Risk Warning

Leveraged products

A simplified summary on leveraged products and the risks associated with them

Trading in financial products always involves a risk. As a general rule, you should therefore only trade in financial products if you understand the products and the risks associated with them. We have endeavoured in the following sections to cover the key leveraged products that Saxo Markets offers to its clients as well as the risks associated with these particular products.

Foreign exchange trading (FOREX)

When trading in foreign exchange, the investor takes a view on the development of the price of one currency relative to another, where one is sold and the other is purchased. By way of example, an investor may sell British pounds (GBP) against the US dollar (USD) if he expects that the USD will increase relative to the GBP.

Foreign exchange is traded as a leveraged product, which means that for a small outlay, you can open and trade larger positions in the market. Foreign exchange may be traded as FX Spot, FX Forward or FX Options. FX Spot is the purchase of one currency against the sale of another for immediate delivery. FX Forward and FX Options transactions are settled on an agreed date in the future at prices which are agreed on the date of the transaction. FX Forward trading involves an obligation to enter into the transaction at the agreed price on the settlement date. A purchaser of FX Options has a right to enter into a transaction in the underlying FX Spot currency pair on the expiry date if the price is more favourable than the market price at this time. On the other hand, a seller of options has an obligation to enter into a transaction with the purchaser (Saxo Markets) on the settlement date if requested by the purchaser. Purchased options therefore involve a limited risk in the form of a premium which is payable when the contract is made, while options that have been sold involve unlimited risk in the form of changes to the price of the underlying FX Spot currency pair.

The currency exchange market is the world's largest financial market with 24 hour trading on working days. It is characterised, among other things, by a relatively low profit margin compared to other products. A high profit is therefore subject to a large trading volume, which is achieved for instance by margin trading as described above. When trading in foreign exchange, a gain realised by one market player will always be offset by another player's loss. Foreign exchange transactions are always made with Saxo Markets as counterparty, and Saxo Markets quotes prices on the basis of prices that can be obtained in the market.

Please note that as foreign exchange is margin traded, it allows you to take a larger position than you would otherwise be able to based on your funds with Saxo Markets. As such, a relatively small negative or positive market movement can have a significant effect on your investment. Foreign exchange trading therefore involves a relatively high level of risk. This makes the potential gain quite high, even if the deposit is relatively small. If your total exposure on margin trades exceeds your deposit, you risk losing more than your deposit.

FX Touch Options

An FX Touch Option is a type of binary option in which the payout can take only two possible outcomes: either you are paid the return in a predefined fixed amount upon the occurrence of the event on or before the expiry date, or you lose the amount invested in the option. Simply stated, a Touch Option is generally held until expiry in an “all or nothing” payout structure and based on a simple “yes” or “no” proposition: Will a currency pair* touch a set price on or before a certain date? This is different from a traditional FX option which grants the right, but not the obligation to buy or sell a currency pair at a set price on or before a certain date.

The maximum loss is known when you trade a Touch Option, and depending on whether it is a buy or sell position, the premium or the notional/payout (whichever represents the maximum loss) is reserved from your account in full when the Touch Option is dealt, i.e., the product cannot be traded on margin.

Whether a Touch Option is regulated will depend on its underlying asset. Where the underlying asset of the binary option is traded OTC such as FX spot, it is important to note that the OTC markets are largely unregulated due its decentralised structure where deals take place directly between two counterparties and liquidity is fragmented across different venues. Therefore, the level of regulatory oversight and transparency in an OTC market is very low compared to that of a formal exchange which is required to maintain fair, orderly and transparent markets. 

Tradeable tenures for touch options are available from 1 day to 12 months. Touch Options with shorter tenures are riskier as investors may be exposed to short term volatility and further, it is challenging to consistently predict the performance of an underlying asset within a short period of time. 

You should not engage in Touch Options trading unless you fully understand the basic aspects of such trading as well as its associated risks. By trading in unregulated financial products, investors will not have the protection afforded under the regulatory framework which are only available in the context of regulated offerings.  

*Currency pairs available include: EURUSD, GBPUSD, EURGBP, USDJPY, EURJPY and AUDUSD.

