Risk Warning

1. About this risk warning

This Risk Warning describes the general nature of the risks of trading the products offered by Ellington Ltd — including forex, CFDs on stocks, indices, and commodities, and cryptocurrencies. It is provided on a fair and non-misleading basis, but it is not a complete list of every risk, and it does not explain how each risk applies to your personal circumstances.

You should read it together with our Terms and Conditions before you open an account or trade. If anything is unclear, please ask us, and consider seeking independent advice (see Section 15). Nothing in this warning, on our website, or on our platform is investment, legal, or tax advice.

2. Who these products may not suit

Leveraged products are speculative and are generally suitable only for people who understand how they work, who can monitor their positions actively, and who can afford to lose the money they put at risk. They are not appropriate for:

• money you cannot afford to lose, or that is borrowed, urgently needed, or required for living costs;
• retirement savings or funds you are relying on for the future;
• anyone seeking a safe, predictable, or guaranteed return; or
• anyone who does not have the time or knowledge to understand and follow their positions.

3. Leverage and margin

Leverage is the defining feature — and the central risk — of these products. To open a leveraged position, you put down only a fraction of its full value as margin. For example, at leverage of 30:1, a position would require margin of about 3.3% of its full value.

Because your exposure is to the full value of the position, a small movement in the market produces a much larger movement in your profit or loss relative to the funds you committed. This works in both directions: leverage can magnify gains, but it just as easily magnifies losses, and losses can build up very quickly — sometimes within minutes.

4. Losing more than you deposit

You can lose your entire deposit. In some circumstances — particularly in fast-moving or "gapping" markets — losses on leveraged positions can in principle exceed the funds in your account, leaving you owing money.

5. Margin calls and close-out

You must keep enough margin in your account to support your open positions at all times, and it is your responsibility to monitor this. If your funds fall below the required level, we may make a margin call asking you to deposit more. If the position is not brought back within margin, we may close it — possibly at a loss for which you are responsible, and possibly without further notice — to limit further losses. We may automatically close one or more of your open positions if your account equity falls to or below 50% of the margin required to maintain your open positions.

6. Costs reduce your returns

Trading is not free, and costs work against you. These can include the spread (the difference between the buy and sell price), commissions, and overnight financing charges on positions held from one day to the next. Costs accumulate, and frequent trading or positions held open for long periods can erode — or exceed — any gains. You should factor these costs into every decision.

7. Market volatility and gapping

Prices can be highly volatile and can move sharply against you, especially around economic news, at market opens, or in stressed conditions. Markets can also "gap" — jump from one price to another without trading at the levels in between — which means a position can be closed at a price materially worse than you expected. Cryptocurrencies in particular can move dramatically, at any hour, including when markets for other assets are closed.

8. Execution risk

The price at which your order is executed may differ from the price shown when you placed it — this is known as slippage — particularly in volatile or illiquid markets. A stop-loss order is not guaranteed: in a gapping market it may be filled at a worse price than the level you set, unless we expressly offer a guaranteed stop. Orders may be delayed, rejected, or, outside trading hours, unable to be changed. You should not assume that any risk-management order will fully protect you.

9. We act as your counterparty

For many of the products we offer, we may act as the counterparty to your trades rather than passing them to an external market. This means there is an inherent conflict of interest — your loss can be our gain — and we are not acting as your agent or adviser and are under no duty to seek the best possible outcome for you beyond our stated execution practices.

It also means you are exposed to counterparty risk: if the Company were to become insolvent, there is a risk to amounts owed to you. Client money and assets are held in accordance with our internal client-money procedures, which may include holding funds with banks, payment service providers, liquidity providers, custodians, or other third-party service providers. Your funds may be exposed to the financial or operational failure of those third parties. Unless expressly stated otherwise, your account is not covered by any deposit-guarantee scheme, investor-compensation scheme, or similar statutory protection. You should read Section 22 of our Terms and Conditions for the detail.

10. Cryptocurrency risks

Cryptocurrencies carry all of the above risks and several of their own. They are among the most speculative products available, and you should be prepared for the possibility of losing your entire investment.

• Extreme volatility and total loss. Crypto prices can swing violently and can fall to zero. Their value is not centrally backed; it rests on technology and on the continued willingness of others to trade them.
• Irreversibility. Once recorded on a blockchain, a transfer generally cannot be reversed, so losses from error, fraud, or theft may not be recoverable.
• Custody and security. Crypto holdings can be targeted by hacking, theft, or fraud. If private keys are lost or compromised, the assets may be permanently unrecoverable, and securing any keys in your control is your responsibility.
• Liquidity and delisting. Some crypto assets can become difficult or impossible to trade, and a particular asset or trading pair may be suspended or delisted, in some cases at short notice.
• Regulatory uncertainty. The law on crypto is still developing and varies by country. New rules — including restrictions on the use, sale, or possession of crypto — could limit or end your ability to trade or hold an asset, or affect its value.
• Market manipulation. Crypto markets can be subject to manipulation, such as "pump-and-dump" schemes, which can distort prices.
• Network and technology risk. Blockchain networks can suffer congestion, delays, forks, or failures that affect access and transactions.
• No compensation scheme. Crypto assets are generally not covered by deposit-guarantee or investor-compensation schemes.

By trading these products you accept that there may be additional risks not listed here, including risks not foreseeable at the time of writing.

11. Technology and operational risk

Online trading depends on technology that can fail. The platform, your device, or your internet connection may suffer interruptions or downtime, which could prevent you from opening, monitoring, or closing positions when you want to, and may cause losses or missed opportunities. Market data and prices may also be delayed or contain errors. You should have a plan for how to reach us if you cannot access the platform.

12. No advice and suitability

We provide execution-only services. We do not give investment, legal, or tax advice, do not assess your financial situation or objectives, and do not tell you whether a particular trade or product is suitable for you. Any educational material, commentary, or tools we provide are general information only. The responsibility for assessing the risks and deciding whether to trade — in light of your own circumstances and risk tolerance — is yours alone.

13. Past performance and no guarantee of profit

Past performance is not a reliable indicator of future results. We do not guarantee any profit, return, or protection from loss from trading or from any other activity connected with our Services. Any examples, simulations, or figures are illustrative only and should not be taken as a promise of what you will achieve.

14. Tax

Trading may have tax consequences that depend on your personal circumstances and the country where you live, and tax treatment can change. You are responsible for understanding and meeting your own tax obligations. We do not provide tax advice.

15. Seek independent advice

If you are in any doubt about the risks involved, or about whether these products are appropriate for you, you should seek advice from an independent and suitably qualified professional before you trade. The decision to use, or not to use, our Services is yours alone, and you trade at your own risk.

16. Contact and related documents

For questions about this Risk Warning, please contact us. For the full detail, please also read our other legal documents.