Notice
Thank you for visiting the ZenvoraFX website at https://zenvorafx.com/.
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Risk Disclosure
1. Introduction
ZenvoraFX Ltd (hereinafter called "We", or the "Company") is authorised by Mwali International Services Authority in Comoros Union with license number T2023293 with registered office at Bonovo Road – Fomboni Island of Mohéli – Comoros Union.
This Notice contains information about Contracts for Difference (CFDs) or any other financial derivative product including some of the risks associated with trading with those Financial Instruments and should be read together with the Terms of Business. It is not intended to mention or explain all risks and other important aspects involved in dealing with Forex, CFDs or any other financial derivative product nor does it disclose all risks, and it does not replace your own understanding and experience of the above-mentioned products. It explains, in general terms, the nature of the risks associated with trading in Forex, CFDs or any other financial derivative product in order to assist you in understanding the nature and risks of this specific type of Financial Instrument being offered and, consequently, to be in a position to take investment decisions on an informed basis.
However, we would like to warn you that this notice does not disclose all of the risks and other significant aspects of trading in Forex, CFDs or any other financial derivative product. In light of the risks, you should undertake such transactions only if you understand the nature of the financial instruments into which you are entering and the extent of your exposure to risk. Trading in high risk financial instruments like Forex, CFDs or any other financial derivative product may not be suitable for everyone and you should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. If you are in any doubt as to the suitability of any investment you should seek independent professional expert advice.
Please note that the value of your investments may rise or fall depending on market conditions and that you may not always recoup your initial investment. In addition, past performance should not be seen as an indication of future performance.
Trading leveraged products such as FX and CFDs may not be suitable for all investors as they carry a high degree of risk to your capital. Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience before trading, and if necessary, seek independent advice.
2. Description of Contract for Difference (CFD)
A CFD is an agreement to exchange the difference between the opening and closing value of a contract at its close. Rather than buying or selling the underlying instrument on which your contract is based, you simply place a trade with a CFD provider. The price of your CFD will then replicate the price of the underlying asset (without actually owning the underlying product) giving you a profit (or a loss) as the price of the underlying moves, so that the amount of any profit or loss made on a CFD will be equal to the difference between the price of the underlying instrument when the CFD is opened and the price of the underlying instrument when the CFD is closed, multiplied by the number of underlying instruments to which the CFD relates.
The types of CFD include, but are not limited to Foreign Exchange CFDs, Futures CFDs, Option CFDs, Share CFDs, Commodities CFDs, Cryptocurrencies CFDs and Stock Index CFDs.
CFDs are a way of trading on the upward or downward price movements of traditional financial markets without buying or selling the underlying asset directly. The potential losses associated with the price movements can exceed the total value of the initial margin (and any additional margin funds) the Client has deposited with the Company, and the Client may be obliged to close his positions at the worst possible time.
When trading CFDs, the Client will be charged an interest rate which mirrors the financing rate of actually borrowing the funds to invest.
This means that if the Client purchases a CFD, the Client will be required to pay financing costs (SWAP) for the period during which the Client holds the position. However, the Client will not pay any financing costs if he opens and closes a CFD position on the same day. This means that if the Client holds a long position for a certain period of time, the financing costs might become substantial. As a seller of CFDs, the Client will not receive any interest. Details of financing fees applied are available on the Company's website and/or provided to the client during the account opening process.
a. Example of trading in CFDs
To open a CFD position, you need to deposit only a fraction of the full value of your trade, if you wish to purchase 150,000 units of EURUSD at price 1.16650 with margin requirement 3.33% (which is equal to 1:30 leverage) for that instrument. This requires you to place a margin of: 150,000 units / leverage (30) = EUR 5,000 (Base Currency of traded pair - EURUSD).
It should be noted that the Company shall monitor the leverage applied to Client's positions, at all times. The Company reserves the right to decrease the leverage depending on the Client's trade volume.
b. How CFDs Differ from Underlying Securities
Shares of common stock represent a fractional ownership interest in the issuer of that security. Ownership of securities confers various rights that are not present with positions in CFDs. For example, persons owning a share of common stock may be entitled to vote in matters affecting various corporate actions. They also may be entitled to receive dividends and corporate disclosure, such as annual and quarterly reports.
The purchaser of a CFD, by contrast, has only a contract for future settlement. The purchaser of the CFD is not entitled to exercise any voting rights over the underlying security and is not entitled to any dividends that may be paid by the issuer.
