Euro Pacific Bank

Disclosure of Risks of Margin Trading

Euro Pacific Securities (“EPS”) is furnishing this document to you to provide some basic facts about purchasing securities, forex, futures and other investment products on margin, and to alert you to the risks involved with trading in a margin account. “Margin trading” can mean engaging in a transaction in which securities are purchased partially through a margin loan extended to you by EPS (for the MetaTrader 4 platform), or Interactive Brokers (“IB”)1 (for the Euro Pacific Trader platform), for which the securities act as collateral. Margin trading can also mean trading investment products such as futures or options in which an initial “margin” deposit is made to secure your obligations and further margin may be required to secure your obligations as the value of your positions changes.

Before trading stocks, futures or other investment products in a margin account, you should carefully review the margin agreement provided by EPS and you should consult EPS regarding any questions or concerns you may have with your margin accounts.

When you purchase securities, you may pay for the securities in full or you may borrow part of the purchase price from EPS, or IB. If you choose to borrow funds from EPS, or IB, you will open a margin account with the firm. The securities purchased are EPS’s or IB’s collateral for the loan to you. If the securities or futures contracts in your account decline in value, so does the value of the collateral supporting your loan, and, as a result, EPS, or IB can take action, such as sell securities or other assets in any of your accounts held with EPS or issue a margin call, in order to maintain the required equity in the account.

You should understand that pursuant to the EPS Margin Agreement, EPS, or IB generally will not issue margin calls, that EPS, or IB will not credit your account to meet intraday margin deficiencies, and that EPS, or IB generally will liquidate positions in your account in order to satisfy margin requirements without prior notice to you and without an opportunity for you to choose the positions to be liquidated or the timing or order of liquidation.

In addition, it is important that you fully understand the risks involved in trading securities or futures contracts on margin. These risks include the following:

  • You can lose more funds than you deposit in the margin A decline in the value of securities or futures contracts that are purchased on margin may require you to provide additional funds to EPS or you must put up margin to avoid the forced sale of those securities or futures contracts or other assets in your account(s).
  • EPS, or IB can force the sale of securities or other assets in your account(s). If the equity in your account falls below the maintenance margin requirements, or if EPS, or IB has higher “house” requirements, EPS, or IB can sell the securities or futures contracts or other assets in any of your accounts held at the firm to cover the margin deficiency. You also will be responsible for any shortfall in the account after such a sale.
  • EPS, or IB can sell your securities or other assets without contacting Some investors mistakenly believe that a firm must contact them for a margin call to be valid, and that the firm cannot liquidate securities or other assets in their accounts to meet the call unless the firm has contacted them first. This is not the case. As noted above, EPS, or IB generally will not issue margin calls and can immediately sell your securities or futures contracts without notice to you in the event that your account has insufficient margin.
  • You are not entitled to choose which securities or futures contracts or other assets in your account(s) are liquidated or sold to meet a margin EPS, or IB has the right to decide which positions to sell in order to protect its interests.
  • EPS, or IB can increase its “house” maintenance margin requirements at any time and is not required to provide you with advance written notice. These changes in firm policy often take effect immediately. Your failure to maintain adequate margin in the event of an increased margin rate generally will cause EPS, or IB to liquidate or sell securities or futures contracts in your account(s).
  • If EPS, or IB chooses to issue a margin call rather than immediately liquidating undermargined positions, you are not entitled to an extension of time on the margin call.

1Euro Pacific Trader is offered by Euro Pacific Securities Inc. (“Euro Pacific Securities”), as an Introducing Broker to Interactive Brokers LLC. Interactive Brokers LLC is the custodian, technology provider, and clearing broker to all transactions executed through Euro Pacific Trader and thus the rates, conditions, and examples shown on this site may be subject to change and differ from what is displayed on Euro Pacific Trader. The rates, conditions, and examples on this site are provided on a best-efforts basis and should not be taken as final.

Euro Pacific Securities will not be held responsible for pricing and conditional discrepancies that may arise in the normal course of offering Euro Pacific Trader. Customers should always review and rely on the conditions that are shown directly on Euro Pacific Trader, and it is the responsibility of all customers to carefully review the conditions of every action before approving execution on Euro Pacific Trader.

Interactive Brokers LLC is a registered Broker-Dealer, Futures Commission Merchant and Forex Dealer Member, regulated by the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), and is a member of the Financial Industry Regulatory Authority (FINRA) and several other self-regulatory organizations. Interactive Brokers LLC does not endorse or recommend any introducing brokers, third-party financial advisors or hedge funds, including Euro Pacific Securities. Interactive Brokers LLC provides execution and clearing services to customers. None of the information contained herein constitutes a recommendation, offer, or solicitation of an offer by Interactive Brokers LLC to buy, sell or hold any security, financial product or instrument or to engage in any specific investment strategy. Interactive Brokers LLC makes no representation, and assumes no liability to the accuracy or completeness of the information provided on this website.
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