NWT Financial Group, Inc.
10008 N. Dale Mabry Highway Ste. 204
Tampa, FL 33618 Phone: (866) 872-3350
Risks
Involved with Actively Trading Your Account
NASD Rule 2361
Rule
2361. Day-Trading Risk Disclosure Statement
(a) Except as provided in paragraph (b), no member that is promoting a
day-trading strategy, directly or indirectly, shall open an account for or
on behalf of a non-institutional customer unless, prior to opening the
account, the member has furnished to each customer, individually, in writing
or electronically, the following disclosure statement:
You
should consider the following points before engaging in a day-trading
strategy. For purposes of this notice, a "day-trading strategy" means an
overall trading strategy characterized by the regular transmission by a
customer of intra-day orders to effect both purchase and sale transactions
in the same security or securities.
Day
trading can be extremely risky. Day trading generally is not appropriate for
someone of limited resources and limited investment or trading experience
and low risk tolerance. You should be prepared to lose all of the funds that
you use for day trading. In particular, you should not fund day-trading
activities with retirement savings, student loans, second mortgages,
emergency funds, funds set aside for purposes such as education or home
ownership, or funds required to meet your living expenses. Further, certain
evidence indicates that an investment of less than $50,000 will
significantly impair the ability of a day trader to make a profit. Of
course, an investment of $50,000 or more will in no way guarantee success.
Be cautious of claims of large profits from day trading. You should be wary
of advertisements or other statements that emphasize the potential for large
profits in day trading. Day trading can also lead to large and immediate
financial losses.
Day trading requires knowledge of securities markets. Day trading requires
in-depth knowledge of the securities markets and trading techniques and
strategies. In attempting to profit through day trading, you must compete
with professional, licensed traders employed by securities firms. You should
have appropriate experience before engaging in day trading.
Day trading requires knowledge of a firm's operations. You should be
familiar with a securities firm's business practices, including the
operation of the firm's order execution systems and procedures. Under
certain market conditions, you may find it difficult or impossible to
liquidate a position quickly at a reasonable price. This can occur, for
example, when the market for a stock suddenly drops, or if trading is halted
due to recent news events or unusual trading activity. The more volatile a
stock is, the greater the likelihood that problems may be encountered in
executing a transaction. In addition to normal market risks, you may
experience losses due to system failures.
Day trading will generate substantial commissions, even if the per trade
cost is low. [Day trading may result in your paying large commissions.] Day
trading involves [may require you to trade your account] aggressive[ly]
trading, and generally you will [may] pay commissions on each trade. The
total daily commissions that you pay on your trades will [may] add to your
losses or significantly reduce your earnings. For instance, assuming that a
trade cost $16 and an average of 29 transactions are conducted per day, an
investor would need to generate an annual profit of $111,360 just to cover
commission expenses.
Day trading on margin or short selling may result in losses beyond your
initial investment. When you day trade with funds borrowed from a firm or
someone else, you can lose more than the funds you originally placed at
risk. A decline in the value of the securities that are purchased may
require you to provide additional funds to the firm to avoid the forced sale
of those securities or other securities in your account. Short selling as
part of your day-trading strategy also may lead to extraordinary losses,
because you may have to purchase a stock at a very high price in order to
cover a short position.
Potential Registration Requirements. Persons providing investment advice for
others or managing the securities accounts for others may need to register
as either an "Investment Advisor" under the Investment Advisors Act of 1940
or as a "Broker" or "Dealer" under the Securities Exchange Act of 1934. Such
activities may also trigger state registration requirements.
(b) In lieu of providing the disclosure statement specified in paragraph
(a), a member that is promoting a day-trading strategy may provide to the
customer, individually, in writing or electronically, prior to opening the
account, an alternative disclosure statement, provided that:
(1)
The alternative disclosure statement shall be substantially similar to the
disclosure statement specified in paragraph (a); and
(2) The alternative disclosure statement shall be filed with the
Association's Advertising Department (Department) for review at least 10
days prior to use (or such shorter period as the Department may allow in
particular circumstances) for approval and, if changes are recommended by
the Association, shall be withheld from use until any changes specified by
the Association have been made or, if expressly disapproved, until the
alternative disclosure statement has been re-filed for, and has received,
Association approval. The member must provide with each filing the
anticipated date of first use.
(c) For purposes of this rule, the term "day-trading strategy" shall have
the meaning provided in Rule 2360(e).
(d)
For purposes of this Rule, the term "non-institutional customer" means a
customer that does not qualify as an "institutional account" under Rule
3110(c)(4).
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Note:
All OFF SHORE accounts shall include a current
unexpired photo on a government-issued identification,
such as a drivers license, passport, military
identification, or other government identification
with a photograph of the customer opening the account.
NWT Financial Group is
not
currently registered to do business in the following
states: AK, DC, DE, HI, IA, ID, KS, KY, MI, MN, MO,
MS, MT, NE, NH, NM, OR, SD, WV, WY.
*
System delays and market volatility can cause losses
to your account. We are not responsible for market
volatility and delays. Traders need to be aware that
the cumulative commissions resulting from actively
trading your account may have a substantial negative
impact on one's investments. Please view
NASD Rule 2361
regarding the risks associated with actively trading
your account before you make any investment decisions. |
