1. Introduction to Plexytrade’s Risk Disclosure

1.1. Plexytrade Limited (hereinafter referred to as the “Company”, “Plexytrade”, “us”, “we”, “our”), is a registered financial services company, duly incorporated within Saint Lucia, Top Floor, Rodney Court Building, Rodney Bay Gros Islet, with Registration No 2023-00662. The Company operates globally under the esteemed name “Plexytrade”. This document aims to provide a comprehensive overview of the risks involved when engaging with financial instruments through the Plexytrade platform, particularly for new and experienced crypto investors.

1.2. The core objectives of the Company encompass a broad spectrum of activities, including – but not limited to – all commercial, financial, lending, borrowing, trading, and service operations. This also extends to participation in other enterprises as well as the specialized provision of brokerage, comprehensive training, and managed account services across a diverse range of financial instruments. These instruments include currencies (Forex), commodities, indices, precious metals, Contracts for Difference (CFDs), various cryptocurrencies, and other leveraged financial instruments. Our aim is to provide a robust and versatile trading environment for our global clientele, while ensuring transparency about potential risks.

2. Fundamental Risk Warnings for Traders

2.2. The Client bears the sole responsibility to ensure that any decision to engage in trading activities is made on an entirely informed basis. Should the Client encounter any ambiguity or lack of clarity regarding the risks associated with any specific Financial Instrument, it is strongly recommended that they seek impartial advice and consultation from a qualified independent financial advisor. Furthermore, if, even after such consultation, the Client still does not fully comprehend the risks involved in trading any Financial Instrument, they must exercise extreme caution and unequivocally refrain from engaging in such trading activities.

2.3. It is important for the Client to understand that Plexytrade does not furnish clients with any form of investment advice or specific recommendations. This includes, but is not limited to, guidance on investment strategies, financial planning, legal implications, tax obligations, regulatory compliance, or any other advisory services directly related to trading activities. Our role is to provide a platform and services, not to offer personalized investment counsel. [EXTERNAL LINK: The Importance of Independent Financial Advice – Investopedia]

3. General Risks and Acknowledgements in Trading

3.1. This section of the Risk Disclosure is specifically crafted to delineate, in general terms, the fundamental nature of risks inherent when engaging in trading Financial Instruments. This explanation is presented on a fair and transparent basis, ensuring clarity for the Client. The Client is hereby expressly forewarned of the following critical risks, which are not exhaustive but represent common challenges and potential pitfalls in the trading landscape:

