Market Volatility Disclosure
Delays
In a fast moving market attempts at canceling an existing order and replacing it
with a new one may result in an execution of duplicate orders. In such situations,
customers are wholly responsible for both executions and any resulting losses. High
volumes of trading at the market opening or intra-day may cause delays in execution
and executions at prices significantly away from the market price quoted or
displayed at the time the order was entered. Market Makers may execute orders
manually or reduce their size guarantees during periods of volatility, resulting in
possible delays in order execution and losses. Using limit orders is highly
recommended in order to avoid executions at prices significantly different from the
prices quoted at the time of order entry.
Quotes
In times of high market volatility, significant price discrepancies may exist
between the quote (real time or delayed) receive by the customer and the price at
which the trade is executed. In addition, the number of shares available at a
certain price (known as the size of a quote) may change rapidly, affecting the
likelihood of a quoted price being available to the customer. Enhanced risk exists
in this market environment for investors who employ short-term strategies such as
day trading.
Types of Orders
We are required to execute a market order fully and promptly without regard to
price. While a customer may receive a prompt execution of a market order, the
execution may be at a price significantly different from the current quoted price of
that security. Limit orders will be executed only at a specified price or better.
While the customer receives price protection, there is the possibility that the
order will not be executed.
When placing market orders for initial public offering (IPO) securities trading in
the secondary market, particularly those that trade at a much higher price than
their offering price, or in "hot stocks" (those that have recently traded for a
period of time under what is known as "fast market conditions," in which
the price of the security changes so quickly that quotes for a stock do not keep
pace with the trading price of the stock), customers' risk of receiving an execution
substantially away from the market price at the time they place the order may be
significantly reduced if they also include a cap (or floor) with the order above (or
below) which the order is not to be executed, by placing a limit order.
Access
Customers may suffer market losses during periods of volatility in the price and
volume of a particular stock when systems problems result in inability to place buy
or sell orders. Customers trading on-line may have difficulty accessing their
accounts due to high Internet traffic or because of systems capacity limitations.
When on-line trading has been disabled or is not available because of systems
limitations, customers may have difficulty reaching account representatives on the
telephone during periods of high volume. While every effort is made to ensure the
availability of electronic systems and brokers, no guarantee of access can be made
during periods of exceptionally heavy activity. In addition, system response and
account access times may vary or service may be interrupted due to other conditions,
including system performance, Internet traffic levels and other factors. Credence Global Bank
Invest's Business Continuity
Plan contains procedures for responding to these access problems.
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