Do not invest in derivatives with money you cannot afford to lose. An investment in derivatives carries a high degree of risk to the investor, and which due to fluctuations in value, the investor may not get back the amount he has invested. With certain transactions clients may not only lose what they have invested at the outset but may incur a liability to pay further unspecified amounts at a later date.
The inherent concept of Derivatives means that they are not suitable for an investor seeking an income from his investments because the income from such investments may fluctuate in value in money terms. For an investment in an OTC product, which is not a readily realisable investment, it may be difficult to sell or realise the investment and obtain reliable information about its value or the extent of the risks to which it is exposed.
The value of investments denominated in foreign currencies may diminish or increase due to changes in the rates of exchange. Derivatives are therefore only suitable for those customers who fully understand the market risk and have previous trading experience. It is advisable to seek independent advice if necessary.