1. Loss of Deposits: The Company does not and cannot guarantee that funds deposited in a Client Account will be immune to losses resulting from the Client’s transactions. This is particularly relevant in volatile markets like cryptocurrency.
2. Fluctuating Investment Value: The Client must understand that the value of any investment in Financial Instruments may both significantly increase and decrease. There is a tangible possibility that the entire investment may become worthless. This risk is amplified with highly volatile assets.
3. Acceptance of Risk: By engaging in trading, the Client acknowledges that they run a substantial risk of incurring significant losses and damages from the purchase and/or the sale of any Financial Instrument and accepts that he/she is willing to undertake this risk.
4. Past Performance Not Indicative of Future Results: Any information presented regarding the previous performance of a Financial Instrument serves purely as historical data and provides no guarantee of its current or future performance. The use of historical records does not bind or serve as a forecast as to the corresponding future performance of the Financial Instruments to which the said information refers. [EXTERNAL LINK: Understanding Past Performance Disclaimers – FINRA]
5. Speculative Nature of Transactions: The Client is hereby advised that the transactions executed through the Company’s dealing services may inherently be speculative, especially in rapidly evolving crypto markets.
6. Potential for Rapid Large Losses: The Client is explicitly warned that substantial losses can materialize within a very short timeframe, potentially equaling the entire sum of funds deposited with the Company. This is a critical consideration for leveraged positions.
7. Liquidity Risks: Certain Financial Instruments may not always possess immediate liquidity, for instance, due to reduced market demand or unforeseen circumstances. Consequently, the Client may encounter difficulties in selling such instruments or obtaining timely information regarding their true value or the full extent of associated risks. This risk is especially pronounced with lesser-known altcoins.
8. Currency Exchange Rate Fluctuations: When a Financial Instrument is traded in a currency other than the currency of the Client’s country of residence, any adverse changes in the prevailing exchange rates can negatively impact the instrument’s intrinsic value, market price, and overall performance.
9. Foreign Market Risks: Engaging in Financial Instruments on foreign markets may introduce risks that differ significantly from those typically encountered in the Client’s country of residence. Furthermore, the potential for profit or loss from transactions in foreign markets is directly affected by fluctuations in exchange rates, adding another layer of complexity.
10. Derivative Financial Instrument Risks (CFDs, Futures, etc.): A Derivative Financial Instrument (e.g., future, forward, swap, or Contract for Difference) typically represents a non-delivery spot transaction. This means it offers an opportunity to profit from, or incur losses on, changes in the price of an underlying asset such as currency rates, commodities, stock market indices, or share prices. The value of a Derivative Financial Instrument is directly influenced by the price movements of the security or any other underlying asset that forms the basis of the transaction. The Client must absolutely not purchase a Derivative Financial Instrument unless they are fully prepared and willing to undertake the profound risks of potentially losing the entirety of the money they have invested, including any additional commissions, fees, and other expenses incurred during the transaction.
11. Execution Difficulties under Market Conditions: Under specific and challenging market conditions (which may include, among other factors, force majeure event, system technical failures, communication network disruptions, severe liquidity shortages, or major market news/announcements), the successful execution of a trading order may become exceptionally difficult or, in some cases, entirely impossible. This is particularly true during periods of high volatility in crypto.
12. Limitations of Stop-Loss Orders: While placing Stop-Loss Orders is intended to limit potential losses, their effectiveness is not always guaranteed. Under certain volatile or fast-moving market conditions (e.g., “flash crashes” in crypto), the execution price of a Stop-Loss Order may deviate significantly from its stipulated price, potentially resulting in larger realized losses than initially anticipated.
13. Margin Calls and Liquidation: Should the Equity within the Client’s account become insufficient to maintain current open positions, the Client may receive a “margin call,” requiring them to deposit additional funds at very short notice or to reduce their market exposure. Failure to do so within the time required may lead to the automatic liquidation of open positions at a loss, and the Client will remain liable for any resulting deficit in their account.
14. Illiquid Currency Risks: The Client’s attention is specifically drawn to currencies traded with extreme irregularity or infrequent liquidity. In such cases, there can be no certainty that a price will always be quoted, or that it may be difficult to execute transactions easily at any quoted price due to the potential absence of a willing counterparty.
15. Online Trading Does Not Reduce Risk: It is crucial to understand that conducting trading activities online via electronic platforms does not inherently reduce or eliminate the financial risks typically associated with currency trading or any other form of financial instrument trading.
16. Tax and Duty Liabilities: The Client bears full responsibility for any and all taxes and/or other duty that may accrue in respect of his/her trades. These liabilities may be imposed or become applicable, for instance, due to changes in legislative frameworks or his/her personal tax circumstances. Tax implications for crypto assets can be complex and vary by jurisdiction.
17. Pre-Trade Cost Review: Before initiating any trading activity, the Client should diligently obtain comprehensive details of all applicable commissions, fees, and any other charges for which they will be liable. If any charges are not explicitly stated in monetary terms (but, for example, as a dealing spread), the Client should proactively request a clear written explanation, including appropriate illustrative examples, to ascertain the precise monetary implications of such charges.
18. Gap Risk: Due to sudden market events, movements, and/or conditions (such as those occurring over weekends, at the beginning of a trading week, or intra-day following the release of significant macroeconomic figures, economic or political news) causing currency markets to open with price levels substantially different from previous closing prices, a significant risk exists that orders issued to protect open positions and open new positions may be executed at prices considerably different from those designated or expected. This is often observed in crypto markets after major news or exchange outages.

