By browsing this website, you are proposing to trade and invest in financial instruments that hold a high level of risk to your capital and investments. These investments are not suitable for all investors and you should ensure yourself that you understand all the risks and seek independent advice if necessary. KABKG is under no obligation to assess the suitability of these products for your particular circumstances.
Risk Warning Notice
This Notice is provided by the Company (“we”, “us”) to the Client (“you”, “your”). The following statements are intended to make you aware of and disclose to you the potential risk and loss in respect to trading on the financial markets.
This notice cannot disclose all the risks and other significant aspects of foreign exchange and derivative products such as, Contracts for Differences (CFDs) and Forex. You should not deal in these products unless you understand their nature and the extent of your exposure to risk. You should also be satisfied that any product is suitable for you in the light of your circumstances and financial position.
Although CFDs and Forex can be utilized for the management of investment risk, some of these products are unsuitable for many investors. Different instruments involve different levels of exposure to risk and in deciding whether to trade in such instruments you should be aware of the following points:
Effect of Leverage:
When executing trading operations under margin trading conditions, even small market movements may have great impact on a Client’s trading account due to the effect of leverage. The Client must consider that if the trend of the market is against them, the Client may sustain a total loss of their initial margin and any additional funds deposited to maintain open positions. The Client shall hold full responsibility of all risks, financial resources and the chosen trading strategies used. Due to the high level of risk, we recommend you to monitor and follow up on your trading transactions in your account at all times. We highly recommend maintaining a Margin Level no lower than 1,000% (margin level is the account equity divided on the margin as a percentage), as well as placing Stop Loss orders to limit potential losses. The client will be held responsible for all the losses resulting from placing an order from previous profits and margin on an erroneous price as the company will close this order and will not execute it.
Transactions in futures involve the obligation to make, or to take, delivery of the underlying asset of the contract at a future date, or in some cases to settle the position with cash. They carry a high degree of risk. The ‘gearing’ or ‘leverage’ often obtainable in futures trading means that a small deposit or down payment can lead to large losses as well as gains. It also means that a relatively small movement can lead to a proportionately much larger movement in the value of your investment, and this can work against you as well as for you. Futures transactions have a contingent liability, and you should be aware of the implications of this, in particular the margining requirements.
Highly Volatile Instruments:
Some Instruments trade within wide intraday ranges with volatile price movements. Therefore, the Client must carefully consider that there is a high risk of losses as well as profits.
Contracts for Differences:
Investing in a Contract for Differences carries the same risks as investing in a future or an option and the Client should be aware of these as set out above. Transactions in Contracts for Differences may also have a contingent liability and the Client should be aware of the implications of this as set out below.
Clearing House Protections:
On many exchanges, the performance of a transaction is ‘guaranteed’ by the exchange or clearing house. However, this guarantee is unlikely in most circumstances to cover you, the customer, and may not protect you if your firm or another party defaults on its obligations to you. There is no clearing house for traditional options, nor normally for off–exchange instruments which are not traded under the rules of a recognized or designated investment exchange.
Foreign markets will involve different risks from the Kuwait markets. In some cases the risks will be greater. The potential for profit or loss from transactions on foreign markets or in foreign denominated contracts will be affected by fluctuations in foreign exchange rates.
Contingent Liability Investment Transactions:
Contingent liability investment transactions, which are margined, require you to make a series of payments against the purchase price, instead of paying the whole purchase price immediately.
If you trade in futures, contracts for differences or sell options, you may sustain a total loss of the margin you deposit with your firm to establish or maintain a position. If the market moves against you, you may be called upon to pay substantial additional margin at short notice to maintain the position. If you fail to do so within the time required, your position may be liquidated at a loss and you will be responsible for the resulting deficit.
Even if a transaction is not margined, it may still carry an obligation to make further payments in certain circumstances over and above any amount paid when you entered the contract. Contingent liability investment transactions which are not traded on a recognized investment exchange may expose you to substantially greater risks than those that are so traded.
If you deposit collateral, the way in which it will be treated will vary according to the type of transaction and where it is traded. There could be significant differences in the treatment of your collateral depending on whether you are trading on a recognized or designated investment exchange, with the rules of that exchange (and the associated clearing house) applying, or trading off–exchange. Deposited collateral may lose its identity as your property once dealings on your behalf are undertaken. Even if your dealings should ultimately prove profitable, you may not get back the same assets which you deposited, and may have to accept payment in cash. You should ascertain from your firm how your collateral will be dealt with.
