Understand the downside before the opportunity.

General securities-market risk

Market prices may move because of economic conditions, company developments, policy changes, liquidity, sentiment, events and information that was not available when a view was prepared.

Options and futures risk

Derivatives can reprice rapidly and may not suit every participant. Leverage, time decay, implied volatility, expiry, margin changes and liquidity can materially affect outcomes.

• Loss can occur quickly
• Margin is not maximum risk
• Near-expiry contracts can be highly sensitive
• Liquidity and bid-ask spreads matter

Gap, slippage and execution risk

A stop or invalidation reference does not guarantee execution at that exact price. Fast markets, overnight gaps, circuit limits, order rejection and limited liquidity can increase realised loss.

Research limitations

Research is based on information and assumptions available at a point in time. Data errors, interpretation differences and unexpected events can change a scenario. A view can be wrong even when the process is disciplined.

Personal responsibility

Consider your objectives, knowledge, financial situation, time horizon and ability to absorb loss. Do not use borrowed money or funds required for essential needs to take market risk.