4. Understanding Third-Party Risks in Brokerage

4.1. Plexytrade may, in accordance with prevailing regulations, be mandated to hold your funds in an account that is notionally segregated from the funds of other Clients and the Company’s own operational capital. However, it is important to understand that such segregation, while a regulatory requirement, does not provide an absolute or complete guarantee of protection in all unforeseen circumstances, such as the insolvency of a third-party service provider.

4.2. The Company reserves the right to pass funds received from the Client to a third party (e.g., a bank, a market, or another financial institution) to hold or control in order to effect a Transaction through or with that person or to satisfy the Client’s obligation to provide collateral (e.g. initial margin requirement) in respect of a Transaction. It is crucial to note that Plexytrade bears no direct responsibility for any acts or omissions, whether negligent or otherwise, of any such third party to whom client funds are transferred.

4.3. In scenarios where client funds are passed to a third party, that third party may hold these funds within an omnibus account and it may not be possible to separate it from the Client’s money, or the third party’s money. In the event of insolvency or any other analogous legal proceedings in relation to that third party, the Company may only have an unsecured claim against that third party on behalf of its Clients, and the Client will be exposed to the risk that the money received by the Company from the third party is insufficient to satisfy the claims of the Client with claims in respect of the relevant account. The Company does not accept any liability or responsibility for any resulting losses.

4.4. Furthermore, it is possible that Plexytrade may deposit Customer funds with a depository institution that may hold a security interest, a lien, or a right of set-off concerning those funds. Such arrangements can affect the Client’s ability to recover their funds in certain scenarios, particularly in the event of the depository’s financial distress.

4.5. Clients should be aware that any Company, Bank, or Broker through whom Plexytrade conducts transactions could have interests contrary to, or in conflict with, the Client’s individual interests. Such conflicts, while managed through internal policies, are an inherent aspect of complex financial ecosystems and should always be considered.

4.6. The insolvency of either Plexytrade itself, or of a Bank or Broker used by Plexytrade to effect its transactions, constitutes a significant risk. Such an event could lead to the involuntary closing out of the Client’s open positions, potentially against their wishes or without their direct instruction, resulting in significant financial losses. [EXTERNAL LINK: Understanding Counterparty Risk – Investopedia]

5. Risks Associated with the Trading Platform

5.1. Clients engaging in transactions on an electronic trading system are inherently exposed to various risks stemming directly from the system itself. These include potential failures of hardware and software components, which can critically impede or entirely prevent the execution of an order according to the Client’s precise instructions. Plexytrade explicitly states that it does not assume any liability in the case of such technical failures. Furthermore, the use of unstable internet connections—whether wireless connections, dial-up, or any other unreliable form at the client’s end—can lead to poor connectivity or insufficient signal strength. This can cause significant delays in the transmission of critical market data and trading instructions between the Client and Plexytrade’s Electronic Trading Platform. Such delays or disturbances may result in the client sending to the Company out-of-date ‘Market Orders’. In these circumstances, Plexytrade reserves the right to update the price to the current market rate and execute the order at the best available ‘market price’, which may differ from the price displayed at the time the order was initially placed by the Client.

5.2. The Client acknowledges and accepts that the trading system is designed to process only one Instruction at a time per account in the queue. Consequently, should the Client transmit any subsequent Instructions while a prior Instruction is still awaiting execution, these new Instructions will be ignored. During this period, an “Order is locked” message will typically appear, signifying that the system is busy processing the initial instruction until its successful completion.

5.3. The Client explicitly acknowledges that the sole reliable source of real-time Quotes Flow information is that of the actual real-time/live Server’s Quotes Base maintained by Plexytrade. Any Quotes Base displayed in the Client Terminal (e.g., MetaTrader) should not be considered an absolutely reliable source of Quotes Flow information because the connection between the Client Terminal and the Server may be disrupted at some point, and some of the Quotes may not reach the Client Terminal, presenting potentially stale data.

5.4. The Client acknowledges and agrees that once an Order has been closed or is actively undergoing execution within the trading system, it cannot be subsequently cancelled or modified. This emphasizes the finality and immutability of executed trades.

