Common use of Risks of Transactions Clause in Contracts

Risks of Transactions. 13.1 The Client acknowledges and understands that there are risks involved in Transactions, including: the “gearing” or “leverage” involved in investing in Admiral Products means that a small Initial Margin payment can potentially lead to large losses for the Client, including more than all of the Margin ever paid to Admiral; the geared nature of some Transactions also means that acquiring and holding them can carry greater risks than directly investing in the Underlying Reference Instrument which generally are not geared; a relatively small market movement can lead to a proportionately much larger movement in the value of your investment, and this can work against you as well as for you; over-the-counter Transactions are derivatives not made on any exchange so might be considered to involve a greater risk than an exchange-traded derivative since there is no exchange market on which to Close Out an open position – you are only able to open and close your positions with us; markets outside of Australia might involve different risks to Australian markets, so the potential for profit or loss from Transactions relating to a non-Australian market or denominated in non- Australian currency will be affected by fluctuations in foreign exchange rates; it is possible to incur a loss if, after your acquisition of an investment, exchange rates change to your detriment, even if the price of the Underlying Reference Instrument to which the Transaction relates remains unchanged; you may sustain a total loss of the Margin that you deposit with or pay to us to establish or maintain a position and if the market moves against you, you may be called upon to pay substantial additional Margin at short notice but if you fail to do so within the required time, your investment position may be liquidated at a loss to you and you will be liable for any remaining deficit in your Account; you will be deemed to have received a notice requiring the payment of more margin, even if you are not contactable, or actually contacted, at the telephone, mail or email address you gave us or do not receive the messages we leave for you, if the notices are delivered to your nominated contact addresses; under some trading conditions it may be difficult or impossible to liquidate a position, such as (but not limited to) at times of rapid price movement if the price rises or falls in one trading session to such an extent that trading in the underlying market is suspended or restricted; if the Client trades in denominated currencies other than Account Currency the Client may lose money or value of the investment due to exchange rate fluctuations and that these losses may be in addition to any losses on the value of the Underlying Reference Instrument relevant to the Transactions; gapping, whereby a market price falls or rises without the opportunity to trade, can result in significant losses even when a stop loss has been put on because it may not be possible to transact at the nominated price if the market has gapped; in some circumstances Underlying Reference Instruments may be halted, suspended from trading or have their quotation for trading withdrawn from an exchange and these factors might affect the value of your Transaction relating to those Underlying Reference Instruments due to Admiral exercising its discretion to determine the fair value of them; a market disruption may mean the Client is unable to trade when desired, and the Client may suffer a loss as a result, including examples of disruption include the “crash” of a computer based trading system, fire or other exchange emergency or a regulatory body could declare an undesirable situation has developed in a particular contract and suspend trading; and you may incur losses that are caused by matters outside our control for example, a regulatory authority exercising its powers during a market emergency may result in losses for the client or a regulatory authority can suspend trading (for example in an Underlying Reference Instrument) or alter the price at which a position is settled, which could also result in a loss to the client.

Risks of Transactions. 13.1 14.1 The Client acknowledges and understands that there are risks involved in Transactions, including: the “gearing” or “leverage” involved in investing in Admiral Products means that a small Initial Margin payment can potentially lead to large losses for the Client, including more than all of the Margin ever paid to Admiral; the geared nature of some Transactions also means that acquiring and holding them can carry greater risks than directly investing in the Underlying Reference Instrument which generally are not geared; a relatively small market movement can lead to a proportionately much larger movement in the value of your investment, and this can work against you as well as for you; over-the-counter Transactions are derivatives not made on any exchange so might be considered to involve a greater risk than an exchange-traded derivative since there is no exchange market on which to Close Out an open position – you are only able to open and close your positions with us; markets outside of Australia might involve different risks to Australian markets, so the potential for profit or loss from Transactions relating to a non-Australian market or denominated in non- Australian currency will be affected by fluctuations in foreign exchange rates; it is possible to incur a loss if, after your acquisition of an investment, exchange rates change to your detriment, even if the price of the Underlying Reference Instrument to which the Transaction relates remains unchanged; you may sustain a total loss of the Margin that you deposit with or pay to us to establish or maintain a position and if the market moves against you, you may be called upon to pay substantial additional Margin at short notice but if you fail to do so within the required time, your investment position may be liquidated at a loss to you and you will be liable for any remaining deficit in your Account; you will be deemed to have received a notice requiring the payment of more margin, even if you are not contactable, or actually contacted, at the telephone, mail or email address you gave us or do not receive the messages we leave for you, if the notices are delivered to your nominated contact addresses; under some trading conditions it may be difficult or impossible to liquidate a position, such as (but not limited to) at times of rapid price movement if the price rises or falls in one trading session to such an extent that trading in the underlying market is suspended or restricted; if the Client trades in denominated currencies other than Account Currency the Client may lose money or value of the investment due to exchange rate fluctuations and that these losses may be in addition to any losses on the value of the Underlying Reference Instrument relevant to the Transactions; gapping, whereby a market price falls or rises without the opportunity to trade, can result in significant losses even when a stop loss has been put on because it may not be possible to transact at the nominated price if the market has gapped; in some circumstances Underlying Reference Instruments may be halted, suspended from trading or have their quotation for trading withdrawn from an exchange and these factors might affect the value of your Transaction relating to those Underlying Reference Instruments due to Admiral exercising its discretion to determine the fair value of them; a market disruption may mean the Client is unable to trade when desired, and the Client may suffer a loss as a result, including examples of disruption include the “crash” of a computer based trading system, fire or other exchange emergency or a regulatory body could declare an undesirable situation has developed in a particular contract and suspend trading; and you may incur losses that are caused by matters outside our control for example, a regulatory authority exercising its powers during a market emergency may result in losses for the client or a regulatory authority can suspend trading (for example in an Underlying Reference Instrument) or alter the price at which a position is settled, which could also result in a loss to the client.