Risk Limitation



From May  22, 2017


Since the investment company CREDOS Ltd. with headquarters in Zagreb, Croatia, OIB: 21667415955 (hereinafter: CREDOS) as defined in the Agreement on the TRADES service and the General Conditions of Service Agreement TRADES provides investment services of reception and transmission of orders in relation to one or more financial instruments, and to trading outside the multilateral system (s) of organized trading in financial instruments (regulated market or multilateral trading platform), so-called. OTC (Over The Counter) transactions in respect of financial derivatives known as CFD (Contracts For Differences) and FX (Foreign Exchange Contracts) You as a client of CREDOS by concluding the Agreement on TRADES service acknowledge that you understand and accept this Statement of limitation risks listed general overview of the properties of financial instruments, the risk associated with financial instruments and warnings regarding the service TRADES. All here published risks for the CFD instruments apply to also to the FX instrument.

All customers and potential customers are specifically advised to carefully read the information on the risks and warnings contained in this document, before their request to CREDOS for opening a trading account and before the beginning of trading.

CREDOS notes that this document is a general overview of the characteristics of financial instruments and the risks associated with financial instruments and as such does not provide and does not explain all of the risks and other significant aspects relating to trading of financial instruments. According to the Capital Market Act and the Regulations on the rules of professional conduct when providing investment and auxiliary services, the purpose of this notice is to explain the specific features of financial instruments, as well as the risks associated with each of them in sufficiently detailed and understandable way to the client in order to make an informed decision about investing.

  1. Statements about the general risks

1.1. The client should not directly or indirectly engage in any investment in financial instruments without understanding the risks associated with each financial instrument.

1.2. In the service TRADES, CREDOS is not acting as an advisor nor does serve as a trustee of the client. Client accepts that any market recommendation and any information CREDOS offers do not constitute a personal recommendation in terms of the Capital Market Law, an offer to buy or sell or the solicitation of an offer to buy or sell, any guarantee that the purchase or sale of a specific financial instrument is suitable for the client and that such recommendation and information, although based on information coming from sources CREDOS believes to be reliable, may be based solely on a broker's opinion and that such information may be incomplete and may be unverified and unprovable. CREDOS makes no representations or warranties, nor will be responsible for the accuracy or completeness of any information or trading recommendation given to the client.

1.3. Therefore, the client should, before signing the service TRADES with CREDOS or an order, carefully consider whether investing in a particular financial instrument is appropriate for him, given his circumstances and financial resources.

1.4. If the client does not understand what those risks are, professional financial should be sought. If the client still does not understand the risks relating to the trading of any financial instruments no trading should be proceeded.

1.5. The client should understand high risk exposure and possibility to suffer a partial loss or total loss of their initial capital as a result of the purchase and / or sale of any financial instruments and accepts a willingness to take such risks.

1.6. The client should understand that the CFD instruments are very speculative and involve substantial risk of loss and are not suitable for all investors, but only for those customers who:

(A) understand and are willing to take the economic, legal and other risks that are involved;

(B) have the experience and knowledge of the derivatives trading and subject types of property; and

(C) cannot bear a financial loss of entire investment. CFD instruments are not suitable for pension funds. CFD transactions are among the most risky types of investments and can lead to large losses. The customer accepts, guarantees and confirms that understands these risks and is able to financially and otherwise take these risks when trading CFD instruments. Furthermore, the client accepts, guarantees and confirms that the loss of the entire account balance will not lead to a change in his lifestyle.

  1. General risks

2.1. The client is warned of the following general risks:

(A) CREDOS will not and cannot guarantee the outcome of any investment in financial instruments and therefore cannot guarantee the assets the client has invested in the trading account for trading purposes.

(B) The client agrees that in spite of all the information CREDOS offers, the value of investments in financial instruments may fluctuate downwards or upwards and it is even possible that the investment becomes worthless.

(C) Information on previous returns of a financial instrument does not guarantee its current and / or future returns. The use of historical data does not make a binding or safe forecast regarding appropriate future returns of financial instruments to which the said information refers.

(D) The client is warned that transactions with financial instruments offered in the service TRADES can be speculative in a short period of time can lead to large losses or even total loss of capital.

(E) Due to reduced demand some financial instruments may not become immediately liquid and client may not be in a position to sell them or easily obtain information on the value of those financial instruments or the scope of the associated risks.

(F) Derivative financial instruments (e.g., options, futures contract / futures, forward contract, swap, differences financing contract) may be spot transactions without the actual delivery of the object of the contract and related financial instrument, which provides the ability to profit on changes in foreign exchange rates, commodities, indices on the stock market or share prices that are called related or underlying instrument. The value of derivative financial instrument directly affects the price of the relevant instrument or related object of the contract.

