral. Market conditions may prevent the execution of contingent orders, such as "stop-loss" or "stop-limit" orders. You may be required to deposit additional margin or pay interest within a short period. If you fail to meet the required margin deposit or interest within the specified time, we may liquidate your collateral without your consent. Furthermore, you will still be responsible for repaying the deficit in your account balance and the corresponding interest. Therefore, carefully consider whether such financing arrangements are suitable for you based on your personal financial situation and investment objectives.
Before participating in securities lending, you should carefully read this information and the terms of the securities lending agreement.
By participating in securities lending, you allow AFT to borrow your securities under a title transfer, after which AFT may lend them to third parties. However, you will continue to bear the market risk of any securities borrowed by AFT (i.e., if the price of the securities decreases during the period when the securities are borrowed by AFT, the value of the securities you receive at the termination/maturity of the loan will also decrease, and vice versa).
If AFT borrows your securities, you may still choose to sell those securities at any time.
AFT may not borrow any securities from your account, so you may not be entitled to any additional income from participating in securities lending. If AFT borrows securities from you, the additional income you receive may fluctuate depending on the prevailing market conditions.
While your securities are lent out, you will not retain the voting rights and rights to attend shareholders' meetings (if applicable). When participating in securities lending, you cannot choose to lend only specific securities in your account to AFT.
You should consult a tax advisor regarding any potential tax implications arising from participating in securities lending.
Securities under the Nasdaq-Amex Pilot Program ("PP") are primarily intended for experienced investors. Before trading pilot project securities, you should consult a licensed person or registered institution and understand the pilot program. Please note that pilot project securities are not regulated on the Main Board or GEM of The Stock Exchange of Hong Kong Limited.
Trading in precious metals (including gold, silver, and other precious metals) can yield significant returns, particularly in margin trading, but it can also result in substantial losses exceeding the initial margin. Therefore, trading in precious metals is not suitable for everyone. Please note that the value of precious metals is influenced by many unpredictable global economic factors. If market conditions are unfavorable for your existing positions, we may require you to deposit additional margin funds temporarily to maintain your margin positions. If you do not deposit the required funds within the specified time, we may immediately close out all your existing margin positions, and you may be required to repay any resulting deficit in your trading account. In rapidly changing markets, placing contingent orders may not limit losses to the expected amount. Market conditions may prevent the execution of such orders. Therefore, you should seek independent financial advice to ensure that trading in precious metals is suitable for your financial situation.
Most ETFs track a portfolio of assets to diversify investment risks. These funds typically aim to track the performance of a specific index, market sector, or asset class (e.g., stocks, bonds, or commodities). However, some ETFs may invest in stock index futures contracts and other derivatives. Compared to traditional securities, derivatives are more sensitive to market price movements due to their lower margin requirements and high leverage. Therefore, even small price fluctuations in derivatives can lead to significant losses (or gains) for ETFs. Additionally, some derivatives trades are conducted over-the-counter (OTC). OTC derivative markets are usually not regulated by government agencies, and participants in these markets are not required to engage in continuous market trading for the contracts they trade. Consequently, ETFs that engage in OTC derivative trades may face liquidity risks. If market makers stop performing their duties, investors may be unable to buy or sell the ETF. ETFs that do not have their underlying assets denominated in the base currency may also face exchange rate risks. Fluctuations in currency exchange rates may negatively affect the value of the underlying assets and the price of the ETF. Before trading, customers should carefully read the ETF's prospectus, ensure they understand how the fund operates, and make their own judgment about whether the product is suitable for them.
Investments in AFTWealthCare portfolios are not capital guaranteed, carry risks, and may result in the loss of part or all of your invested capital. We are not liable for any losses you may incur due to price or exchange rate changes, transmission errors or delays in any instructions you give or receive, or changes in applicable laws.
The advice we provide is based on accurate information sources, but we make no representations or warranties, express or implied, as to the accuracy, completeness, or suitability of such advice.
Any advice, recommendations, opinions, or information we provide should be independently investigated and evaluated by you, and you are solely responsible for it. You should fully understand and be aware of all the terms and conditions of each investment and the risks involved, and agree to accept our recommended investment plan only after considering your specific objectives, financial situation, investment experience, knowledge, and particular needs, and independently reviewing and determining that the recommended investment plan is suitable for you.
You agree and acknowledge that you have sought all necessary advice and that we have informed you of all important features and risks associated with your investments, including but not limited to the following information:
You further acknowledge and accept that before or during the provision of AFTWealthCare services, we will collect, record, or consider the following information:
You expressly acknowledge that you are willing to bear all the economic consequences and risks of the investment and will consult your tax, legal, and other advisors if necessary.
Before participating in extended trading hours on the U.S. securities market, you should consider the following points. "Extended Trading Hours" refers to (a) the "Pre-Market Trading Session" from 7:00 AM to 9:30 AM Eastern Time; (b) the "Post-Market Trading Session" from 4:00 PM to 5:00 PM Eastern Time. "Regular Trading Hours" refer to the trading period from 9:30 AM to 4:00 PM Eastern Time.