For example:

• If you buy a touch or no-touch option, then the maximum amount you can lose is the premium paid up-front (you stand to receive the notional/payout amount if the option “touches”). You must be able to pay this premium upfront, which is deducted from your account at the point of trade, and the market value of the touch option position cannot be used as leverage to support any other existing or new open positions from a margin perspective.

• If you sell a no-touch or touch option, then you receive the premium up-front (which you keep in entirety but may need to pay the notional/payout amount if the option “touches”). The premium is credited to your account at the point of trade, but the full notional/payout amount is reserved from the account and cannot be used over the touch option’s lifetime to support any other existing or new open positions from a margin perspective.

CFDs

A CFD - or Contract for Difference - is an agreement between two parties to exchange the difference between the purchase and sale price of a financial instrument or security. The product allows you to take a view on the future increases or decreases in the value of a specific asset, for instance a share. If your view proves to be correct, you will make a profit from the difference in value (less costs). If the view you took turns out to be wrong, you will have to pay the difference in value (plus costs). Being tied to an underlying asset, the value of a CFD depends on that asset. CFDs are always margin traded (see the above paragraph on foreign exchange transactions). CFDs are normally traded with Saxo Markets as the counterparty, but some CFDs may be traded on a regulated market. However, the price always moves with the price of the underlying product, which is in most cases traded on a regulated market. The price and liquidity of CFDs on individual shares mirror the price and liquidity of the share on the market in which the share is admitted for trading, whereas, for instance, index CFDs are over-the counter(OTC) products with a price fixed by Saxo Markets on the basis of the price and liquidity of the underlying shares, the futures market, estimated future dividends, the effects of interest rates, etc.

Please note that as CFDs are margin traded, it allows you to take a larger position than you would otherwise be able to based on your funds with Saxo Markets. As such, a relatively small negative or positive movement in the underlying instrument can have a significant effect on your investment. CFD trading therefore involves a relatively high level of risk. This makes the potential gain quite high, even if the deposit is relatively small. If your total exposure on margin trades exceeds your deposit, you risk losing more than your deposit.

Please click here for the Risk Fact Sheet and Risk Disclosure Statement in relation to CFDs.

Futures 

Futures trading involves trading on the price of a specific underlying asset going up or down in the future. A future gives the holder a standardised obligation to either buy or sell the underlying asset at a specified price at a certain date in the future. The underlying asset may, for instance, be raw materials, agricultural produce or financial products. Depending on the nature of the future, the asset either has to be settled for the price difference or by actual delivery at the settlement date. Saxo Markets does not support actual physical delivery. Futures are always traded on margin (see "Foreign exchange trading" above). Futures are always traded in a regulated market, either by direct trading in the stock exchanges' trading systems, or by reporting of transactions. 

Please note that as futures are margin traded, it allows you to take a larger position than you would otherwise be able to based on your funds with Saxo Markets. As such, a relatively small negative or positive market movement can have a significant effect on your investment. Futures trading therefore involves a relatively high degree of risk. This makes the potential gain quite high, even if the deposit is relatively small. If your total exposure on margin trades exceeds your deposit, you risk losing more than your deposit.

Contract options

Option trading is highly speculative and is not suitable for all investors due to the risks involved. Buyers and sellers of Contract Options should familiarize themselves with the type of option (i.e. put or call, bought or sold) they intend to trade and the associated risks. Contract Options are traded with Saxo Markets as counterparty to the trades.

A Contract Option gives you the right or the obligation to either buy or sell a specified amount or value of a particular underlying asset at a fixed exercise price, by the option being exercised either before or on its specified expiration date. A Contract Option which gives you the right to buy or the obligation to sell is a call option and a Contract Option that gives you the right to sell or the obligation to buy is a put option.

A Contract Option that is in the money on expiry will always be exercised.

Trading Contract Options involves a high level of risk. Contract Options that gives you the right to either sell or buy an underlying asset (bought Contract Options) might expire worthless and your initial investment ( i.e. premium and transaction costs) will be lost. Contract Options that give you the obligation to either sell or buy an underlying asset (sold Contract Options) can result in substantial (potentially unlimited) losses. To assure you will be able to cover losses on sold Contract Options Saxo Markets will require margin charges. Nonetheless, potential losses can exceed the margin charged and you will be liable for these losses.

