Coverdeal Holdings Limited (hereinafter referred to as the Company) is an Investment Firm regulated by the Cyprus Securities and Exchange Commission with license no. CIF 231/14.This notice is provided to you in accordance with Markets in Financial Instruments Directive (MiFID) of the European Union and the Investment Services and Activities and Regulated Markets Law of 2017 of Cyprus (Law 87(I)/2017).
The Client should not engage in any investment directly or indirectly in Financial Instruments unless he/she knows and understands the risks involved for each one of the Financial Instruments. So, prior to applying for an account the Client should consider carefully whether investing in a specific Financial Instrument is suitable for him/her in the light of his/her circumstances and financial resources.
3.1. The Company does not and cannot guarantee the initial capital of the Client’s portfolio or its value at any time or any money invested in any financial instrument.
3.2. The Client should acknowledge that, regardless of any information which may be offered by the Company, the value of any investment in Financial Instruments may fluctuate downwards or upwards and it is even probable that the investment may become of no value.
3.3. The Client should acknowledge that he/she runs a great risk of incurring losses and damages as a result of the purchase and/or sale of any Financial Instrument and accepts that he/she is willing to undertake this risk.
3.4. Information of the previous performance of a Financial Instrument does not guarantee its current and/or future performance. The use of historical data does not constitute a binding or safe forecast as to the corresponding future performance of the Financial Instruments to which the said information refers.
3.5. The Client is hereby advised that the transactions undertaken through the dealing services of the Company may be of a speculative nature. Large losses may occur in a short period of time, equaling the total of funds deposited with the Company.
3.6. Some Financial Instruments may not become immediately liquid as a result e.g. of reduced demand and the Client may not be in a position to sell them or easily obtain information on the value of these Financial Instruments or the extent of the associated risks.
3.7. When a Financial Instrument is traded in a currency other than the currency of the Client’s country of residence, any changes in the exchange rates may have a negative effect on its value, price and performance.
3.8. A Financial Instrument on foreign markets may entail risks different to the usual risks of the markets in the Client’s country of residence. In some cases, these risks may be greater. The prospect of profit or loss from transactions on foreign markets is also affected by exchange rate fluctuations.
3.9. A Derivative Financial Instrument (i.e. option, future, forward, swap, contract for difference) may be a non delivery spot transaction giving an opportunity to make profit on changes in currency rates, commodity, stock market indices or share prices called the underlying instrument.
3.10. The value of the Derivative Financial Instrument may be directly affected by the price of the security or any other underlying asset which is the object of the acquisition.
3.11. The Client must not purchase a Derivative Financial Instrument unless he/she is willing to undertake the risks of loosing entirely all the money which he/she has invested and also any additional commissions and other expenses incurred.
3.12. Under certain market conditions it may be difficult or impossible to execute an order.
3.13. Placing Stop Loss Orders serves to limit your losses. However, under certain market conditions the execution of a Stop Loss Order may be worse than its stipulated price and the realized losses can be larger than expected.
3.14. Should the margin capital be insufficient to hold current positions open, you may be called upon to deposit additional funds at short notice or reduce exposure. Failure to do so in the time required may result in the liquidation of positions at a loss and you will be liable for any resulting deficit.
3.15. A Bank or Broker through whom the Company deals or the Company itself may act in the same market as you, its own account involvement could be contrary to your interests.
3.16. The insolvency of the Company or of a Bank or Broker used by the Company to effect its transactions may lead to your positions being closed out against your wishes.
3.17. The Client’s attention is expressly drawn to currencies traded so irregularly or infrequently that it cannot be certain that a price will be quoted at all times or that it may be difficult to effect transactions at a price which may be quoted owing to the absence of a counter party.
3.18. Trading on-line, no matter how convenient or efficient, does not necessarily reduce risks associated with currency trading.
3.19. There may be situations, movements and/or conditions occurring at weekend, in the beginning of week or intra-day after release of significant macroeconomic figures, economic or political news that make currency markets to open with price levels that may substantially differ from previous prices. In this case, there exists a significant risk that orders issued to protect open positions and/or open new positions may be executed at prices significantly different from those designated.
3.20. CFD trading is undertaken on electronic platforms. There may be times that system or other breakdowns arise. This may affect your ability to trade, or our ability to offer continuous prices or create a need for subsequent adjustment of prices to reflect underlying exchange prices.
3.21. There is a risk that the Client’s trades in Financial Instruments may be or become subject to tax and/or any other duty for example because of changes in legislation or his/her 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/her trades.
3.22. Before the Client begins to trade, he/she should obtain details of all commissions and other charges for which the Client will be liable. If any charges are not expressed in money terms (but for example as a dealing spread), the Client should ask for a written explanation, including appropriate examples, to establish what such charges are likely to mean in specific money terms.
