Risk Factors

The past performance of any investment is not necessarily a guide to future performance. The value of investments or income from them may go down as well as up. As stocks and shares are valued from second to second, their bid and offer value fluctuates sometimes widely. The value of shares may rise as well as fall due to, and not just including, the volatility of world markets, interest rates, economic conditions/data and/or changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested.

Alternative Investment Market
This is a market designed primarily for emerging or smaller companies. The rules of this market are less demanding than those of the official List of the London Stock Exchange and therefore carry a greater risk than a company with a full listing. With AIM shares there is often a big difference between the buying price and the selling price. If they have to be sold immediately, you may get back much less than you paid for them. The price may change quickly and it may go down as well as up.

If you have any doubt whether any investment is suitable for you, you should obtain expert advice.

Execution Only Risk Warning:

As an execution only client, you have been informed that investment within the markets chosen are only suitable for experienced investors. Any decisions on investments are purely your own choice and Logic Investments will not provide any advice on these investments. We will execute the transactions for you only. You will therefore be responsible for loss with the investments chosen. Please ensure you fully read and understand the risks involved in any decision you make. If you have any doubt whether any investment is suitable for you, you should obtain expert advice.

CFDs & Spread Bet Risk Warning:

By transacting in Contract for Differences and Spread betting, you are subject to a higher level of risks than the risks associated with transactions in traditional shares. You may not get back the amount initially invested and may be required to make additional payments by way of margin payments on a frequent basis. Investors in CFDs may be subject to unlimited losses.

You should not deal in CFDs or Spread Bets unless you understand their nature and the extent of your exposure to risk. You should also be satisfied that the product is suitable for you in the light of your circumstances and financial position. Although CFDs/Spread Bets can be utilised for the management of investment risk, it may not be suitable for some investors. In deciding whether to trade in CFDs/Spread Bets, you should be aware of the following points:

CFDs/Spread Bets can only be settled in cash. Investing in a CFD/Spread Bets carries the same risks as investing in a future or an option or other derivative product. Transactions in CFDs/spread Bets may also have a contingent liability and you should be aware of the implications of this as set out in paragraph 6.

We recommend that you familiarise yourself with our CFD examples provided on our website and in our client brochure. The examples transaction show both positive (profit) and negative (loss) scenarios.

Markets may be volatile and it may be difficult or impossible to liquidate a position:
Under certain trading conditions it may be difficult or impossible to liquidate a position. This may occur, for example, at times of rapid price movement if the price rises or falls in one trading session to such an extent that trading in the underlying market is suspended or restricted.

Non-Guaranteed Stops do not necessarily cap your loss to the intended amount:
Placing Non-Guaranteed Stop Order will not necessarily limit your losses to the intended amounts, because market conditions may make it impossible to execute such an Order if the underlying market moves straight through the stipulated price.

Guaranteed Stop Orders are available at a premium:
Although our staff will always recommend the use of stop losses this may not suit your individual requirements and the decision is ultimately yours to place these orders

Futures & Options Risk Warning:

Futures
Transactions in futures involve the obligation to make, or to take delivery of the underlying asset of the contract at a future date, or in some cases to settle your position with cash. They carry a high degree of risk. The “gearing” or “leverage” often obtainable in futures trading means that a small deposit or down payment can lead to large losses as well as gains. It also means that a relatively small market movement can lead to a proportionately much larger movement in the value of your investment, and this can work against you as well as for you Futures transactions have a contingent liability, and you should be aware of the implications of this, in particular the margining requirements, which are set out in paragraph 6.

Options
There are many different types of options with different characteristics subject to different conditions:

Buying options:
Buying options involves less risk than selling options because, if the price of the underlying asset moves against you, you can simply allow the option to lapse. The maximum loss is limited to the premium, plus any commission or other transaction charges. However, if you buy a call option on a futures contract and you later exercise the option, you will acquire the future. This will expose you to the risks described under “futures” and “contingent liability transactions”.

Writing options:
If you write an option, the risk involved is considerably greater than buying options. You may be liable for margin to maintain your position and a loss may be sustained well in excess of any premium received. By writing an option, you accept a legal obligation to purchase or sell the underlying asset if the option is exercised against you, however far the market price has moved away from the exercise price. If you already own the underlying asset which you have contracted to sell (known as “covered call options”) the risk is reduced. If you do not own the underlying asset (known as “uncovered call options”) the risk can be unlimited. Only experienced persons should contemplate writing uncovered options, and then only after securing full details of the applicable conditions and potential risk exposure.