If your total exposure on margin trades exceeds your deposit, you risk losing more than your deposit. If the underlying asset of a Contract Option is a margin traded product (i.e. a derivative), and if the Contract Option is being exercised by the buyer, then the buyer (in case of a call option) or the seller (in case of a put option) of the Contract Option will acquire a position in the underlying margin traded product with associated risks as well as liabilities to provide margin.

Please note that by default, you will be enabled for buy Contract Options (puts and calls) only. Should you wish to be enabled to write / sell Contract Options (puts and calls), please contact your account manager.

Stock Options

Final Settlement of Stock Options requires physical delivery of the underlying stocks vs. payment of the strike value in cash. In case a client is holding a stock options position, but is short either cash or stocks, he will not be able to settle the options position and the client will fail to deliver on his contractual obligation.

Final Settlement of a stock option position occurs when the holder of a long option position exercises his right to buy or sell the underlying stocks on and/or, in case of American Style options, prior to expiry. On expiry, all in-the-money long option positions held by clients of Saxo Markets are automatically exercised. Both prior as well as on expiration, clients who hold short option positions will be assigned by means of a random assignment lottery. At expiry, there should be no "assume" procedure for delivering on short option positions. Instead of the assume procedure, the clearing statements from the broker should be used to reflect the true exchange expiry outcome.

As a general rule, Saxo Markets clients have responsibility to meet the delivery requirements related to their option positions. As such Saxo Markets will not pre-emptively act on client positions to avoid delivery failure. It will be the responsibility of the client to manage his positions especially when approaching expiry to make sure he can meet any delivery obligations. Notwithstanding the above, in case Saxo Markets could be exposed to uncollateralized losses incurred by clients, Saxo Markets reserves the right to act pre-emptively and close-out some or all of the client's positions that could cause potential losses which the client cannot carry on his account balances. Pre-emptive close-out will be conducted under the responsibility of the Saxo Markets' Market Analysis & Control.

In case a client failed to meet his delivery obligation, Saxo Markets will act on behalf of the client and without the need to notify the client in advance to resolve the delivery failure. Saxo Markets will resolve a short stock position by acquiring the required stocks at market price, Saxo Markets will resolve a short cash position by liquidating any or all positions under delivery and if available any long option position that provided cover for a settling short option position. In the Exchange Traded Options context, this will be referred to as default handling. Transactions executed for the purpose of default handling, will be charged additional (substantial) commissions. Default Handling will be performed by Saxo Markets' Markets Desk.

Therefore Saxo Markets recommends the Clients to close the position before expiry.

Cryptocurrencies

Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not generally backed or supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. The value of cryptocurrency may be derived from the continued willingness of market participants to exchange fiat currency for cryptocurrency, which may result in the potential for permanent and total loss of value of a particular cryptocurrency should the market for that cryptocurrency disappear.

Underlying cryptocurrency markets and cryptocurrency derivatives markets may not be subject to requirements usually associated with a regulated licensed financial product, including, but not limited to, market integrity and price transparency rules, registration and/or licensing requirements, audit, market surveillance and trade reporting requirements, anti-money laundering and anti-fraud rules, disaster recover or cybersecurity requirements, and market manipulation rules. As a result, cryptocurrency markets may be particularly susceptible to manipulation and fraud, which increases the risk of trading in cryptocurrency or cryptocurrency derivatives. Cryptocurrency trading carries additional risks such as hard forks or discontinuation. When a hard fork occurs, there may be substantial price volatility around the event.

In addition, cryptocurrency derivatives are margin products, meaning losses or gains are increased. Before trading, you should be aware that trading in cryptocurrency derivatives allows you to take a larger position than you would otherwise be able to based on your funds with Saxo Markets. As such, a relatively small negative or positive market movement can have a significant effect on your investment. Derivatives trading therefore involves a relatively high degree of risk. This makes the potential gain quite high, even if the deposit is relatively small. If your total exposure on margin trades exceeds your deposit, you risk losing more than your deposit.