(G) Third party stands for third entity or third party to which Credos d.o.o., Nemčićeva 7, Zagreb, transfers orders to buy and/or sell financial instruments which are traded in markets in which the Company is not a direct member. As the executor of the order, the Third party has the right to liquidate all open positions whenever minimum amount of funds fails to be maintained, which may lead to the closure of the client's CFD or FX a loss, and that loss only be liable client. List of third parties to which the Company transfers orders for the buy and/or sale financial instruments is listed in Order execution policy of investment company Credos Ltd.

  1. Risks associated with CFD transactions

3.1. The client may not buy derivative (e.g. The option, futures contract / futures, forward contract, swap, financing contract differences) unless is willing to take the risk of partial or complete loss of the invested funds, as well as any additional commissions and other expenses that may arise.

3.2. All clients who want to invest in contracts for difference (CFDs) are urged to read this part. CREDOS points out that the information in this document is not listed and do not explain all of the risks and other significant aspects relating to trading CFDs. Trading with CFDs is not suitable for many small investors. Therefore, the client should not directly or indirectly be involved in trading with CFDs unless is familiar and fully understands all risks relating to trading with CFDs and understands that it can partially or completely lose all the money and also bear the additional costs .

3.3. If the client does not understand the risks involved in trading CFDs, the client should not trade.

3.4. Client is warned of the following risks associated with CFD:

(A) CFDs are derivative financial instruments where their price is derived from the price of related undelying financial instrument or object of the contract to which the CFD concerns (for example, currency pairs, shares, metals, indices, etc.): The prices of derivative financial instruments and markets they are traded at,  may be very volatile, and rapidly fluctuate in a very wide range and may reflect unforeseeable events or changes in conditions, which can’t be influenced by client nor CREDOS. Under certain market conditions it may be impossible to execute the client's order at the targeted price, which can lead to loss of or failure to execute the order. Among other things, the price of CFD instruments are affected by supply and demand, governmental, agricultural, commerce and trade programs and policies, national and international political and economic events and the prevailing psychological characteristics of the relevant markets.

(B) Some CFDs may not become immediately liquid due to reduced demand for related instruments and the client will not be able to obtain information about their value or the extent of the associated risks.

(C) Trading CFDs is speculative and involves a high degree of risk. Especially because it is carried out using margin (which covers only a small percentage of the value of the assets traded), and even small changes in the price of underlying instruments CFDs may lead to significant or complete loss. Client should be aware that trading CFDs you can lose the investment that serves the purpose of collateral for opening and maintaining your trading positions.

(D) Accordingly, trading CFDs is appropriate only for persons who: (a) understand and are willing to assume the economic, legal and other risks involved in such transactions; and (b) are able to bear the financial losses of their initial investment funds and any additional funds transferred to the account of a CREDOS to maintain their positions.

(E) When engaging in trading CFDs, opening trading orders in relation to the price movements set by the Third party. Prices quoted by the Third party include spreads (the difference between buying and selling price), increase or decrease in the price of the Third party can get or expect to get if you cover transactions with you by way of trade in the interbank market or with another counterparty. Please note that the total impact of spreads may be significant in relation to the size of used leverage and you may find it difficult to make a profit on your trading. You should carefully consider the impact of spreads, increase or decrease in price on your ability to obtain profits from trading.

(F) Leverage is available when trading CFDs (ie. the means CREDOS is required to deposit when a position is opened in comparison to the total size of transactions that can be made) and means that small initial deposit can lead to large losses as well as gains. It also means that a relatively small shift in prices may lead to proportionately much larger movement in the size of any loss or profit which can work against you as well as for you.

The risks associated with long CFD positions, ie. for CFD buyers

If you are long in CFD that means you are buying a CFD thus speculating the market price of the underlying assets will rise between the time of purchase and sale.

As the owner of a long position in general will make a profit if the market price of the underlying assets grow while your long position CFD open. In contrast, you have a loss if the market price of the underlying assets falls while your long CFD position is open. Thus, your potential loss can be greater than the initial deposit. In addition, you may have a loss due to the closure of your position, if you do not have sufficient funds to cover open positions in your account.

The risks associated with short CFD positions, ie. for CFD sellers

If you are short in a CFD that means selling the CFD and making speculation that the market price of the underlying will fall between the time of purchase and sale. As the owner of a short position you will usually make a profit if the market price of the underlying assets falls while your short CFD position is open. In contrast, you will make loss if the market price of the underlying assets grow while your CFD short position is open. Thus, your potential loss can be greater than the initial deposit. In addition, you may have a loss due to the closure of your position, if you do not have sufficient funds to cover open positions in your account.

