Risk Disclosure

Risk Disclosure

Following is the Risk Disclosure by VBS Financial Securities (hereafter referred to as “VBS Financial Securities”).

You (the client or prospective client) are provided this disclosure in compliance with the rules and regulations in Montenegro as you suggest to undertake dealings in financial instruments in the forms of Foreign Exchange Contracts (“FX Contracts”) and/or Contracts for differences (“CFDs”) with VBS Financial Securities.

The disclosure is to help you apprehend the essence and risks associated with the above-mentioned financial products and services. All Clients and prospective clients should carefully read this document before applying for a trading account and trading. However, it should be noted that this document does not disclose or explain all the risks and other significant aspects involved in dealing with Financial Instruments. The disclosure is to explain in general terms the nature of risks involved when trading Financial Instruments on a fair and non-misleading basis.

General Risk Warning Regarding Complex Financial Instruments (Derivative Financial Instruments such as CFDs)

Trading CFDs and FX Contracts is highly speculatory, implicates significant risk of loss, and is not appropriate for all and only for those who:

  1. i) comprehend and are willing to bear economic, legal, and other risks involved;
  2. ii) experienced and acquainted with trading in derivatives and underlying asset types; and

iii) financially able to bear losses significantly above margin or deposits because investors may lose the totality of a contract, not just the margin or the deposit.

Neither CFDs nor FX Contracts are appropriate investments for retirement funds. CFD and FX transactions are among the riskiest investments and can result in considerable losses. Customer represents, warrants and agrees that Customer understands these risks, is willing and able, financially and otherwise to assume the risks of trading CFDs and FX Contracts and that the loss of Customer’s entire account balance will not change Customer’s lifestyle.

You must not commit to this form of investing unless you comprehend the nature of the transaction you are about to enter and the true scope of your exposure to the risk of loss.

Your profit and loss will vary to the extent of fluctuations underlying market pricing on which the trade is based, and losses could exceed your initial deposit. If you have any doubt you should seek independent advice.

The purpose of transactions is to ensure a profit or evade a loss by reference to the underlying market pricing. In the context these activities, the underlying tool may be;

a security, a basket of securities, a securities index, exchange rate of two currencies, a treasury product, a bullion, a commodity, or such other investment as agreed in writing.

It is a term of each Transaction that:

  1. i) neither party acquires any interest in or right to acquire or is obliged to sell, buy, hold, deliver or receive the underlying instrument; neither party acquires any voting rights regarding the underlying instrument; and
  2. ii) the rights and obligations of each party under the Transaction are primarily to make and receive such related payments.

You maybe called to deposit a substantial more margin at short notice to maintain a position. If you do not provide such additional funds within the time required, your position may be closed at a loss, and you will be liable for any resultant deficit. You should monitor your positins closely and always have access to our platforms when you have open positions or pending orders.

Risks related to long CFD positions, i.e. for purchasers of CFDs

Being long in CFD means you are buying the CFDs on the market by assuming that the market price of an asset will rise between the time of the purchase and sale. As the owner of a long position, you will typically make a profit if the price rises while your CFD long position is open. Otherwise, you will generally make a loss, if the market price falls while your CFD long position is open. Your potential loss may therefore be larger than the initial margin deposited. Additionally, you might suffer a loss due to the closure of your position if you do not have enough liquidity for the margin on your account to maintain it open.

Risks related to short CFD positions, i.e. for sellers of CFDs

Assuming a short position in Contracts for Difference (CFD) entails the sale of CFDs with the expectation that the market price will decrease between the time of purchase and sale. As the holder of a short position, profit is generally realized if the price decreases while the CFD short position is open. Conversely, a loss is generally sustained if the market price increases while the CFD short position is open. The potential loss may exceed the initial margin deposited. Additionally, a loss may also be incurred as a result of the closure of the position due to insufficient liquidity to maintain the margin requirements on the account.

Cash Settlement

The customer acknowledges that the settlement of Contracts for Difference (CFD) and foreign exchange (FX) transactions will be conducted solely in cash, with the final outcome of the investment being influenced by the difference between the purchase and sale prices.

Not Advice

Our services are provided on an execution-only basis and do not include investment, tax, legal, regulatory, or financial advice. The information we provide is factual in nature and does not take into account your personal circumstances such as available funds and risk tolerance. We may provide factual market information or information regarding a specific transaction, including potential risks and methods for minimizing those risks. The decision to utilize our products is made solely by the client, and it is recommended that independent professional advice is sought from a qualified advisor on any investment, financial, legal, regulatory, tax, or related matters prior to engaging with us.

Currency Risk

Investing in foreign exchange (FX) Contracts and Contracts for Difference (CFDs) with underlying assets denominated in a currency other than the investor’s base currency entails currency risk. This

is because the settlement of the CFD or FX Contract in a currency other than the base currency may impact the value of the return when it is converted back to the base currency.


Gapping, also known as slippage, refers to a situation where the market moves past a specified Stop Loss level. This can occur due to increased volatility in the underlying market, which may temporarily halt trading and then reopen at a price below the Stop Loss level. In such cases, the Stop Loss may not be effective, and the position will be closed at the prevailing quote from VBS Financial Securities.

It is important to be aware of the potential for gapping when holding open positions in a volatile market environment.

Accordingly, where you have an open position in a volatile market environment you must understand the potential impact of Gapping.

Advice and Recommendations

The company will not provide the client with any form of investment advice, including advice on the suitability of a specific transaction. The client understands that the services offered by the company do not include providing investment advice for contracts for difference (CFDs) or the underlying markets. The client will be solely responsible for entering into transactions and making decisions based on their own judgment.

In any transaction the client represents that they have conducted their own independent research and investigation into the risks associated with the transaction and have sufficient knowledge, market sophistication, professional advice, and experience to evaluate the merits and risks of the transaction. The company does not provide any warranty regarding the suitability of products traded under this agreement and does not have a fiduciary duty towards the client.

The company will not be obligated to provide the client with legal, tax, or other advice related to the transaction. The client should seek independent expert advice if they have any doubts about potential tax liabilities. The client is advised that tax laws are subject to change.

The company may, at its discretion, provide the client with information, news, market commentary, or other information, but this is not considered a service. This information may be provided through newsletters posted on the company’s website or provided to subscribers via the website or trading platform.

Where it does so:

  1. a) the Company will not be accountable for such information
  2. b) The company does not provide any representation, warranty, or guarantee regarding the accuracy, correctness, or completeness of the information provided, or regarding any potential tax or legal consequences related to any transactions,
  3. c) The information provided is intended solely to allow the client to make their own investment decisions and should not be considered as investment advice or unsolicited financial promotions to the client,
  4. d) If the document includes any restrictions on its intended audience or distribution, the client agrees to not share it with any such person or group of persons who are restricted from receiving it.
  5. e) The client acknowledges that the company may have acted on information provided before it is dispatched to the client, that the company does not provide any representation or guarantee as to the time of receipt by the client. Therefore, the client may not receive the information at the same time as other clients.

It should be noted that any market commentary, news, or other information provided or made available by the company is subject to change and may be withdrawn at any time without notice.