To find out more about cryptocurrencies and risks, you may wish to visit the MoneySense website here.

Overseas-Listed Investment Products

An overseas-listed investment product* is subject to the laws and regulations of the jurisdiction it is listed in. Before you trade in an overseas-listed investment product or authorise someone else to trade for you, you should be aware of:

• The level of investor protection and safeguards that you are afforded in the relevant foreign jurisdiction, as the overseas-listed investment product would operate under a different regulatory regime.
• The differences between the legal systems in the foreign jurisdiction and Singapore that may affect your ability to recover your funds.
• The tax implications, currency risks, and additional transaction costs that you may have to incur.
• The counterparty and correspondent broker risks that you are exposed to.
• The political, economic and social developments that influence the overseas markets you are investing in.

These and other risks may affect the value of your investment. You should not invest in the product if you do not understand or are not comfortable with such risks.

* An "overseas-listed investment product" in this statement refers to a capital markets products that is approved in principle for listing and quotation only on, or listed for quotation or quoted only on, one or more overseas exchanges.

1. This statement is provided to you in accordance with paragraph 29D of the Notice on the Sale of Investment Products [SFA04-N12].
2. This statement does not disclose all the risks and other significant aspects of trading in an overseas-listed investment product. You should undertake such transactions only if you understand and are comfortable with the extent of your exposure to the risks.
3. You should carefully consider whether such trading is suitable for you in light of your experience, objectives, risk appetite, financial resources and other relevant circumstances. In considering whether to trade or to authorise someone else to trade for you, you should be aware of the following:

Differences in Regulatory Regimes 

1. Overseas markets may be subject to different regulations, and may operate differently from approved exchanges in Singapore. For example, there may be different rules providing for the safekeeping of securities and monies held by custodian banks or depositories. This may affect the level of safeguards in place to ensure proper segregation and safekeeping of your investment products or monies held overseas. There is also the risk of your investment products or monies not being protected if the custodian has credit problems or fails. Overseas markets may also have different periods for clearing and settling transactions. These may affect the information available to you regarding transaction prices and the time you have to settle your trade on such overseas markets.
2. Overseas markets may be subject to rules which may offer different investor protection as compared to Singapore. Before you start to trade, you should be fully aware of the types of redress available to you in Singapore and other relevant jurisdictions, if any.
3. Overseas-listed investment products may not be subject to the same disclosure standards that apply to investment products listed for quotation or quoted on an approved exchange in Singapore. Where disclosure is made, differences in accounting, auditing and financial reporting standards may also affect the quality and comparability of information provided. It may also be more difficult to locate up-to-date information, and the information published may only be available in a foreign language.

Differences in legal systems 

4. In some countries, legal concepts which are practiced in mature legal systems may not be in place or may have yet to be tested in courts. This would make it more difficult to predict with a degree of certainty the outcome of judicial proceedings or even the quantum of damages which may be awarded following a successful claim.
5. The Monetary Authority of Singapore will be unable to compel the enforcement of the rules of the regulatory authorities or markets in other jurisdictions where your transactions will be effected.
6. The laws of some jurisdictions may prohibit or restrict the repatriation of funds from such jurisdictions including capital, divestment proceeds, profits, dividends and interest arising from investment in such countries. Therefore, there is no guarantee that the funds you have invested and the funds arising from your investment will be capable of being remitted.
7. Some jurisdictions may also restrict the amount or type of investment products that foreign investors may trade. This can affect the liquidity and prices of the overseas-listed investment products that you invest in.

Different costs involved

8. There may be tax implications of investing in an overseas-listed investment product. For example, sale proceeds or the receipt of any dividends and other income may be subject to tax levies, duties or charges in the foreign country, in Singapore, or in both countries.
9. Your investment return on foreign currency-denominated investment products will be affected by exchange rate fluctuations where there is a need to convert from the currency of denomination of the investment products to another currency, or may be affected by exchange controls.
10. You may have to pay additional costs such as fees and broker's commissions for transactions in overseas exchanges. In some jurisdictions, you may also have to pay a premium to trade certain listed investment products. Therefore, before you begin to trade, you should obtain a clear explanation of all commissions, fees and other charges for which you will be liable. These charges will affect your net profit (if any) or increase your loss.

