Effective Date: 3.10.2024
Risk Disclosure Statement for Volity Prop L.L.C-FZ
This Risk Disclosure Statement is provided by Volity Prop L.L.C-FZ (the “Company”) to inform you (“Trader”) of the risks associated with proprietary trading. By participating in the proprietary trading activities of Volity Prop L.L.C-FZ, you acknowledge and accept the inherent risks, and agree that you have read and understood this disclosure.1. General Trading Risks
Trading financial instruments, including but not limited to, equities, options, futures, currencies, and other derivatives, involves substantial risk and is not suitable for all investors. The high level of leverage available in some instruments can work against you as well as for you, magnifying both potential profits and potential losses. As a Trader, you may lose the entirety of the trading capital allocated to you by Volity Prop L.L.C-FZ. Key Risks Include:- Market Risk: The value of financial instruments can fluctuate due to changes in market conditions, economic events, political developments, and other external factors, which may result in significant losses.
- Leverage Risk: The use of leverage can amplify both gains and losses. Small market movements may have a significant impact on your trading account, and the use of leverage can lead to the rapid depletion of the allocated capital.
- Liquidity Risk: Markets may experience low liquidity, making it difficult to execute trades at the desired price. Liquidity shortages can increase volatility and the risk of significant losses.
- Volatility Risk: Certain markets or instruments may be more volatile than others, leading to rapid and unexpected price changes, which can negatively affect your trading positions.
2. No Guarantee of Profit
While Volity Prop L.L.C-FZ provides access to proprietary trading capital, there is no guarantee that you will achieve profits. Trading performance depends on a variety of factors, including market conditions, your skills, and risk management practices. Past performance is not indicative of future results. As a Trader, you must understand and accept the possibility of significant losses, including the potential loss of all allocated capital.3. Risk of Losses
Volity Prop L.L.C-FZ is responsible for covering losses incurred up to the amount of capital allocated to your trading account. However, excessive or frequent losses may result in account suspension or termination, at the discretion of Volity Prop L.L.C-FZ.- Loss Limits: You are required to adhere to the risk management guidelines and loss limits imposed by the Company. Failure to comply with these limits may lead to the termination of your trading privileges.
- No Liability for Personal Funds: You are not personally liable for losses beyond the capital allocated by Volity Prop L.L.C-FZ. However, any personal capital invested into your trading activity outside of the Company’s allocation may be at risk, and the Company is not responsible for the loss of personal funds.
4. Systemic and Operational Risks
- Technical Risks: Trading through electronic platforms and systems involves risks related to hardware and software failures, network interruptions, system downtime, and data breaches. Volity Prop L.L.C-FZ makes reasonable efforts to maintain operational stability, but there is no guarantee that these risks will be fully mitigated.
- Execution Risks: Delays in order execution, slippage, or discrepancies between the expected and actual trade execution prices can occur. These issues can result in trading losses and reduced profitability.
- Third-Party Risk: Volity Prop L.L.C-FZ uses third-party service providers, including brokers, data providers, and technology vendors. Any failures or disruptions in these third-party services may impact your ability to trade.
5. Regulatory and Legal Risks
- Regulatory Changes: The financial markets are subject to regulatory changes that may impact your ability to trade, the instruments you can trade, or the trading conditions. New regulations may also impose additional reporting requirements, transaction costs, or restrictions on trading activities.
- Legal Compliance: Traders are responsible for ensuring compliance with all applicable laws and regulations governing their trading activities. Engaging in illegal or prohibited activities, such as market manipulation or insider trading, may result in severe penalties, including account termination and legal action.
6. Trader Responsibilities
As a Trader with Volity Prop L.L.C-FZ, you are responsible for:- Understanding the risks associated with trading financial instruments.
- Implementing effective risk management strategies to mitigate potential losses.
- Monitoring market conditions and making informed trading decisions based on your analysis.
- Ensuring that your trading activities comply with the risk management and loss limits set by Volity Prop L.L.C-FZ.
7. Risk Management
Volity Prop L.L.C-FZ provides risk management guidelines, including maximum drawdowns and loss limits. However, it is your responsibility to employ sound risk management strategies in your trading activities. Risk management techniques, including the use of stop-loss orders and position sizing, can help limit losses but cannot eliminate all risks.8. No Investment Advice
Volity Prop L.L.C-FZ does not provide investment, legal, or tax advice. All trading decisions are made independently by you. You should consult with an independent financial advisor, tax professional, or legal advisor before engaging in trading activities, particularly if you are uncertain about the risks involved.9. Acknowledgment of Risks
By participating in Volity Prop L.L.C-FZ’s proprietary trading program, you acknowledge and agree to the following:- You fully understand the risks associated with trading financial instruments.
- You are solely responsible for your trading decisions and the consequences of those decisions.
- You accept the potential for substantial financial losses, including the loss of all allocated trading capital.
- You have the necessary knowledge, experience, and resources to engage in trading activities and manage associated risks.