Understanding the Risks

This Risk Disclosure Statement ("Statement") is provided by XA Markets Ltd, a company registered in the Union of Comoros with registration number HY00823026, and headquartered at Bonovo Road, Fomboni, Island of Mohéli, Comoros Union.

This Statement is intended to inform you of the risks involved in trading financial instruments, including but not limited to Contracts for Difference (CFDs), foreign exchange (Forex), commodities, indices, and cryptocurrencies. It does not constitute financial advice and does not purport to be comprehensive. The risks described are not exhaustive — different trading strategies and instruments may expose you to additional and/or different risks.

You should not trade unless you fully understand the nature of the transactions you are entering into, and the risks to which you are exposed. You should seek independent financial advice if in doubt.

Trading in leveraged financial instruments involves substantial risk. You should be aware that:

• You may lose all of your deposited capital and, in some cases, potentially more.
• Past profits are not indicative of future results.
• Markets can move rapidly and unexpectedly, causing significant losses in a very short period of time.
• The use of leverage amplifies both profits and losses proportionally.
• Leveraged trading is not suitable for all investors. Only trade with money you can afford to lose entirely.
• Complex trading strategies (including automated trading) do not eliminate risk and may introduce additional risks.

XA Markets strongly recommends that you use a demo account to familiarise yourself with trading mechanics before risking real capital.

CFDs and Forex are leveraged products. Leverage allows you to control a larger market position with a smaller initial deposit (margin). Whilst leverage can amplify your gains, it equally amplifies your losses.

Margin calls

If your account balance falls below the required margin level, you may receive a margin call requiring you to deposit additional funds immediately. If you fail to meet a margin call, XA Markets may close some or all of your open positions, potentially at a loss.

Stop-out level

XA Markets operates a stop-out mechanism. When your equity falls to or below the stop-out level (as stated in your account terms), the platform will automatically close positions starting from the least profitable to protect against further losses.

Negative balance protection

XA Markets provides negative balance protection on retail accounts, meaning your losses on a single account cannot exceed your deposited balance. This protection does not apply to professional clients.

Financial markets are subject to rapid and unpredictable price movements. High volatility can be caused by:

• Economic data releases (e.g., NFP, CPI, GDP figures).
• Central bank decisions and interest rate announcements.
• Geopolitical events, elections, and government policy changes.
• Natural disasters, pandemics, or other unforeseen global events.
• Market sentiment and speculative trading activity.
• Low liquidity periods (e.g., market open/close, holidays).

During high-volatility periods, your orders may be executed at a price different from your requested price (slippage). Stop-loss orders may not be executed at the exact price specified.

When trading CFDs with XA Markets, XA Markets acts as the counterparty to your trades. This means your profit is XA Markets' loss and vice versa. The financial soundness of XA Markets is therefore relevant to the security of your account.

XA Markets maintains client funds in segregated accounts, separate from company operating funds, with reputable banking institutions. However, segregation does not eliminate counterparty risk entirely. In the event of insolvency of XA Markets, the recovery of client funds cannot be guaranteed beyond regulatory provisions.

Liquidity refers to the ease with which a financial instrument can be bought or sold at a stable price. Some instruments may become illiquid under certain market conditions, meaning:

• It may not be possible to execute your trade at your preferred price.
• Spreads (the difference between bid and ask prices) may widen significantly.
• Orders may be delayed or partially filled.
• Stop-loss and limit orders may not be executed at the specified price.

Liquidity risk is particularly pronounced during periods of extreme market stress, major news announcements, or outside normal trading hours.

Electronic trading is dependent on the reliable functioning of complex technology systems. You should be aware of the following risks:

• Platform outages: Technical failures may prevent you from accessing your account or executing trades at critical moments.
• Internet connectivity: Poor or lost internet connectivity can delay or prevent order execution.
• Data feed errors: Incorrect or delayed pricing data may lead to trades being executed at unexpected prices.
• Cybersecurity threats: Hacking, phishing, and other cyberattacks could compromise your account security.
• Software bugs: Errors in trading algorithms or expert advisors (EAs) can result in unintended trades.

XA Markets maintains redundant systems and backup infrastructure to minimise disruptions, but cannot guarantee uninterrupted service. You should always have a backup means of contacting us to manage your positions in the event of a platform failure.

If your trading account is denominated in a currency different from your base currency, you are exposed to foreign exchange risk. Fluctuations in exchange rates may increase or decrease the value of your account balance, deposits, and profits when converted to your home currency.

Currency risk applies even if the traded instrument itself is denominated in your home currency, as profits and losses may still be subject to conversion.

Positions held overnight are subject to overnight financing charges (swap rates), which may add to your costs or represent a credit depending on the instrument and direction of your trade.

Positions held over the weekend or through bank holidays are particularly exposed, as markets may open at significantly different prices from where they closed. This is known as "gap risk" and can result in losses that exceed your stop-loss levels. XA Markets may apply triple swap charges for positions held over the weekend to reflect this extended exposure.

Regulatory changes can have a significant impact on the availability of certain products, leverage limits, and trading conditions. Regulatory bodies may at any time:

• Restrict or ban the sale of particular financial instruments.
• Impose lower leverage caps on retail clients.
• Require additional margin, disclosures, or risk warnings.
• Suspend or revoke operating licences.

XA Markets operates in compliance with its regulatory obligations and will communicate material regulatory changes to clients promptly.

Past performance of any financial instrument, trading strategy, or XA Markets product is not necessarily indicative of future results. Historical data, backtesting results, and simulated performance do not guarantee future profitability.

Any projections, forecasts, or market commentary provided by XA Markets (including through educational materials, market analysis, or trading signals) are for informational purposes only and do not constitute investment advice or a recommendation to trade.

Our services are not available to residents of all countries. Residents of certain jurisdictions (including but not limited to the United States of America, Canada, and certain other restricted territories) are not permitted to open accounts with XA Markets.

It is your responsibility to ensure that use of our services is lawful in your jurisdiction. XA Markets does not accept liability for any losses arising from use of our services in jurisdictions where they are prohibited or restricted.

By opening an account with XA Markets, you confirm that:

• You have read, understood, and accepted this Risk Disclosure Statement in full.
• You understand that trading in leveraged products carries a high risk of losing money.
• You are aware that you may lose some or all of your invested capital.
• You have considered your financial situation and are satisfied that trading is appropriate for you.
• You have not relied on any representation made by XA Markets other than those contained in the official documentation.