OTC Leveraged Foreign Exchange Trading Experience Periods of Liquidity Risk. By signing the Service Provider Risk Disclosure Statement, the Customer acknowledges that Liquidity Risk, resulting from decreased liquidity of a currency pair, is usually due to unanticipated changes in economic and/or political conditions. Customer also acknowledges that Liquidity Risk can affect the general market in that all participants experience the same lack of buyers and/or sellers. When liquidity decreases, the Customer can expect, at the minimum, to have wider bid to ask spreads as the supply of available bid/ask prices, outstrips the demand. Decreases in liquidity can also result in "Fast Market" conditions where the price of a currency pair moves sharply higher or lower or in a volatile up/down pattern without trading in an ordinary step-like fashion. In some instances, there may exist the possibility that a trading bid and/or ask price for a foreign exchange pair or pairs are not available (a situation where there is no liquidity). Although there may be instances when the aggregate OTC Rolling Spot Forex market enters a "Fast Market" situation or periods where liquidity is in short or no supply, it is important to note that, the Platform’s prices, bid/ask spreads and liquidity will reflect the prevailing interbank market liquidity. Customer’s who do not have adequate margin will have their Accounts liquidated: Because of the leverage available with OTC Leveraged Foreign Exchange Trading and the potential for extreme volatility, Service Provider reserves the sole discretionary right to liquidate Customer’s Account(s) should the margin in the Account not be sufficient to cover the potential risk of loss.
Appears in 4 contracts
Samples: Client Agreement, Billion Ally, System Advance