3.23. Investing in some Financial Instruments entails the use of “gearing” or “leverage”. In considering whether to engage in this form of investment, the Client should be aware that the higher degree of leverage that is obtainable in Spot Foreign Exchange Trading can work against him/her as well as for him/her. The use of leverage can lead to large losses as well as gains. So, the Client should unreservedly acknowledge and accept that he/she runs a greater risk of incurring losses and damages as a result of the dealing in some Financial Instruments and accepts and declares that he/she is willing to undertake this risk.
3.24. Transactions may not be undertaken on a recognised or designated investment exchange and, accordingly, they may expose the Client to greater risks than exchange transactions. The terms and conditions and trading rules may be established solely by the counterparty. The Client may only be able to close an open position of any given contract during the opening hours of the exchange. The Client may also have to close any position with the same counterparty with whom it was originally entered into. In regard to transactions in CFD’s with the Company, the Company is using a Trading Platform for transactions in CFD’s which does not fall into the definition of a recognised exchange as this is not a Multilateral Trading Facility because the Company may be a client in transaction.
3.25. The Company does not provide the Client with investment advice relating to investments or possible transactions in investments or make investment recommendations of any kind.
3.26. The Company is required to hold the Client’s money in an account that is segregated from other clients and the Company’s money in accordance with current regulations, but this may not afford complete protection. This notice cannot and does not disclose or explain all of the risks and other significant aspects involved in dealing in all Financial Instrument and investment services.
Please refer to the below additional information specific for Contract for Differences:
This notice is provided to you in accordance with Markets in Financial Instruments Directive (MiFID II) of the European Union and the Investment Services and Activities and Regulated Markets Law 2017 of Cyprus (Law 87 (Ι)/2017, because you are considering dealing with Company in the underlying financial instrument of Contract for Differences (CFDs).
This notice cannot and does not disclose or explain all of the risks and other significant aspects involved in dealing in CFDs. The notice was designed to explain in general terms the nature of the risks involved when dealing in CFDs and to help you take investment decisions on an informed basis.
The Client should consider carefully whether trading in the financial instruments of CFDs is suitable for him/her in the light of his/her circumstances and financial resources. In considering whether to engage in this form of trading, the Client should be aware of the following:
It is emphasized that for many members of the public dealings in CFDs will not be suitable. The Client should not engage in any dealings directly or indirectly in CFDs unless he/she knows and understands the features risks involved in them.
4.1. The Client should unreservedly acknowledge and accept that, regardless of any information which may be offered by Company, the value of CFDs shall fluctuate downwards or upwards and it is even probable that the investment may become of no value.
4.2. The high degree of “gearing” or “leverage” is a particular feature of CFDs. This stems from the margining system applicable to such trades, which generally involves a comparatively modest deposit or margin in terms of the overall contract value, so that a relatively small movement in the underlying market can have a disproportionately dramatic effect on the Client’s trade. If the underlying market movement is in the Client’s favor, the client may achieve a good profit, but an equally small adverse market movement can not only quickly result in the loss of the Clients’ entire deposit, but may also expose the Client to a large additional loss. The CFDs available for trading with Company are non-deliverable spot transactions giving an opportunity to make profit on changes in currency rates, commodity, stock market indices or share prices called the underlying instrument. If the underlying instrument movement is in the Client’s favor, the Client may achieve a good profit, but an equally small adverse market movement can not only quickly result in the loss of the Clients’ entire deposit but also any additional commission and other expenses incurred. So, the Client must not enter into CFDs unless he/she is willing to undertake the risks of losing all the money which he/she has invested and also any additional commission and other expenses incurred.
4.3. Securities/Markets can be highly volatile. The prices of CFDs may fluctuate rapidly and over wide ranges and may reflect unforeseeable events or changes in conditions, none of which can be controlled by the Client or Company. Under certain market conditions it can be impossible to execute any type of Clients order at declared price.
4.4. The prices of CFDs will be influenced by, amongst other things, changing supply and demand relationships, governmental, agricultural, commercial and trade programs and policies, national and international political and economic events and the prevailing psychological characteristics of the relevant market place. Therefore Stop Loss order can not guarantee the limit of loss.
4.5. Clients are required to deposit funds in their trading account in order to open a position. The Margin requirement will depend on the underlying instrument of the CFDs. Margin requirements can be fixed or can be calculated from the current price of the underlying instrument. Company will not notify the Client of any Margin Call to sustain a loss making position.
4.6. Some of the CFD instruments may not become immediately liquid as a result of reduced demand for the underlying instrument and Client may not be able to obtain the information on the value of these Financial instruments or the extent of the associated risks.
4.7. Information of the previous performance of the CFD does not guarantee its current and/or future performance as well as a performance of the underlying instrument. Use of historical data does not constitute safe forecast as to the corresponding future performance of the CFD and underlying instrument to which that information refers.