Moreover, the purchaser of a CFD does not receive the corporate disclosures that are received by shareholders of the underlying security.
Owning the underlying security does not require an investor to meet any margin requirements in contrast with CFDs leveraged trading.
3. Risks & Warnings associated with transactions in Forex, CFDs or any other derivative product
▪ Forex, CFDs or any other financial derivative product are highly speculative and are suitable only for those Customers who (a) understand and are willing to assume the economic, legal and other risks involved, and (b) are financially able to assume losses significantly in excess of margin or deposits.
▪ The Client should unreservedly acknowledge and accept that, regardless of any information which may be offered by the Company, the value of Forex, CFDs or any other financial derivative product may fluctuate downwards or upwards and it is even probable that the investment may become of no value. As with any high-risk financial product, you should not risk any funds that you cannot afford to lose, such as your retirement savings, medical and other emergency funds, funds set aside for purposes such as education or home ownership, proceeds from student loans or mortgages, or funds required to meet your living expenses.
▪ The Client should unreservedly acknowledge and accept that he runs a great risk of incurring losses and damages as a result of the dealing in Forex, CFDs or any other financial derivative product and accepts and declares that he is willing to undertake this risk.
▪ The Client should take the risk that his trades in Forex, CFDs or any other financial derivative product may be or become subject to tax and/or any other duty for example because of changes in legislation or his personal circumstances. The Company does not warrant that no tax and/or any other stamp duty will be payable. The Client should be responsible for any taxes and/or any other duty which may accrue in respect of his trades.
▪ The high degree of "gearing" or "leverage" is a particular feature of Forex, CFDs or any other financial derivative product meaning a relatively small movement in the underlying market can have a disproportionately effect on the Client's trade.
▪ If the market moves against the client's position, the client may be called upon to deposit substantial additional margin (funds), at short notice, to maintain his position. If the client fails to comply with a request for additional funds within the time prescribed, his position may be closed at a loss and he will be liable for any resulting deficit. You will be deemed to have received a notice requiring the payment of such funds, even if you are not at home or do not receive the messages we leave for you, if the notices are delivered to your nominated contact points.
▪ A loss (which may or may not result in a margin call) may require the Client to immediately provide additional funds to the Company to maintain the open positions. The Company may also change its rates of initial margin and/or notional trading requirements at any time, which may result in a change to the margin the Client is required to maintain.
▪ When trading Forex, CFDs or any other financial derivative product the Client will be charged an interest rate which mirrors the financing rate of actually borrowing the funds to invest. This means that if the Client purchases a Forex, CFDs or any other financial derivative product, the Client will be required to pay financing costs (SWAP) for the period during which the Client holds the position. However, the Client will not pay any financing costs if he opens and closes Forex, CFDs or any other financial derivative product position on the same day. This means that if the Client holds a long position for a certain period of time, the financing costs might become substantial. As a seller of Forex, CFDs or any other financial derivative product, the Client will not receive any interest. Details of financing fees applied are available on the Company's website and/or provided to the client during the account opening process.
4. Communication Risks
▪ The Company bears no responsibility for any loss that arises as a result of delayed or unreceived communication sent to the Client by the Company.
▪ The Company bears no responsibility for any loss that arises as a result of unencrypted information sent to the Client by the Company that has been accessed via unauthorized means.
▪ The Company bears no responsibility for any unreceived or unread internal message sent to the Client through the trading platform(s). In case a message is not received or read within seven (7) calendar days the message gets automatically deleted.
▪ The Client is solely responsible for the privacy of any information contained within the communication received by the Company.
▪ The Client accepts that any loss that arises as a result of unauthorized access of a third party to the client's trading account is not the responsibility of the Company.
▪ Telephone conversations may be recorded, and you will accept such recordings as conclusive and binding evidence of the instructions.
5. General Investment Risks
The classification of risks is based on general as well as on product-specific risks. We mentioned above the product-specific risks for Forex, CFDs or any other financial derivative product. The general risks of trading derivative products should also be taken into account.
6. General Notice
This notice cannot and does not disclose or explain all of the risks and other significant aspects involved in dealing in Financial Instruments and was designed to explain in general terms the nature of the risks particular to dealing in the Financial Instruments provided by the Company and to help the Customer to take investment decisions on an informed basis.
In the Media
