Risk Disclosure Document for Capital Markets & Derivatives
Statutory risk warnings across Cash Equities, Futures & Options (F&O), Margin Trading, and Global Investments.
Mandatory SEBI Disclosure | BSE, NSE & CDSL Member
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Statutory Disclosures
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Risk Disclosures
Risk Factors
SEBI F&O Study & Caution
Capital Market Price Volatility
Futures & Options Leverage Risk
Margin Trade Funding (MTF) Risks
Electronic Trading & Execution Risks
Apex Global & Currency Fluctuation
Statutory Non-Endorsement Clause
1. Mandatory SEBI Advisory on Trading in Equity Futures & Options
- As per the SEBI F&O Study (2023), 9 out of 10 individual traders in the Equity F&O segment incurred net losses.
- Individuals making losses in the F&O segment incurred an average loss of reach ₹50,000.
- Over and above the net trading losses, loss-makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits expended 15% to 50% of such profits as transaction costs.
2. Market Volatility & Liquidity Risks
- Price Volatility: Stock prices can witness wide variations due to macroeconomic events, industry-specific news, or global sentiment.
- Liquidity Risk: In some cases, a buy or sell order may not be executed immediately due to the lack of counterparty interest in specific low-volume stocks.
3. Derivative Contracts & Leverage Multipliers
- Derivative trading is inherently leveraged; a small initial investment controls a much larger contract value.
- This leverage can magnify both profits and losses disproportionately.
- Market movements against your position may lead to a total loss of the initial margin and requires additional funds within short notice.
4. Risks of Borrowed Capital & Margin Funding
- Trading on margin (borrowed capital) implies you must maintain minimum levels of equity in your account.
- Failure to meet a 'Margin Call' will lead to a forced liquidation of your securities without prior consent.
- Interest costs on margin funding can erode net returns over time.
5. Technology, Latency & Internet Disruptions
Electronic trading depends on system stability and connectivity. Naman Securities provides multiple fallback channels, but the client acknowledges that outages, data latency, internet failure, or hardware malfunctions at the client's end or by service providers may lead to orders not being filled or delayed execution.
6. Cross-Border Investments & Currency Risk (Apex Global)
- Investing in international markets involves currency exchange risk. The value of your investment may fluctuate based on USD/INR rates.
- Global markets are subject to different regulatory standards and settlement cycles.
- Political and economic instability in foreign jurisdictions could impact the repatriable value of assets.
7. Regulatory Non-Endorsement Notice
Registration granted by SEBI, membership of BSE and NSE, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors. The contents of this document are intended to inform the client of potential risks and are not exhaustive.