1. Nature of CFD Trading
Contracts for Difference (CFDs) are leveraged derivatives. A small market movement can produce a proportionately larger impact on funds you have deposited. You may sustain losses in excess of your initial deposit, although retail clients are protected by negative balance protection.
2. Market Risk
Financial markets are volatile. Prices can move rapidly against your position due to economic data, geopolitical events, central bank decisions, or unexpected news. There is no guarantee of profit.
3. Leverage Risk
Leverage amplifies both potential gains and losses. Trading with maximum leverage means small adverse moves can result in significant losses or the liquidation of your entire position.
4. Liquidity Risk
Some instruments may experience reduced liquidity during off-hours, holidays, or major news events. This can result in wider spreads, slippage, or the inability to close positions at desired prices.
5. Counterparty Risk
You trade with Xylo Markets as your counterparty. Although client funds are segregated in Tier-1 banks, no financial institution is entirely immune from default. Xylo Markets maintains professional indemnity insurance covering up to US$1 million per client claim in the unlikely event of insolvency.
6. Technology Risk
Internet, platform, or hardware failures may prevent you from accessing your account or executing trades. We maintain redundant systems but cannot guarantee uninterrupted service.
7. Currency Risk
Trading instruments denominated in currencies other than your account base currency exposes you to FX fluctuations on profits, losses, and margin requirements.
8. Tax Risk
Tax treatment of trading profits varies by jurisdiction and personal circumstances. You should seek independent tax advice. Xylo Markets does not provide tax guidance.
9. Suitability
Before trading, you should consider your investment objectives, level of experience, and risk appetite. If in doubt, seek independent financial advice.