Both the Foreign Exchange and the Contracts for Difference provided by MIEX are products of margin trading.
Therefore, compared with other investment methods, the above financial products of margin trading are exposed
to a relatively higher level of investment risk, and may eventually result in a financial loss that is larger
than your initial deposit.
Margin trading mainly refers to the type of trades that is carried out through the price movement of financial
products. This type of trades is settled by the difference between the opening price and the closing price of
the financial product involved in the trade.
Unless you are completely familiar with all the potential risks related to margin trading and possess of a
sufficient amount of resources for investment, you should not participate in any form of margin trading. The
main reason behind is that the financial market may not fluctuate according to your expectation or prediction,
and in case of an adverse movement in the financial market, you will be responsible for bearing all the
financial losses associated with both the payments of margin and the margin trading itself.
Margin trading belongs to leveraged trading, which means that an investor can place a larger trade by using
only a small amount of money as the initial margin. In this case, if the price movement of the financial
product is in favor of your current position, your profits will be greatly increased by the leverage effect;
meanwhile,if the price movement of the financial product is in against of your current position, your loss
will also be largely multiplied by the leverage effect and you may be required to make immediate deposit of
additional margin in your investment account in MIEX, in order to keep these positions opened. Furthermore,
you are responsible for any financial losses associated with the close of your positions. To shortly
summarize, the potential profits and losses of margin trading are both unlimited; therefore, it is highly
recommended that all investors are required to have careful considerations before making any investment
decision of margin trading.
It is not the case that all the financial products can be traded 24 hours per day. More specifically, a number
of financial products consist of restriction on their opening times and closing times, and some of them are
subjected to unexpected fluctuations. Therefore, although we have been working hard at consistently updating
the information displayed in our Reference Materials, the MIEX is not subjected to any obligation or liability
associated with the accuracy of the information provided. For example, the trading time may be affected by the
national holidays and the changes in Daylight Saving Time (DST). A particular financial market may be closed
due to multiple reasons, and you will not be able to trade during the period of time.
You are placing trades on prices provided by MIEX instead of the prices listed in the stock exchanges. The
prices provided by MIEX are usually based on, but not completely determined by the prices listed in the stock
exchanges, and there may be some differences between the fluctuations of the exchange price and the underlying
price. Furthermore, all the opened positions can only be closed and settled with MIEX.
MIEX provides independent capital accounts for our retail clients. When the clients are using their funds to
open positions, MIEX reserves the right to utilize some or all of those funds in other investment projects.
There is not a complete protection of funds, even in the segregated capital accounts.
If you are in doubt of any aspect of Foreign Exchange and Contracts for Difference, it is highly recommended
that you should seek independent professional advisory services and helps, before the completion of trades.
If you are considering trading shares of the company that you are currently working for, you should seek
professional legal advices before the competition of trades, in order to ascertain that you are not in breach
of any regulations.
Margin trading is not necessarily designed to replace the existing or traditional investing methods, and
therefore may not be suitable for all the investors.