5.5. It is a critical risk that the Client may incur the total loss of all amounts initially deposited with Plexytrade as margin. Furthermore, while certain orders available on the Trading Platform (such as “stop-loss” or “limit” orders) are intended to limit potential losses to specific predefined amounts, their effectiveness cannot always be guaranteed. Under certain extreme market conditions or due to unforeseen technological limitations, it may become impossible to prevent the execution of such orders at the desired price. It is important to note that for all orders (including guaranteed stop-loss orders), the Client may still sustain significant losses in a very short period. In particular scenarios, the execution price of a Stop-Loss order may be considerably worse than its stipulated price, leading to realized losses that are significantly larger than initially expected. This is especially pertinent in fast-moving crypto markets.

5.6. In a situation where the Client has transmitted an Instruction but has not yet received confirmation of its execution, and subsequently decides to repeat the same Instruction, the Customer explicitly accepts the inherent risk of potentially executing two identical Transactions instead of the intended one. However, it is also possible that the client may receive an “Order is locked” message, as detailed in point 5.2 above, preventing the duplicate instruction.

5.7. The Client acknowledges that if a Pending Order (an order set to execute at a future price) has already been triggered and executed, but the Client simultaneously attempts to send an Instruction to modify its level and the levels of associated If-Done Orders (orders linked to the main order, like Take-Profit or Stop-Loss), the only Instruction that will successfully execute is the one pertaining to the modification of Stop-Loss and/or Take-Profit levels on the position that was opened when the Pending Order initially triggered. Any other simultaneous modifications might be disregarded, leading to unexpected outcomes.

6. Navigating Technical Risks in Online Trading

6.1. The Client – and not Plexytrade – bears the sole responsibility and liability for any financial losses that may arise from failures, malfunctions, interruptions, disconnection, or malicious actions affecting information, communication, electricity, electronic, or any other related systems. Plexytrade explicitly states that it does not assume any liability in the case of any such failures or malfunctions. [EXTERNAL LINK: Common Online Trading Risks – FINRA]

6.2. Plexytrade assumes no responsibility or liability if unauthorized third parties gain access to sensitive information. This includes, but is not limited to, electronic addresses, electronic communications, personal data, and access credentials, particularly when such information is transmitted between Plexytrade or any other involved party using the internet, other network communication facilities, telephone, or any other electronic means. The inherent security risks of unencrypted communication are detailed below, emphasizing the need for robust personal cybersecurity practices.

6.3. The Client unequivocally acknowledges that information transmitted via unencrypted email is inherently vulnerable and not protected from unauthorized access. It is strongly advised that clients use secure communication channels provided by Plexytrade for sensitive data.

6.4. During periods of exceptionally high deal flow or significant market volatility (e.g., when key macroeconomic indicators are released, leading to a “fast Market”), the Client may experience difficulties in establishing or maintaining a connection via phone or Plexytrade’s trading platform(s)/system(s). This can lead to missed opportunities or delayed order executions, especially critical in rapidly moving crypto markets.

6.5. The Client acknowledges that the reliability of the internet itself can significantly impact their access to Plexytrade’s website and/or trading platform(s)/system(s). Such impacts may include, but are not limited to, complete interruptions or transmission blackouts, software and hardware failures on either the client’s or server’s side, internet disconnections, failures of public electricity networks, or malicious cyber-attacks. Plexytrade expressly states that it is not responsible for any damages or losses resulting from any events which are beyond its reasonable control, nor for any other losses, costs, liabilities, or expenses (including, without limitation, loss of profit) which may directly or indirectly result from the Client’s inability to access Plexytrade’s Website and/or Trading System or from any delay or failure in sending orders or Transactions.

6.6. The Client is explicitly warned that when conducting trading activities on an electronic platform, they assume the significant risk of financial loss caused by (this list is illustrative and not exhaustive):

1. Failure of Client’s personal devices, trading software, or consistently poor quality of internet connection.
2. Malfunction, failure, or misuse of either the Company’s or the Client’s hardware or software components.
3. Improper setup or configuration of the Client’s trading equipment.
4. Incorrect settings applied to the Client’s Terminal (trading software).
5. Delayed or incomplete updates of the Client’s Terminal software, which can lead to compatibility issues or missed features.