Commissions and Charges:
Before you begin to trade, you should obtain details of all commissions and other charges for which you will be liable. If any charges are not expressed in money terms (but, for example, as a percentage of contract value), you should obtain a clear explanation, including appropriate examples, to establish what such charges are likely to mean in specific money terms.
The commissions and charges of KABKG are clarified on the website.
Suspensions of Trading:
Under certain trading conditions it may be difficult or impossible to liquidate a position. This may occur, for example, at times of rapid price movement if the price rises or falls in one trading session to such an extent that under the rules of the relevant exchange trading is suspended or restricted. Placing a Stop Loss will not necessarily limit the Client’s losses to the intended amounts, because market conditions may make it impossible to execute such an Order at the stipulated price. In addition, under certain market conditions the execution of a Stop Loss Order may be worse than its stipulated price and the realized losses can be larger than expected.
Off-exchange Transactions in Derivative Financial Instruments:
FX, CFDs and metals trading offered by the Company are off-exchange transactions. While some off-exchange markets are highly liquid, transactions in off-exchange or nontransferable derivatives may involve greater risk than investing in on-exchange derivatives because there is no exchange market on which to close out an Open Position. It may be impossible to liquidate an existing position, to assess the value of the position arising from an off-exchange transaction or to assess the exposure to risk. Bid prices and Ask prices need not be quoted, and, even where they are, they will be established by dealers in these instruments and consequently it may be difficult to establish what a fair price is.
Trading in KABKG offered instruments does not provide any right to the underlying instruments, or in the case of CFDs referenced to shares or trading in stocks and indexes, to voting rights.
In certain cases, such as during weekends and market closing hours, there might be rapid price movements in these instruments and may cause price gapping, which makes it difficult to close open positions at the requested price if within the resulting gap and may cause slippage.
Technical Problems Risk:
- The Client shall assume the risk of financial loss caused by the failure of information, communication, electronic and other systems.
- When executing trading operations through the client terminal, the Client shall assume the risk of financial loss, which can be caused by:
- The failure of Client hardware, software and internet connection;
- Outage (unacceptably low quality) of communication via the channels used by the Client, or the channels used by the provider, or communication operator (including voice communication) that are used by the Client;
Wrong or inconsistent with requirements settings of the Client Terminal;
- Untimely update of the Client Terminal;
- The Client’s ignorance of the applicable rules described in the MetaTrader User Guide and in the Help section.
- The Client acknowledges that at the moment of peak load there may be some difficulties in getting telephone communication with the duty operator, especially on the fast market (for example, when key economic indicators are released).
The Client shall assume the risk of any financial loss caused by the Client either not receiving a notification from the Company or a delay in receiving it. The Client shall acknowledge that unencrypted information transmitted by email is not protected from unauthorized access.
The Client shall agree that the Company have the right to delete messages sent to the Client through internal mail 3 (three) days after they have been sent, despite the fact that the Client may not have received them yet. The Client shall hold full responsibility for the safekeeping of information received from the Company and assumes the risk of any financial loss caused by unauthorized access to the Client’s trading account by a third party.
Abnormal Market Conditions:
The Client shall acknowledge that under abnormal market conditions, the execution time for Client instructions may increase.
The Client shall assume all risks of financial loss caused by a force majeure.
The Client shall acknowledge that (with the exception of KAB Trader Platform) only one request or instruction is allowed in the queue. Once the Client has sent a request or instruction, any other request or instruction sent by the Client will be ignored. In the “Order” window, the “Order is locked” message will appear. As for orders requested through KABKG platform, the orders are executed according to the company’s execution policy.
The Client shall acknowledge that the only reliable source of quoting information is the server for Clients with live accounts. The quote base in the client terminal shall not be considered a reliable source of quoting information, as in the case of a bad connection between the client terminal and the server, some of the quotes simply may not reach the client terminal.
The Client shall acknowledge that when the Client closes the window to place/modify/delete an order, as well as the window to open/close a position, the instruction or request which has been sent to the server will not be cancelled.
The Client shall assume the risk of executing unplanned transactions in the case that the Client sends another instruction before receiving the result from the instruction sent previously.
The Client shall acknowledge that if an order has already been executed but the Client sends an instruction to modify the level of a pending order and the levels of Stop Loss and/or Take Profit orders at the same time, the only instruction that will be executed is the instruction to modify the Stop Loss and/or Take Profit levels on the position opened on that order.