Margined Currency and CFD Trading is one of the riskiest forms of investment available in the financial markets and is only suitable for sophisticated individuals and institutions. An account with IBFX permits you to trade foreign currencies and CFDs on a highly leveraged basis (leverage up to 400:1 available). In a standard account or mini account, 0.25% of the notional value of the contract is required to enter into a position. The notional value is defined as 100,000 of the base currency.
The funds in an account trading at maximum leverage can be completely lost if the position(s) held in the account has 0.25% swing in value. Theoretically, an account could lose more than the equity it contains, if the account is trading at maximum leverage and positions held in the account swing more than one percent in value. Given the possibility of losing one's entire investment, speculation in the off-exchange retail foreign currency and CFD market should only be conducted with risk capital funds that if lost will not significantly affect one's personal or institution's financial well beings.
Any opinions expressed by representatives of IBFX as to the future direction of prices of specific currencies or CFDs are purely opinions, do not necessarily represent the opinion of IBFX, and are not guaranteed in any way. In no event shall IBFX have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided verbally or via the Internet, or any delays, inaccuracies, errors in, or omissions of information.
In addition, there are risks associated with utilizing an Internet-based deal execution trading system including, but not limited to, the failure of hardware, software, and Internet connection. Since IBFX does not control signal power, its reception or routing via Internet, configuration of your equipment or reliability of its connection, we cannot be responsible for communication failures, distortions or delays when trading via the Internet. IBFX employs back up systems and contingency plans to minimize the possibility of system failure, and trading via telephone is always available.
The leveraged nature of FX and CFD trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin call within the time prescribed, your position will be liquidated and you will be responsible for any resulting losses.
As with all major economic releases there could be significant price volatility with this announcement. Currency and CFD spreads will typically widen just before the release and will remain wide for a few minutes after. If the announcement is a shock to the consensus estimate, the price of the currency pair could gap significantly. For example, the price on the EURUSD trading at 1.2820 - 1.2822 just before release could gap up 60 pips to 1.2880 - 1.2882, without any available prices available between the price of 1.2820 and 1.2882. A Buy Stop placed before the announcement at 1.2830 would turn into a Market Order and would be filled at the prevailing price 1.2882. The same would be true with a Sell Stop.
During news, plan on the spreads widening and if you are trading with a Buy or a Sell Stop entry order, do not anticipate being filled at your entry price. You will be filled at the prevailing market price after the release, and this market price could be significantly different from your desired price of your entry order.
IBFX client funds are in segregated accounts, in accordance with Australian Securities and Investments Commission (ASIC). However, you should be aware that client funds are not separated from each other, co-mingled into one account. Client money provisions of the Corporations Act may not insulate any individual client's funds from a default in our client trust account, which may arise from any client's trading. Assets in the client trust account belonging to non-defaulting clients are potentially at risk, even though they did not cause the default.
*Forex trading is one of the riskiest forms of investment available and may not be suitable for all traders.
IBFX Australia Pty. Ltd. is part of the Monex Group and is authorised and regulated by the Australian Securities and Investments Commission, firm registration number 363972, ACN 142 210 179.