Forex LIQUIDATION

LIQUIDATION LEVEL. Subject to all additional rights of forex.com under the Customer Agreemen t, in the event that, in the sole opinion of Forex.com and in accordance with Forex.com’s reasonable best estimate of then prevailing obtainable market Spot Rates, and regardless of whether or not prior Margin Calls have been issued or met, if the Margin Balance should at any time equal or fall below the Minimum Margin Requirement for Customer’s Account in the aggregate, Forex.com will have the right but not the obligation to liquidate any part of or all Open Positions in Customer’s Account. Clients are responsible for placing their own Stop Loss Orders to minimize losses. Any failure by Forex.com to enforce its rights hereunder shall not be deemed a future waiver of such rights by Forex.com. Forex.com does not make margin calls in the ordinary course of business. Forex.com maintains the right to liquidate Customer positions as described above. However, Forex.com may from time to time and in its sole discretion, call Customer and request that Customer deposit additional Collateral to secure Customer’s obligations to Forex.com, over and above the balance in Customer’s Account. Any call for additional margin without exercising the rights to liquidate Customer positions shall not be deemed precedent for future calls nor future waiver of such liquidation rights by Forex.com.

Forex MARGIN

MARGIN REQUIREMENTS. Customer shall provide and maintain with Forex.com margin in such amounts and in such form that Forex.com, in it is sole discretion may require. Forex.com does not require Customers to pay the full price of Foreign Currencies or metal Customer may buy and sell. Instead, Customer is required to post a small percentage of the full amount which Customer is obligated to pay to Forex.com under the Contract, to secure Customer’s obligations to Forex.com. Margin includes Required Margin for Open Positions, which is based on (i) the Opening Margin Requirement; (ii) the Minimum Margin Requirement; (iii) the market value of Open Positions; and (iv) any additional amount as Forex.com, in its sole discretion, believes is prudent to require. Customer must maintain the Minimum Margin Requirement on their Open Positions at all times. Forex.com has the right to liquidate any or all Open Positions whenever the Minimum Margin Requirement is not maintained, according to paragraph 6 hereof. Margin requirements are subject to change at any time in Forex.com’s sole discretion and without prior notice. No previous margin requirement shall preclude Forex.com from increasing that requirement without prior notice. Forex.com may, in its sole discretion, elect to impose on a disclosed on undisclosed basis limitations on the maximum number of Open Positions allowed at any time

Forex Trading Is

Trading Is Very Speculative and Risky. Foreign Exchange Trading and Spot Metal Trading is highly speculative and is 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. Foreign Exchange and Spot Metal Trading and is not an appropriate investment for retirement funds. Customer represents, warrants and agrees that Customer understands these risks; that Customer is willing and able, financially and otherwise, to assume the risks of Foreign Exchange Trading and Spot Metal Trading and that loss of Customer’s entire Account Balance will not change Customer’s life style.2. High Leverage And Low Margin Can Lead To Quick Losses. The high leverage and low Margin associated with Foreign Exchange Trading and Spot Metal Trading can result in significant losses due to price changes in Foreign Exchange Contracts, Cross Currency Contracts and Metal Contracts. Customers must maintain the Minimum Margin Requirement on their Open Positions at all times. It is the customer's responsibility to monitor his/her Account Balance. Forex.com has the right to liquidate any or all Open Positions whenever the Minimum Margin Requirement is not maintained. Increasing leverage increases risk.3. Prices, Margin And Valuations Are Set By Forex.com And May Be Different From Prices Reported Elsewhere. Forex.com will provide prices to be used in trading, valuation of Customer positions and determination of Margin requirements. Although Forex.com expects that these prices will be reasonably related to prices available in the interbank market, prices reported by Forex.com may vary from prices available to banks and other participants in what is known as the interbank market. Forex.com will exercise considerable discretion in setting and collecting Margin. Forex.com is authorized to convert funds in Customer’s Account for Margin into and from such Foreign Currency and Metal at a rate of exchange determined by Forex.com in its sole discretion on the basis of then-prevailing money market rates.4.

What is margin borrowing?

Margin borrowing is a feature on an Individual or Joint brokerage account in which the broker (ShareBuilder) extends credit to you, the customer, to purchase securities or to withdraw excess cash for use outside your account. The account equity (securities and cash) is used as collateral for the loan that is taken out in the account.
If the value of the stock in the account increases, the buying power and loan availability of your account increases. Conversely, if the value of the stock drops sufficiently, you will be required to deposit more cash or sell a portion of the stock to cover a margin call.
Important: Buying securities on margin is not appropriate for all investors. Before investing on margin, please read the Margin Account Agreement for important risk disclosure information, and see ShareBuilder's margin interest rates.

What is options trading?

An option is a financial instrument that you can buy and sell with the goal of generating other income on stocks you already own or to speculate on stock price movements.
There are two basic types of options: calls and puts.
A call option contract gives the owner the right (but not the obligation) to buy a specified amount of an underlying security, typically 100 shares per contract, at a specified price within a specified time.
A put option contract gives the owner the right, but not the obligation, to sell a specified amount of an underlying security, typically 100 shares per contract, at a set price within a specified time. The buyer of a put option estimates that the value of the underlying asset will drop below the exercise price before the expiration date.
Please note: Options involve risk and are not suitable for all investors. Before investing in options, please read the Characteristics and Risks of Standardized Options.

Relation of the stock market to the modern financial system

The financial system in most western countries has undergone a remarkable transformation. One feature of this development is disintermediation. A portion of the funds involved in saving and financing flows directly to the financial markets instead of being routed via the traditional bank lending and deposit operations. The general public's heightened interest in investing in the stock market, either directly or through mutual funds, has been an important component of this process. Statistics show that in recent decades shares have made up an increasingly large proportion of households' financial assets in many countries. In the 1970s, in Sweden, deposit accounts and other very liquid assets with little risk made up almost 60 percent of households' financial wealth, compared to less than 20 percent in the 2000s. The major part of this adjustment in financial portfolios has gone directly to shares but a good deal now takes the form of various kinds of institutional investment for groups of individuals, e.g., pension funds, mutual funds, hedge funds, insurance investment of premiums, etc. The trend towards forms of saving with a higher risk has been accentuated by new rules for most funds and insurance, permitting a higher proportion of shares to bonds. Similar tendencies are to be found in other industrialized countries.

Function and purpose

The stock market is one of the most important sources for companies to raise money. This allows businesses to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate.