Trading Risk Disclosure Statement
You should consider the following points before engaging
in a day trading strategy. For purposes of this notice, a
"day trading strategy" means an overall trading
strategy characterized by the regular transmission by a customer
of intra-day orders to effect both purchase and sale transactions
in the same security or securities.
Day trading can be extremely risky.
Day trading generally is not appropriate for someone of limited
resources and limited investment or trading experience and
low risk tolerance. You should be prepared to lose all of
the funds that you use for day trading. In particular, you
should not fund day-trading activities with retirement savings,
student loans, second mortgages, emergency funds, funds set
aside for purposes such as education or home ownership, or
funds required to meet your living expenses. Further, certain
evidence indicates that an investment of less than $50,000
will significantly impair the ability of a day trader to make
a profit. Of course, an investment of $50,000 or more will
in no way guarantee success.
Day trading requires knowledge of securities markets.
Day trading requires in-depth knowledge of the securities
markets and trading techniques and strategies. In attempting
to profit through day trading, you must compete with professional,
licensed traders employed by securities firms. You should
have appropriate experience before engaging in day trading.
Day trading requires knowledge of a firm's operations.
You should be familiar with a securities firm's business practices,
including the operation of the firm's order execution systems
and procedures. Under certain market conditions, you may find
it difficult or impossible to liquidate a position quickly
at a reasonable price. This can occur, for example, when the
market for a stock suddenly drops, or if trading is halted
due to recent news events or unusual trading activity. The
more volatile a stock is, the greater the likelihood that
problems may be encountered in executing a transaction. In
addition to normal market risks, you may experience losses
due to system failures.
Day trading on margin or short selling may result in losses
beyond your initial investment.
When you day trade with funds borrowed from a firm or someone
else, you can lose more than the funds you originally placed
at risk. A decline in the value of the securities that are
purchased may require you to provide additional funds to the
firm to avoid the forced sale of those securities or other
securities in your account. Short selling as part of your
day trading strategy also may lead to extraordinary losses,
because you may have to purchase a stock at a very high price
in order to cover a short position.