Risk Disclaimer

Leveraged trading — general risks

Leverage allows you to control a position larger than your deposited capital. While leverage amplifies potential profits, it amplifies losses by exactly the same factor. A 1% adverse move in the underlying market can result in a loss of 10%, 20%, or more of your margin deposit depending on the leverage used.

Leveraged products can move quickly, and losses can exceed your initial deposit if negative balance protection is not in place. Even where negative balance protection is offered, it is typically applied per account reset and may not protect you in all scenarios (e.g. extreme market gapping events).

Forex-specific risks

• Currency risk: Exchange rates fluctuate continuously, 24 hours a day, five days a week. Major news events can cause sudden, large moves.
• Liquidity risk: During low-liquidity periods (e.g. market opens, public holidays) spreads can widen significantly, and orders may be filled at prices substantially worse than requested (slippage).
• Overnight swap costs: Holding positions past the daily rollover incurs swap/financing charges that accumulate over time and can erode profits or increase losses.
• Leverage magnification: Retail forex is commonly offered at leverage of up to 30:1 (EU/UK regulated) or higher in other jurisdictions. At 30:1, a 3.3% adverse move wipes out a full margin position.

CFD-specific risks

Contracts for Difference (CFDs) are complex instruments. According to data published by regulated brokers, the majority of retail investor accounts lose money when trading CFDs. The proportion varies by broker and period but is typically between 65% and 80% of retail accounts.

• You do not own the underlying asset. A CFD is a contract between you and your broker; you have no claim on the underlying shares, commodities, or indices.
• Overnight financing costs make CFDs expensive to hold long-term, particularly for long equity positions during periods of high interest rates.
• Counterparty risk: If your broker becomes insolvent, your positions may be closed and recovery of funds is not guaranteed beyond applicable compensation scheme limits.
• Margin calls: If your account falls below the required maintenance margin, your broker can close some or all of your positions without prior notice.

Cryptocurrency-specific risks

• Extreme volatility: Cryptocurrency prices can move 20–50% or more in a single day. Price moves of this magnitude can liquidate leveraged positions entirely within hours.
• Liquidation risk: On leveraged crypto exchanges, positions are automatically liquidated when the margin ratio falls below the maintenance level. Liquidation prices can be reached rapidly due to volatility.
• Regulatory uncertainty: Cryptocurrency is unregulated or lightly regulated in many jurisdictions. There are no universal protections equivalent to those covering regulated financial products.
• Exchange risk: Cryptocurrency exchanges can suspend withdrawals, be hacked, or become insolvent. Assets held on an exchange are subject to the exchange's own custody risk.
• Staking and yield: Staking rewards and DeFi yields are not guaranteed. Smart contract bugs, protocol changes, or "slashing" events can result in loss of staked assets.

Futures-specific risks

• Mark-to-market daily settlement: Futures positions are settled daily. Losses are debited from your account each day and can exceed your initial margin if markets move against you over several sessions.
• Delivery risk: Some futures contracts involve physical delivery of the underlying commodity. Retail traders must close positions before the first notice date to avoid unexpected delivery obligations.
• Exchange margin requirements change: Exchanges can raise margin requirements at any time, particularly in volatile markets. If your account doesn't meet the new requirement, positions can be liquidated.

Past performance

Past performance of any trading strategy, asset, or market is not indicative of, and does not guarantee, future results. Backtested or historical results shown in any PositionCalc content are illustrative only and do not account for transaction costs, slippage, or the psychological challenges of live trading.

Not financial advice

Nothing on PositionCalc — including calculator outputs, guides, blog posts, broker reviews, or any other content — constitutes financial advice, investment advice, or a recommendation to trade any specific instrument. The calculators are mathematical tools to assist with your own analysis.

Before trading leveraged products, you should carefully consider whether trading is appropriate for you given your financial circumstances, investment experience, and risk appetite. Consider seeking independent financial advice from a qualified adviser if you are unsure.

Suitability

Leveraged trading products are not suitable for:

• Investors who cannot afford to lose their entire investment
• People who need the invested funds for essential living expenses
• Investors who do not understand how leverage, margin, and liquidation work
• Anyone trading with borrowed money or credit card funds