6.7. In connection with the extensive use of computer equipment and data and voice communication networks for trading, the Client expressly bears the following risks, amongst others:

1. Unforeseen power cuts affecting the equipment on the Client’s side, or failures impacting the service provider or communication operator (including voice communication) serving the Client.
2. Physical damage or outright destruction of the communication channels critical for linking the Client and their provider (communication operator), or between the provider and the trading or information server of the Client.
3. Outage or unacceptably low quality of communication experienced via the channels utilized by the Client, or those used by the provider, or the communication operator (including voice communication) serving the Client.
4. Incorrect or inconsistent adherence to required settings of the Client Terminal, or untimely application of critical updates to the Client Terminal software.
5. The very nature of using communication channels, along with associated hardware and software, generates an inherent risk of non-reception of vital messages (including text messages) by the Client from Plexytrade.
6. Malfunction or complete non-operability of the trading system (platform), including potential issues with the Client Terminal itself.
7. Outage of communication via the channels utilized by Plexytrade, particularly in cases of physical damage (destruction) to the communication channels caused by third parties.

Plexytrade explicitly states that it has no liability for any resulting loss directly attributable to the aforementioned cases of technical and communication failures.

7. Risks Associated with Transactions in Financial Instruments

7.1. Investing in certain Financial Instruments involves the use of financial tools known as “gearing” or “leverage”. When considering engaging in this form of investment, the Client must be acutely aware that a high degree of “gearing” or “leverage” is a distinct and potent characteristic of Derivative Financial Instruments (like CFDs or Futures). This phenomenon stems from the margining system applied to such trades, which typically necessitates a comparatively modest initial deposit or margin relative to the total value of the underlying contract. Consequently, even a relatively small price movement in the underlying market can exert a disproportionately dramatic and amplified effect on the Client’s trading position. Should the underlying market move favorably to the Client’s position, substantial profits may be realized quickly. Conversely, an equally small adverse market movement can not only swiftly lead to the complete loss of the Client’s entire initial deposit but may also expose the Client to significant additional losses exceeding their initial capital. In the context of transactions in derivative Financial Instruments, it’s vital to remember that a derivative Financial Instrument is often a non-deliverable spot transaction giving an opportunity to make profit or loss on changes in currency rates, commodity, stock market indices or share prices called the underlying instrument. The Client must absolutely not purchase a derivative Financial Instrument unless they are fully prepared and willing to undertake the profound risks of potentially losing every cent they have invested, including any additional commissions, fees, and other expenses incurred during the transaction.

7.2. It is important for the Client to note that transactions executed through Plexytrade may not be undertaken on a globally recognized or officially designated investment exchange. Accordingly, trading outside of a regulated exchange environment may expose the Client to greater and potentially different risks compared to transactions conducted on such exchanges. The specific terms and conditions, as well as the trading rules governing these transactions, may be established solely by the Execution Venue. The Client may only be able to close an open position of any given contract during the specific opening hours of that Execution Venue. Furthermore, the Client might be restricted to closing any open position exclusively with the same counterparty with whom the position was originally opened. In the context of transactions in Financial Instruments facilitated by Plexytrade, the Company utilizes a Trading Platform for these transactions which does not formally fall within the definition of a “recognized exchange” or a “Multilateral Trading Facility” as per standard financial regulations. This structure carries unique implications for liquidity and counterparty risk.

7.3. This comprehensive Risk Disclosure document, while diligently prepared, inherently cannot and does not claim to fully disclose or explain every single risk, nuance, or other significant aspect involved in dealing with all forms of Financial Instruments and utilizing all investment services. Its primary purpose is to articulate, in general and accessible terms, the fundamental nature of the risks encountered when engaging in transactions involving Financial Instruments, presented on a fair and non-misleading basis. Clients are strongly advised to seek independent financial advice if any part of this disclosure remains unclear or if they require a more tailored understanding of their specific risk exposure. [EXTERNAL LINK: Understanding Investment Risk – Investor.gov]