4.8. The Company is required to apply a margin close out rule on a per account basis rather than a per position basis. The Company will close one or more of a client’s open CFD positions when the sum of funds in the CFD trading account and the unrealized net profits of all open CFDs connected to that account falls to less than 50% of the total initial margin protection for all those open CFDs.
4.9. We operate a Negative Balance Protection i.e. you cannot lose more than the Equity of your trading account, however you risk losing the capital invested with us.
4.10. Transactions in CFDs are not undertaken on a recognised exchange. Rather they are undertaken via Company’ Trading Platform whereby execution is effected by Company or other financial institutions and, accordingly, CFDs may expose the Client to greater risks than regulated exchange transactions. The terms and conditions and trading rules are established solely by the counterparty which may be Company or some other financial institution to be disclosed to the Client.
A cryptocurrency is a virtual currency that is not issued or backed by a central bank or government. They have experienced significant price volatility in the past which, in combination with leverage, places you at risk of suffering significant losses and potentially losing all your invested funds.
Cryptocurrency CFDs are complex financial instruments and are traded Over the Counter (‘OTC’). You can only exit a position by trading with us, during the trading hours of the underlying instrument. You cannot transfer your open positions/trades to any other Company.
CFDs are leveraged product which are complex, extremely high-risk and highly speculative investment. You should be aware of the risks involved and fully consider whether investing in cryptocurrency CFDs is appropriate for you.
What are the risks?
Price volatility: The value of cryptocurrencies, and therefore the value of CFDs linked to them, is extremely volatile. They are vulnerable to sharp changes in price due to unexpected events or changes in market sentiment and hence may result in significant loss over a short period of time,
Leverage: Leverage multiplies your losses and potential profits, and can have a significant impact on fees.
Price transparency: When compared with currencies, there can be more significant variations in the pricing of cryptocurrencies used to determine the value of your CFD position. There is a greater risk you will not receive a fair and accurate price for the underlying cryptocurrency when trading.
Cryptocurrency CFDs are not appropriate for all investors. You should only invest if you are an experienced investor with sophisticated knowledge of financial markets and you fully understand the risks associated with CFDs and cryptocurrencies. You must be fully aware of, and understand, the specific characteristics and risks in relation to these products.
The CFDs on Cryptocurrencies will be traded as all of the other financial instruments offered on the Company’s trading platform. Taking into consideration that you do not owe the underlying asset. Through your trade with us, you receive by us exposure to the performance of the underlying asset, but you do not receive any ownership or other rights to such underlying asset.
Sensitiveness and risks related with the hacking and other malware activities on Cryptocurrencies, do not apply in the offering of CFDs on Cryptocurrencies by the Company since the price value of the virtual currencies is correlated with the value of the relevant CFD instead of the actual cash delivery of the virtual currency.
The offering investment services in relation to CFDs on Cryptocurrencies will be provided to Retail and Professional Clients, classified as such in accordance with the Company’s Client Categorisation Policy. In accordance with the results of the assessment of appropriateness that is undertaken by each potential client, adequate risk warnings will be disseminated regarding the risks involved in the trading of complex products, including CFDs on Cryptocurrencies. Additional risk warnings will be disseminated to clients regarding the lack of regulation over virtual currencies, instability and volatility of the price as well as that sharp movements in their price may occur.
For the purposes of mitigating the risks associated to the sudden movements in the price fluctuations of virtual currencies, the leverage available to clients interested in trading of CFDs on virtual currencies is limited at the level 2:1. Additionally, as per the provisions of Circular C168, the Company has ensured negative balance protection for its clients, factor to reducing the respective risk.
The risks related with the money laundering and terrorism financing as a result of the anonymity of the Virtual Currency is considered as fully mitigated since no actual payments in any actual cryptocurrencies will be accepted by the Company for deposit or withdrawal purposes.
Taking into consideration that virtual currencies are not appropriate for all investors and therefore, investors should not trade in such products if they don’t have the necessary knowledge and expertise in this specific product. In addition, clients should always be fully aware and understand the specific characteristics and risks related to these products.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs.
The Head of Reception and Transmission Department has the obligation to closely monitor the developments on CFDs and in general of Cryptocurrencies so as to ensure timely update of the respective policy, if deemed required, in collaboration with the Compliance Officer.
6.1 Before the Client begins to trade, he/she should obtain details of all commissions and other charges for which the Client will be liable, which may be found on Company’ website. Some charges may not be expressed in money terms but may, for example, be expressed as a dealing spread.
6.2 The Client takes the risk that his/her trades in CFDs may be or become subject to tax and/or any other duty, for example, because of any changes in legislation or changes to his/her personal circumstances. 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/her trades.