Traditional options:
A particular type of option called a “traditional option” is written by certain London Stock Exchange firms under special exchange rules. These may involve greater risk than other options. Two-way prices are not usually quoted and there is no exchange market on which to close out an open position or to effect an equal and opposite transaction to reverse an open position. It may be difficult to assess its value or for the seller of such an option to manage his exposure to risk.
Certain options markets operate on a margined basis, under which buyers do not pay the full premium on their option at the time they purchase it. In this situation you may subsequently be called upon to pay margin on the option up to the level of your premium. If you fail to do so as required, your position may be closed or liquidated in the same way as a futures position.

Foreign Exchange Risk Warning:

Transactions in Foreign Exchange contracts carry a high degree of risk, and may not be suitable for all investors. The “gearing” or “leverage” often obtainable in Foreign Exchange trading means that a relatively small market movement can lead to a proportionately much larger movement in the value of your liability. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Contingent Liability Transactions

Contingent liability transactions, such as CFDs and other financial products traded on margin will require you to make a series of payments against the purchase price, instead of paying the whole purchase price immediately.

If you trade in CFDs or other products traded on margin you may sustain a total loss of the margin you deposit to establish or maintain a position. If the market moves against you, you may be called upon to pay substantial additional monies or margin at short notice to maintain the position. If you fail to do so within the time required, your position may be liquidated at a loss and you will be liable for any resulting deficit.

Even if a transaction is not margined, it may still carry an obligation to make further payments in certain circumstances over and above any amount paid when you entered the contract.
CFD trades will be carried out for you whenever possible on or under the rules of a recognised or designated investment exchange. However, contingent liability transactions entered into by you that are not traded on or under the rules of a recognised or designated investment exchange (such as foreign exchange transactions) may expose you to substantially greater risks.

Before you begin to trade, you should obtain details of all commissions and other charges for which you will be liable. If any charges are not expressed in money terms (but, for example, as a percentage of contract value), you should obtain a clear and written explanation, including appropriate examples, to establish what such charges are likely to mean in specific money terms. In the case of futures, when commission is charged as a percentage, it will normally be as a percentage of the total contract value, and not simply as a percentage of your initial payment.

Bonds

Bonds are issued by companies, public institutions and/or governments. The value of a bond will fall in the event of the default or reduced credit rating of the issuer. Similarly, an increase in credit rating (or narrowing of credit spreads) can lead to capital appreciation.
Bonds are, inter alia, subject to the following risks:
Counterparty risk: If the issuer of bonds is partially, or in total, unable or fails to honour its obligations, the investment may suffer a corresponding loss. As secured financial instruments, covered bonds, address this risk.
Inflation risk: If inflation and/or inflation expectations increase, then the value of the investment may decrease and the investor may ultimately suffer a loss.
Risk of changing interest rates: The market interest rate is material for the value of a bond, because bonds might become less economically attractive in times of increasing interest rates and, thus, decrease in value. If sold before maturity, the owner may suffer a loss.
The risks factors stated above do not cover all the risks of investing in bonds.

Exchange Traded Funds (ETFs)

Exchange Traded Funds (ETFs) are investment funds, similar to unit trusts and OEICs but they are traded like shares. ETFs closely track the performance of an index and as such their value can go down as well as up and you may get back less than you invested. Also, past performance is not a reliable indicator to future performance.
The value of an ETF may be affected by market values, interest rates, exchange rates, volatility, dividend yields and issuer credit ratings. These factors are interrelated in complex ways, and as a result, the effect of any one factor may be offset or magnified by the effect of another factor. You should ensure that the ETF meets your own objectives and circumstances, and consider the possible risks and benefits of purchasing the ETF

Alternative Investment Market (AIM)

This is a market designed primarily for emerging or smaller companies. The rules of this market are less demanding than those of the official List of the London Stock Exchange and therefore carry a greater risk than a company with a full listing. With AIM shares there is often a big difference between the buying price and the selling price. If they have to be sold immediately, you may get back much less than you paid for them, and you may have difficulty in selling them at a reasonable price and in some circumstances it may be difficult to sell at any price. The price may change quickly and it may go down as well as up.

Smaller Companies (Penny Shares)

You run extra risks of losing money if you buy shares in smaller companies including “penny shares”. There is often a big difference between the buying price and the selling price of these shares. If you have to sell such shares immediately, you may realise much less than you paid for them and you may also have difficulty in selling. The price of penny shares may change quickly, it may go down as well as up and it may be more difficult to sell such shares. You should not invest amounts you cannot afford to lose.