Leverage & Risk
A Contract-for-Difference (CFD) is a financial derivative product that allows an investor to obtain economic exposure (for speculative, investment or hedging purposes) to an underlying asset, such as a currency, an index or commodity, without acquiring ownership of the underlying asset.
Trading in over-the-counter (OTC) derivatives, including leveraged Foreign Exchange Contracts (FX) and Contracts-for-Difference (CFDs), is highly speculative and not appropriate for risk-averse investors or those seeking security of capital. An account opened with Questrade Inc. allows you to trade currencies on a highly leveraged basis. A small adverse price change to the underlying asset can magnify the impact on the funds in your account, potentially resulting in the total loss of your initial investment and any additional funds that you may deposit to meet margin calls.
Given the risk of losing your entire investment, speculating in the over-the-counter (OTC) derivatives market should only be conducted with risk capital that if lost will not have a substantial impact on your financial well-being. Before making a decision to trade FX & CFDs, you should carefully consider all of the disclosures in the account application and, in particular, you should evaluate the risk factors listed in the Risk Information Document for Derivatives provided to you upon account opening.
Should you decide to proceed with your investment, you acknowledge that you will be trading only with risk capital or funds that you can afford to lose, and that the loss of such funds will neither jeopardize your present life-style nor future retirement. FX & CFD trading may not be suitable for all customers, therefore ensure you fully understand the risks involved and seek independent financial advice if necessary.
There are risks associated with using an Internet-based trading system. These include the failure of hardware, software and Internet connection. Questrade does not control signal power, reception or routing on the Internet, configuration of your equipment or reliability of its connection. We cannot, therefore, be responsible for communication failures, distortions or delays when trading via the Internet. Questrade Inc. employs back-up systems and contingency plans to minimize the possibility of system failure.
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