Product Disclosure Statement
This Product Disclosure Statement (PDS) is issued by TopWealth Trading, a company registered in the Republic of Vanuatu and regulated by the Vanuatu Financial Services Commission (VFSC) under licence number 8031. This document provides important information about Contracts for Difference (CFDs) to help you decide whether this product is appropriate for you. You should read this PDS carefully before making a decision to trade with us.
What Are CFDs?
A Contract for Difference (CFD) is a derivative financial instrument that allows you to speculate on the price movement of an underlying asset without owning the asset itself. When you trade a CFD, you enter into a contract with TopWealth Trading to exchange the difference in the price of the underlying asset between the time the contract is opened and the time it is closed.
CFDs are available on a range of underlying assets including foreign exchange (forex) currency pairs, precious metals, commodities, equity indices, individual shares, energies, and cryptocurrencies. CFDs are traded on margin, meaning you only need to deposit a fraction of the full value of the position to open a trade.
Key Features of CFDs
CFDs allow you to go long (buy) if you believe the price of an asset will rise, or go short (sell) if you believe the price will fall. Profits or losses are determined by the difference between your entry price and exit price, multiplied by the number of contracts traded. CFDs do not have a fixed expiry date and remain open until you choose to close the position or a stop-loss/take-profit order is triggered.
Key features include: leveraged trading with margin requirements as low as 0.2% (up to 500:1 leverage); access to global markets from a single trading account; the ability to trade both rising and falling markets; real-time pricing with tight spreads; and execution via the MetaTrader 4 (MT4) platform.
Fee Structure
TopWealth Trading charges the following fees and costs in connection with CFD trading:
Spreads: The primary cost of trading is the spread, which is the difference between the bid (sell) price and the ask (buy) price. Spreads vary by instrument and market conditions. Our forex spreads start from 0.0 pips on our ECN account type.
Commissions: Depending on your account type, a per-lot commission may apply. Standard accounts have zero commission with wider spreads, while ECN accounts charge a commission per lot traded with tighter raw spreads.
Overnight Financing (Swap): Positions held overnight are subject to a swap charge or credit, calculated based on the interest rate differential of the currencies in the pair or the financing cost of the underlying asset. Swap rates are published on our website and updated regularly.
Margin Requirements and Leverage
CFDs are leveraged products, meaning you can control a large position with a relatively small deposit known as margin. TopWealth Trading offers leverage of up to 500:1 on select forex pairs, subject to the instrument traded and your account type. Higher leverage amplifies both potential profits and potential losses.
The margin requirement is the minimum amount of funds you must have in your account to open and maintain a position. If your account equity falls below the required maintenance margin level, you will receive a margin call and may be required to deposit additional funds. If you fail to meet the margin call, TopWealth Trading reserves the right to close some or all of your open positions to bring your account back to the required margin level.
Risks of Trading CFDs
Trading CFDs carries a high level of risk and may not be suitable for all investors. You should carefully consider whether trading CFDs is appropriate for you in light of your financial situation, investment objectives, and level of experience. The key risks include:
Leveraged Loss Risk: Because CFDs are traded on margin, losses can exceed your initial deposit. A small adverse price movement can result in substantial losses relative to your margin. You may lose more than you invest.
Margin Call Risk: If the market moves against your position, you may be required to deposit additional funds at short notice. Failure to meet a margin call may result in your positions being liquidated at a loss.
Gap Risk: Market prices can gap, meaning they move sharply from one price level to another without trading at prices in between. This can occur during periods of high volatility or when markets reopen after a weekend or holiday. Stop-loss orders may not be filled at the requested price in gapping markets.
Liquidity Risk: In certain market conditions, it may be difficult or impossible to close a position or obtain a fair price. This may occur during periods of extreme volatility, low liquidity, or when trading in less liquid instruments.
Counterparty Risk: When you trade CFDs with TopWealth Trading, you are entering into a contract with us as your counterparty. Your ability to close positions and recover funds depends on our financial stability and ability to meet our obligations.
Client Money Handling
TopWealth Trading holds client funds in segregated bank accounts, separate from the company's own operating funds. This means your funds are not used for our business purposes and are held in trust for you. Segregated accounts are maintained with reputable banking institutions. In the event of the company's insolvency, segregated client funds are protected from the claims of the company's creditors to the extent permitted by applicable law.
Cooling-Off Period
There is no cooling-off period for CFD trading. Once a trade is executed, it cannot be reversed. You may close an open position at any time during market hours, but you will be subject to the prevailing market price at the time of closing. If you wish to close your trading account entirely, you may do so by contacting our support team. Any remaining balance will be returned to you via your original payment method, subject to our withdrawal procedures.
How to Close Your Account
You may request to close your account at any time by contacting our support team at support@topwealthtrading.com. Before your account can be closed, all open positions must be closed and any outstanding obligations settled. Once your account is closed, any remaining funds will be withdrawn to your nominated bank account or original payment method.
Contact Us
If you have any questions about this Product Disclosure Statement or our products and services, please contact us at support@topwealthtrading.com.