Future Contracts. 22.2.1 Trading in future contracts entails entering into an agreement to receive or deliver an instrument at a future date. In some cases, however, positions are settled in cash. Such Transactions in futures carry a high degree of risk. The small amount of initial margin relative to the value of the futures contract means that a small up-front investment can lead to large losses or profits. In most cases, the amount of initial margin is small relative to the value of the futures contract so that Transactions are highly ‘leveraged’. A relatively small market movement shall have a proportionately larger impact on the funds the Client has deposited or shall have to deposit. This may work against the Client as well as for the Client. The Client may sustain a total loss of initial margin funds and any additional funds deposited with the Company to maintain its position. 22.2.2 If the market moves against the Client’s position or margin levels are increased, the Client may be requested to pay substantial additional funds on short notice to maintain its position. If the Client fails to comply with a request for additional funds within the time prescribed, its position may be liquidated at a loss and it shall be liable for any resulting deficit. Future contracts may involve potential obligations. The Client must be aware of the ensuing consequences. 22.3
