Common use of INVOLVED IN TRADING DERIVATIVE Clause in Contracts

INVOLVED IN TRADING DERIVATIVE. Derivative warrant trading involves high risks and is not suitable for every investor. Investors should understand and consider the following risks before trading in derivate warrants. Issuer Risk Derivative warrant holders are unsecured creditors of an issuer and have no preferential claim to any assets an issuer may hold. Therefore, investors are exposed to credit risk in respect of the issuer. Gearing Risk Although derivative warrants may cost a fraction of the price of the underlying assets, a derivative warrant may change in va xxx more or less rapidly than the underlying asset. In the worst case the value of the derivative warrants falls to zero and holders lose their entire purchase price. Limited Life Unlike stocks, derivative warrants have an expiry date and therefore a limited life. Unless the derivative warrants are in -the- money, they become worthless at expiration. Time Decay One should be aware that other factors being equal the value of derivative warrants will decrease over time. Therefore, derivative warrants should never be viewed as products that are bought and held as long term investments.

INVOLVED IN TRADING DERIVATIVE. Derivative warrant trading involves high risks and is not suitable for every investor. Investors should understand and consider the following risks before trading in derivate warrants. Issuer Risk Derivative warrant holders are unsecured creditors of an issuer and have no preferential claim to any assets an issuer may hold. Therefore, investors are exposed to credit risk in respect of the issuer. Gearing Risk Although derivative warrants may cost a fraction of the price of the underlying assets, a derivative warrant may change in va xxx more or less rapidly than the underlying asset. In the worst case the value of the derivative warrants falls to zero and holders lose their entire purchase price. Limited Life Unlike stocks, derivative warrants have an expiry date and therefore a limited life. Unless the derivative warrants are in -the- -the-money, they become worthless at expiration. Time Decay One should be aware that other factors being equal the value of derivative warrants will decrease over time. Therefore, derivative warrants should never be viewed as products that are bought and held as long term investments.