(= debentures, notes) are securities that obligate the issuer (= debtor) to pay the bondholder (= creditor, buyer) interest on the capital invested and to repay the principal amount according to the bond terms.
The bond yield is composed of the interest on the capital and any difference between the purchase price and the price achieved upon sale/redemption of the bond. Consequently, the return can only be determined in advance if the bond is held until maturity.
For the sake of comparison, an annual yield (based on the assumption of bullet repayment) is calculated in line with international standards. Bond yields which are significantly above the generally customary level should always be questioned, with an increased credit risk being a possible reason.
The price achieved when selling a bond prior to redemption (market price) is not known in advance. Consequently, the return may be higher or lower than the yield calculated initially. In addition, transaction costs, if any, must be deducted from the overall return.
There is always the risk that the debtor is unable to pay all or part of his obligations, e.g. in the case of the debtor's insolvency. The credit standing of the debtor must therefore be considered in an investment decision. Credit ratings (assessment of the creditworthiness of organisations) issued by independent rating agencies provide some guidance in this respect. The highest creditworthiness is "AAA". In the case of low ratings (e.g. "B" or "C"), the risk of default (credit risk) is higher but by way of compensation the instruments generally pay a higher interest rate (risk premium).
If a bond is kept until maturity, the investor will receive the redemption price as stated in the bond terms. Please note the risk of early calling-in by the issuer, to the extent permitted by the terms and conditions of the issue. If a bond is sold prior to maturity, the investor will receive the current market price. This price is regulated by supply and demand, which is also subject to the current interest rate level. For instance, the price of fixed-rate securities will fall if the interest on bonds with comparable maturities rises. Conversely, bonds will gain in value if the interest on bonds with comparable maturities falls. A change in the issuer's creditworthiness may also affect the market price of a bond.
The tradability of bonds depends on several factors, e.g. issuing volume, remaining time to maturity, stock market rules and market conditions. Bonds which are difficult to sell or cannot be sold at all must be held until maturity.
There is an interest rate risk associated with fixed income securities.
Market interest rates are set daily for short-term debt instruments (e.g. treasury accounts) until maturity (within a year) and for long-term debt instruments (e.g. bonds) until maturity. This takes place in the money market and the bond market. Market interest rates are influenced by analyses and assessments conducted by the central banks of various countries and other major institutional market players based on short-term and long-term trends while taking economic factors such as inflation, the state of the economy and interest rate changes in countries into consideration.
Financial instruments traded on the money market and the bond market (treasury accounts, treasury bonds and bonds issued by domestic loan institutions) are often traded in large quantities. If the interest rates increase, the fixed-income of already-issued securities will decrease in case they provide a fixed-income, as the newly issued bonds include interest rates which follow current market interest rates and thus provide a higher interest rate than already-issued instruments. On the contrary, the price of already-issued instruments increases if the market interest rates decrease.
If the issuer "pays off" the bond, your investment will be repaid sooner. Some bonds are redeemable by the issuer before the maturity date and some are not, this information can be found in the prospectus or the emission conditions. If the bond is redeemable, the prospectus shall state the "yield to maturity". Corporations can redeem their bonds when interest rates fall below their current price.
The amount of yield to maturity or the maturity of a bond may result in negative earnings due to the inflation rate for a given investment period. Please note that the interest rates are increasing along with the inflation rate although the yield on bonds is rising, the price of a particular bond is falling. Changes in interest rates during the term of any bond may affect the market value of the bond before the maturity date.
The bonds are traded on the stock exchange or over-the-counter. The Company may quote the buy and sell prices of bonds upon request.
These are special subordinated bonds issued by some of the banks. Interest payment can only be made if the bank has posted sufficient net profit for the year (before movement of reserves). Repayment of the capital prior to liquidation is subject to prorated deduction of the net loss accruing throughout the term of the supplementary capital bond.
These consist of three components, whose risk is borne by the bond purchaser: The investor purchases a bond (the bond component) whose interest rate includes an option premium. This structure therefore results in a higher interest rate than a comparable bond with the same maturity. The bond may be redeemed either in cash or in shares, depending on the price trend of the underlying stock (stock component). The bond purchaser is therefore the writer of a put option (option component) that sells to a third party the right to sell shares to him; in so doing, the bond purchaser agrees to accept the consequences if the share price changes in a direction that is contrary to his interests. The bond purchaser thus bears the risk of the price trend; in exchange, he receives a premium, the amount of which basically depends on the volatility of the underlying stock. If the bond is not held to maturity, that risk is compounded by interest rate risk. A change in the interest rate will affect the bond’s price and thus the bond’s net yield relative to its maturity. Please also see the corresponding risk notification in the sections on credit risk, interest rate risk, and price risk of shares. Your personal advisor will inform you about other types of special bonds such as bonds with warrants, convertible bonds, zero-coupon bonds, etc.