Counterparty and correspondent broker risks  

11. Transactions on overseas exchanges or overseas markets are generally effected by your Singapore broker through the use of foreign brokers who have trading and/or clearing rights on those exchanges. All transactions that are executed upon your instructions with such counterparties and correspondent brokers are dependent on their respective due performance of their obligations. The insolvency or default of such counterparties and correspondent brokers may lead to positions being liquidated or closed out without your consent and/or may result in difficulties in recovering your monies and assets held overseas.

Political, Economic and Social Developments

12. Overseas markets are influenced by the political, economic and social developments in the foreign jurisdiction, which may be uncertain and may increase the risk of investing in overseas-listed investment products.

SaxoWealthCare

Investments into a SaxoWealthCare portfolio are not capital guaranteed and are subject to risks and the potential loss of some or the whole of the principal invested, and we are not responsible for any loss that may be suffered by you arising from or in connection with movement in prices or exchange rates, errors or delays in the transmission of any instruction from or to you or changes in any applicable law.

Advice provided by us will be based on information from sources believed to be accurate, however no representation or warranty, express or implied is made by us as to the accuracy, completeness or suitability of such advice.

You agree that you are solely responsible for making your own independent investigation and appraisal of any advice, recommendations, view, opinion or information provided by us. You shall fully understand and familiarise yourself with all the terms and conditions of each investment and the risks involved, and agree that you will only accept our recommended investment plan on the basis of your own independent review and determination that the recommended investment plan is suitable and appropriate for you, taking into account your specific objectives, financial situation, investment experience, knowledge and particular needs.

You agree and acknowledge that you have made all necessary enquiries and we have informed you of all material features and risks involved in respect of your investments including but not limited to information on:

a) the nature and objective of your investments;
b) the key benefits and risks of your investments;
c) details of the providers of your investments;
d) your key rights with respect to your investments;
e) the intended investment horizon of your investments;
f) the ease of converting your investments to cash;
g) the expected level of your risk tolerance in respect of your investments;
h) the commitment required from you in respect of your investments;
i) the pricing of your investments;
j) the fees and charges to be borne by you in respect of your investments;
k) the frequency of reports to be provided to you in respect of your investments;
l) any applicable charges or restrictions on withdrawal, surrender or claim procedures of your investments;
m) any applicable warnings, exclusions and disclaimers; and
n) information in relation to where the prospectus in respect of your investments (if applicable) may be accessed, or if we consider it appropriate, an abridged version of such prospectus.

You further acknowledge and accept that we will not collect, document or take into account any of the following information before, or in the course of, providing you with the SaxoWealthCare service: 

a) Your employment status;
b) Your financial situation, including assets, liabilities, cash flow and income;
c) The source and amount of your regular income;
d) Your financial commitments;
e) Your current investment portfolio (including any life policies); and 
f) Whether the amount to be invested by you is a substantial portion of your assets. 

You expressly acknowledge that you have the appetite to assume all economic consequences and risks of your investments and to the extent necessary, have consulted your own tax, legal and other advisers.

Securities Lending

You should carefully read this information and the Securities Lending Terms before participating in Securities Lending.

By participating in Securities Lending, you permit Saxo Markets to borrow securities from you on a title transfer basis, which Saxo Markets may thereafter on-lend to third parties. However, you continue to maintain market risk on any securities which Saxo Markets has borrowed from you (i.e. if the price of the securities decreases while the securities are loaned to Saxo Markets, then the value of the securities which you will receive upon the termination/expiry of the loan will decrease; and vice versa).

Where Saxo Markets has borrowed your securities, you can still choose to sell such securities at any time.

It is possible that Saxo Markets does not borrow any of the securities on your account and therefore you may not receive any additional revenue from participating in Securities Lending. If Saxo Markets borrows securities from you, the additional revenue which you receive may fluctuate because of prevailing market conditions.

While your securities are loaned out, you will not retain voting rights and the right to attend general meetings of shareholders (as applicable). When participating in Securities Lending, it will not be possible to choose to make only certain securities on your account available for lending to Saxo Markets.

