Risk Disclosures

RISK DISCLOSURES

These Risk Disclosures are supplemental to any platform trading agreement, terms of business, or other documentation you may have with Collybus Pte Ltd (“Collybus” “we” “us” “our”). We reserve the right to update or amend these disclosures at any time. Trading in financial instruments carries significant risk and may result in substantial financial losses. Margin trading is highly speculative and may involve an extreme degree of risk, including losses in excess of your collateral. You are solely responsible for making independent decisions regarding our services and should seek independent financial and/or legal advice as needed. Our services are available exclusively to Accredited and Institutional Investors as defined under Section 4A of the Securities and Futures Act (SFA), Singapore. By accessing our services, you confirm that you meet the eligibility criteria and understand the associated risks. You must fully assess the risks associated with trading financial instruments, including their terms, features, and underlying arrangements. Consider whether such trading aligns with your experience, financial resources, risk appetite, and investment objectives.

General Trading Risks

Financial markets are subject to market volatility, liquidity constraints, leverage, regulatory changes, macroeconomic conditions, and geopolitical events. Certain instruments may be highly speculative, illiquid, or complex, potentially exposing investors to risks such as margin calls, forced liquidations, funding rate fluctuations, and counterparty default. These Risk Disclosures are not exhaustive and do not encompass all risks associated with the instruments, transactions, or services we offer. We accept no liability for any direct or indirect losses, including loss of profits, business, or opportunities arising from the use or reliance on this information. We strongly advise you to carefully read and understand these Risk Disclosures before using our services.

Derivatives Risks

Derivatives are financial instruments whose value is derived from an underlying asset, such as equities, bonds, commodities, or index (such as equity index or interest rate). Common types include futures, options, swaps, and forwards. Trading derivatives involves significant risks, including but not limited to:

Counterparty Risk: OTC derivatives are not cleared through exchanges, exposing investors to counterparty default risk. The failure of a counterparty may result in the loss of unrealized gains and force liquidation at unfavourable market prices.

Credit Risk: Disposing of or closing an uncleared derivative may require counterparty consent, and offsetting positions may not always be available. Non-centrally cleared derivatives carry the risk of counterparty payment default.

Leverage Risk: Derivatives utilize leverage (using borrowed funds), amplifying both gains and losses. Small adverse price movements can lead to substantial losses, potentially exceeding initial deposits or margin requirements.

Liquidity Risk: OTC derivatives may lack liquidity, making it difficult to enter or exit positions at desired prices. Reduced market depth can impact pricing, execution, and risk management potentially resulting in significant financial losses.

Early Termination Restrictions: Some OTC contracts impose restrictions or penalties on early termination. This can limit your ability to adjust trading strategies in response to changing market conditions.

Currency Risks

Investing in financial instruments denominated in a currency other than your base currency involves currency risk. Exchange rate fluctuations may increase losses or reduce profits when converted back to your base currency. Currency trading is volatile, highly leveraged, and may be illiquid. Prices are influenced by supply and demand, government policies, political and economic events, and interest rate changes. Governments may intervene in currency markets, affecting price movements. Market liquidity is not guaranteed. In volatile conditions, it may not always be possible to exit positions to limit losses or realize gains. Banks and dealers are not obligated to provide continuous pricing, and bid/offer spreads may widen significantly, increasing the risk that losses cannot be controlled.

Digital Assets, Cryptocurrency, Perpetual Futures Risks

Trading digital assets and cryptocurrencies, involves significant risk due to high volatility and rapidly changing market conditions. Cryptocurrency perpetual futures introduce additional risks, such as leverage and funding rate fluctuations. Some of the key risks associated with these financial products include:

Cybersecurity & Operational Risk: Digital assets are vulnerable to hacking, fraud, cyberattacks, and technological failures, potentially resulting in asset loss or trading disruptions.

Lack of Consumer Protection: Unlike traditional financial instruments digital assets and cryptocurrencies are decentralized and not backed by governments or central banks, offering no deposit insurance or investor recourse. Pursuant to current relevant regulations, digital assets and any associated activities within Singapore do not fall within the scope of the Financial Industry Disputes Resolution Centre (FIDReC) and will not benefit from the Deposit Insurance Scheme (DIS).

Leverage Risk: Perpetual futures often involve leverage (using borrowed funds), amplifying both gains and losses. Small price movements in the underlying cryptocurrency can a substantial loss of margin, and traders may be required to add additional funds or risk liquidation.

Funding Rate Risk: Contracts in perpetual futures do not have an expiry date but require periodic funding payments between long and short position holders. Periodic funding payments between position holders affect profitability. The funding rate and liquidation mechanisms for perpetual futures are based on an index price derived from multiple exchanges. Index price discrepancies may cause premature liquidations.

Technology Risks: The features, functionality, characteristics and operation of digital assets and the associated software, networks, protocols and technology used may be complex difficult to understand and evaluate.

Liquidation Risk: Liquidation of positions can occur if a trader's margin balance falls below the maintenance margin requirement. Market volatility can trigger automatic liquidations, leading to total loss of margin. Cryptocurrency markets operate 24/7, increasing exposure to sudden price swings.

Market Manipulation & Disruptions: Cryptocurrency derivatives markets are susceptible to price manipulation, flash crashes and liquidity gaps.

Exchange Risk: Cryptocurrency exchanges may lack regulatory oversight, posing risks of security breaches, downtime, network connectivity disruption or withdrawal restrictions.

Regulatory Risk: The regulatory landscape for digital assets is evolving rapidly and subject to change. Cryptocurrency derivatives may be restricted or banned in certain jurisdictions. Traders are responsible for ensuring compliance with local laws and regulations before engaging in perpetual futures trading.