1. General RisksFor financial products that can be traded during extended trading hours, price updates received during this period will affect the initial margin in your account but will not affect the maintenance margin. However, your margin utilization ratio may still change during extended trading hours due to trading activity (including trading of other financial products or currency fluctuations). If you reach or breach the margin requirements during extended trading hours, AFT may not liquidate any or all contracts and margin positions for these financial products before regular trading hours but may immediately liquidate any other financial products during regular trading hours.
4. Account BarriersFor financial products that can be traded during extended trading hours, your account barriers will not be triggered by price updates received during the extended trading hours but will only be triggered by price updates for those financial products during regular trading hours.
Participating in extended trading hours means you expressly acknowledge and agree to the specific risks and rules associated with investing during extended trading hours. AFT may not predict or describe all the unique trading risks that may arise during extended trading hours. Therefore, you agree that AFT shall not be liable for any risks you assume by participating in extended trading hours, whether mentioned above or not.
If this risk warning conflicts with AFT's general trading terms, the general trading terms shall prevail.
AFT may notify you of the extended trading hours we will not quote, the amount limits we quote, or other conditions applicable to our quotes, or publish such information on the financial product trading platform, but any such notifications are not binding on us.
You expressly acknowledge and agree that whether or not you engage in extended trading hours, the price updates received during extended trading hours for financial products tradable during this period will affect the initial margin in your account, and this may impact or reduce your ability to open new positions or withdraw funds for any financial product. Additionally, you understand that extended trading hours may not be suitable for all investors, and you are fully responsible for implementing or adopting any investment decisions or trading strategies.
Forex Touch Options are a type of binary options where the payout has only two possible outcomes: either you receive the predetermined fixed amount when the event occurs on or before the expiry date, or you lose the amount invested in the option. Simply put, Touch Options are usually held until expiration under an "all or nothing" payout structure, based on a straightforward "yes" or "no" proposition: will the currency pair* touch the set price on or before the specific date? This differs from traditional forex options, which grant the right (but not the obligation) to buy or sell a currency pair at a set price on or before a specific date.
When you trade Touch Options, the maximum loss is known. Depending on whether the position is a buy or sell, your account will fully reserve the premium or nominal/payout amount when trading Touch Options (whichever represents the maximum loss). This means the product cannot be traded on margin.
Whether Touch Options are regulated depends on their underlying asset. If the underlying asset of a binary option is traded over-the-counter (e.g., forex spot trading), it must be noted that the OTC market is largely unregulated, as it is decentralized, with trading conducted directly between two counterparties, and liquidity dispersed across different venues. Therefore, compared to the regulatory oversight and transparency of a regulated exchange, the oversight and transparency of the OTC market are significantly lower, while a regulated exchange is required to maintain a fair, orderly, and transparent market.
The tradable period for Touch Options ranges from 1 day to 12 months. Shorter-duration Touch Options carry higher risk, as investors may be affected by short-term volatility. Additionally, it can be challenging to consistently predict the performance of the underlying asset over a short period.
Unless you fully understand the fundamental aspects of Touch Options trading and the associated risks, you should not engage in such trading. By trading unregulated financial products, investors will not receive the protections provided by a regulatory framework, protections that only apply to regulated products.
*Available currency pairs include: EUR/USD, GBP/USD, EUR/GBP, USD/JPY, EUR/JPY, and AUD/USD.
For example:
A Contract for Difference (CFD) is an agreement between two parties to exchange the difference in value of a financial instrument or security from the time the contract is opened to the time it is closed. This product allows you to speculate on the future value movement of a particular asset (such as a stock). If your view is correct, you will profit from the difference in value (minus costs). If your view is incorrect, you must pay the corresponding difference in value (plus costs). Because the value of a CFD is linked to the underlying asset, its value depends on that asset. CFDs are always traded on margin (see the previous section on forex trading). CFDs are typically traded with AFT as the counterparty, but some CFDs may be traded on a regulated market. However, prices always fluctuate with the price movements of the underlying product, which, in most cases, is traded on a regulated market. The price and liquidity of single stock CFDs reflect the price and liquidity of that stock on the exchange where it is traded, while index CFDs are OTC products, with their prices determined by AFT based on the prices and liquidity of the underlying stocks, the futures market, estimated future dividends, interest rate effects, and other factors.
Please note that because CFDs are traded on margin, you may hold larger positions relative to your available funds at AFT. Consequently, relatively small negative or positive fluctuations in the underlying financial instrument can have a significant impact on your investment, making the risks associated with CFD trading relatively high. Thus, even with relatively small margin deposits, the potential returns can be substantial. However, if the total risk of your margin trading exceeds your margin deposits, your losses could exceed your margin deposits.
CFD investments are generally considered a risky form of investment. If you have previously taken a conservative approach to investing, you may wish to seek further professional advice before considering an investment in any collective investment scheme. You must recognize that you could lose all of your investment.
The information provided in this document is for general circulation only and does not constitute investment, legal, accounting, tax, or financial advice. Before committing to any investment transaction, investors should consider their specific investment objectives, financial situation, or particular needs, and independently verify any information contained on this website.
Although the information provided in this document is sourced from accurate and reliable sources, AFT makes no guarantee or assumes any responsibility for the accuracy, adequacy, reliability, timeliness, or reasonableness of such information. If you rely on the information provided in this document, you do so at your own risk.
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