You should consult a tax advisor on any potential tax implications that you may incur by participating in Securities Lending.

Margin Lending

With Margin Lending, you can purchase eligible instruments using a loan provided to you by Saxo. Should you choose to use a margin loan, eligible instruments in your account will act as collateral for the loan. You should carefully consider your financial situation, the risks and consult your independent professional advisors (as necessary) prior to using a margin loan.

Margin Lending provides greater market exposure

Using a margin loan allows you to purchase more instruments than would be possible without a loan. Therefore, your exposure to changes in the prices of the underlying instruments will be greater. Your potential losses, in the case that the underlying instruments decease in value, will be greater.

You may lose more money than your initial deposit

A decline in the value of the purchased instruments may result in losses in excess of your initial deposit and may require you to deposit additional funds or eligible collateral to meet any applicable margin requirements.

Saxo’s Right of Use

Under the Margin Lending Terms, you authorise Saxo to mortgage, charge, pledge or hypothecate any instruments used as collateral for the margin loan or any instruments that are purchased using the margin loan; but only up to the extent of your outstanding liabilities toward Saxo.

This means that such instruments could, for example, be lent to or deposited with third parties, whereby those third parties would have an interest (e.g. a lien or charge) over such instruments.

Therefore, in the event of Saxo’s insolvency or the insolvency of such third parties, you may not be able to recover such instruments fully and potentially suffer losses.

You should only request for Margin Lending if you have fully understood and accepted the risks of providing Saxo the authorisation as described above.

If you fail to meet margin requirements, Saxo has the right to initiate the closure or reduction of positions in your account without notice

If you fail to meet the applicable margin requirements, Saxo has the right (but is not obliged) to close or reduce different types of positions on your account and/or cancel any open orders without notice, depending on whether your “margin utilisation” ratio or “collateral utilisation” ratio (or both) has reached or exceeded 100%.

You are responsible for any deficit on the account at all times

At all times, you are solely responsible for any negative balance or interest on any of your accounts. For example, you remain responsible for any negative deficit on your account that arises even after Saxo has exercised its right to close or reduce the positions in your account.

Saxo may increase the applicable margin requirements at any time without notice

Any applicable margin requirement may be adjusted by Saxo at any time (at its sole discretion) and take effect immediately without notice. It is your sole responsibility to ensure that your account has sufficient collateral or funds to meet any applicable margin requirements at all times.

No Warranty or Liability

The information presented herein is intended for general circulation and does not constitute investment, legal, accounting, tax or financial advice. It does not take into account the specific investment objectives, financial situation or particular needs of any person, and any information contained herein should be verified independently, taking into account, the specific investment objectives, financial situation or particular needs of the investor, before the investor makes a commitment to transact in any investment.

Although information presented in this document has been obtained or derived from sources believed to be correct and reliable, Saxo Markets makes no warranty or accepts any liability of any kind as to its accuracy, adequacy, reliability, timeliness or reasonableness of such information. You assume all risks for any reliance on the information presented herein.

Extended Hours Trading

You should consider the following points before engaging in Extended Hours Trading in the US (United States) securities market. "Extended Hours Trading" means trading in (a) "Pre-Market Trading Hours" of between 7:00 a.m. and 9:30 a.m. Eastern Time; and (b) "After-Hours Trading Hours" of between 4:00 p.m. and 5:00 p.m. Eastern Time respectively. "Regular Hours Trading" means trading from 9:30 a.m. to 4:00 p.m. Eastern Time.

1. General Risks

1. Risk of Lower Liquidity. Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more orders that are available in a market, the greater the liquidity. Liquidity is important because with greater liquidity it is easier for investors to buy or sell securities, and as a result, investors are more likely to pay or receive a competitive price for securities purchased or sold. There may be lower liquidity during Extended Hours Trading compared to Regular Hours Trading. As a result, your order in Extended Hours Trading may only be partially executed, not executed at all, or may receive inferior pricing.
2. Risk of Higher Volatility. Volatility refers to the changes in price that securities undergo when trading. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility during Extended Hours Trading. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price when engaging in Extended Hours Trading than you would during Regular Hours Trading.
3. Risk of Changing Prices. The prices of securities traded during Extended Hours Trading may not reflect the prices in Regular Hours Trading. As a result, you may receive an inferior price when engaging in Extended Hours Trading than you would during Regular Hours Trading. Additionally, securities underlying the indexes or portfolios will not be regularly trading as they are during Regular Hours Trading or may not be trading at all. This may cause prices during Extended Hours Trading not reflecting the prices of those securities when they open for trading.
4. Risk of Unlinked Markets. Depending on the Extended Hours Trading system or the time of day, the prices displayed on a particular Extended Hours Trading system may not reflect the prices in other concurrently operating Extended Hours Trading systems dealing in the same securities. Accordingly, you may receive a price in one Extended Hours Trading system that is inferior to the price you would receive in another Extended Hours Trading system.
5. Risk of News Announcements. Normally, issuers make news announcements that may affect the price of their securities after Regular Hours Trading. Similarly, important financial information is frequently announced outside of Regular Hours Trading. In Extended Hours Trading, these announcements may occur during trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.
6. Risk of Wider Spreads. The spread refers to the difference between the price at which a security can be purchased and the price at which it can be sold. Lower liquidity and higher volatility in Extended Hours Trading may result in wider than normal spreads for a particular security.

2. Order Handling

1. Limit Orders. All existing limit orders placed with respect to eligible Instruments which have the ‘Extended Hours’ option enabled on the respective trade tickets will continue to be executed during Pre-Market Trading Hours or After-Hours Trading Hours sessions. Any residual unfilled limit orders existing after the session close of (1) Pre-Market Trading Hours will be rolled into the continuous session of Regular Hours Trading; (2) Regular Hours Trading will be rolled into the continuous session of After-Hours Trading; and (3) After-Hours Trading Hours will be rolled into the continuous session of Pre-Market Trading Hours, provided such limit order is not cancelled, expired, or as otherwise indicated by you.
2. Stop Orders and Conditional Orders. Stop orders and Conditional orders will not be triggered by price updates received for Instruments available for and during Extended Hours Trading, and will only be triggered by price updates for such Instruments during Regular Hours Trading
3. Corporate Actions. Certain Instruments affected by a corporate action event may not be allowed to trade during the Extended Hours Trading at our discretion unless all relevant orders and positions can be correctly handled.

3. Margin Requirement

Price updates received for Instruments available for and during Extended Hours Trading will impact the initial margin available but will not impact the maintenance margin available in your Account(s). However, your margin utilisation may still change during Extended Hours Trading due to trading activity in the Extended Hours Trading session, including trading in other Instruments or currency fluctuation. If your Margin Requirement is reached or breached during Extended Hours Trading, Saxo may not close any and all Contracts and Margin Positions for such Instruments until Regular Hours Trading but may close any other Instruments immediately that are in the regular trading session.

4. Account shield

Your Account shield will not be triggered by price updates received for Instruments available for and during Extended Hours Trading, and will only be triggered by price updates for such Instruments during Regular Hours Trading.

By participating in Extended Hours Trading, you expressly acknowledge and agree to the unique risks and rules of investing during Extended Hours Trading sessions. Saxo Markets may not be able to predict and describe all of the special trading risks that could arise in Extended Hours Trading. Therefore, you agree not to hold Saxo Markets responsible for any risks you undertake, whether described above or not, by participating in Extended Hours Trading sessions.

In the event of any inconsistency between this Risk Warning and Saxo Markets’ General Business Terms, the General Business Terms shall prevail.

Saxo Markets may notify you or make known on the Trading Platform of Instruments in respect of Extended Hours Trading to which we will not quote, the restrictions on the amount for which we will quote, or other conditions that may apply to our quote, but any such notification will not be binding on us.

You expressly acknowledge and agree that regardless of whether you engage in Extended Hours Trading, the price updates received for Instruments available for and during Extended Hours Trading will affect the initial margin available in your Account(s) and this may affect or reduce your ability to open new position(s) on any Instruments or withdraw funds. Further, you understand that Extended Hours Trading may not be appropriate for every investor and that you are solely responsible for implementing or adopting any investment decision or trading strategy.