High financial leverage with a low amount of funds deposited in your account can lead to high losses

A large degree of 'leverage' is a particular feature of the CFD contract. The effect of leverage makes investment in CFD riskier than investing in the property. This stems from the system maržiranja applicable to the CFD, which generally involves a small deposit relative to the size of the transaction, so that a relatively small price movement of the underlying assets can have a disproportionately dramatic effect on your trade. This can have both advantages and disadvantages. A small price changes can lead to big profits, however, can lead to significant losses that can exceed the amount of investment. Until such losses can occur quickly.

The greater the leverage, the higher the risk. Therefore, the size of the leverage partially determines results of investments.

(G) You can lose all the funds deposited into the account CREDOS is holding client funds. Placing certain orders (e.g. "stop-loss" or "limit" orders) which is intended to limit losses to some extend may not always be effective because the market conditions or technological limitations may prevent the execution of such orders. Please also note that for all orders (including guaranteed "stop loss" orders) can suffer the loss (which your order should limit) in a short period of time. In other cases, the execution of "stop loss" order can be worse than anticipated prices and actual losses may be higher than expected.

(H) clients are obliged to cover all the losses that you have suffered as well as the other amounts to be paid under the terms and conditions for trading in CFDs. If you choose to include in the trading of CFDs, you must accept this degree of risk.

(I) Transactions CFDs have conditioned responsibility and the client should be aware of the implications of this, especially in connection with the minimum resources required to open individual accounts. Clients are required to deposit funds into your trading account to open a position. Amount committed by the customers will depend on the related instrument and object of the contract CFDs. Amounts committed (so-called, margin requirements) can be fixed or can be calculated according to the current price-related instruments.

(J) The client is responsible to monitor own account balance and may need to invest additional funds to maintain opened positions. If the funds in the account are not sufficient for the current position to remain open, client may be required to invest additional funds in the short term or reduce exposure. If the client fails to respond margin call within the required period of time, it can lead to the liquidation of positions at a loss, and the client will be liable for any consequential losses.

(K) In connection with the CFD transactions, the Third party will have the discretion to start closing positions when the margin reaches 100% and the discretionary right to automatically close all positions at market prices (according to the quotation of the relevant liquidity provider) and liquidate the client's account if the margin falls below 90%.

 (L) Transactions in CFD's are not executed on a recognized or specific regulated markets but are being executed through a system of trading as an OTC transaction, where enforcement is carried out by the Third party and accordingly, may expose the client to a higher risk of stock market transactions. While some over the counter markets are very liquid, transactions in OTC or non-transferable derivatives may involve greater risk than investing in the stock exchange derivatives because there is no regulated market on which the open positions can be closed. It may happen that it will not be possible to liquidate an existing position, to assess the value of the position derived from OTC or to assess risk exposure. CREDOS is not obliged to publish prices of supply and demand of the instrument, and when the prices are referred the client must be aware that the price is determined by a third party and as a result, it will be difficult to determine what a fair price is.

(M) clients can begin trading CFDs via the website www.trades.com for financial instruments that are quoted on the platform. CREDOS is not obligated to continue to offer such financial instruments. Prices of CFDs are formed on the basis of price-related instruments / markets and are coming from the relevant liquidity provider where the trading is implemented. CREDOS has no control over the underlying price movements, which can be volatile and unpredictable. These trends will affect the prices at liquidity providers, regardless of whether you open or close a position, and regardless of the price at which it can do.

(N) the Third party and / or CREDOS can have access to information not available publicly, can open trading positions at prices that are not available to clients, and may have interests different from yours. In accordance with the Rules of trading Third party (Best Execution Policy), and Third party as executor of orders and CREDOS do not assume any obligation to you a forward market or other information we possess, nor to change the position or refrain from our own trading.

(O) Some CFDs may not immediately become a liquid and as a consequence you may not be able to immediately sell or simply to get information about the values of the CFD or the extent of the associated risks.


4 Third party Risks

4.1. Client is warned of the following third parties risks, which are in force unless otherwise stated in the Agreement:

(A) CREDOS can forward the money that is received from a client to a third party (e.g. Liquidity provider) to hold it or to control it in order to execute the transaction through or with that person, or to fulfill the obligation of the client to provide collateral (e.g. ihe initial request for payment) regarding the transaction. CREDOS is not responsible for any acts or omissions of any third party to which may forward the money received from the client.

(B) The third party which will receive the money forwarded by CREDOS for settlement may have an omnibus account meaning the funds may not be separated between clients and third party. In the event of insolvency or other analogous procedure concerning the third party, CREDOS can only have an unsecured claim against the third party on behalf of the client and the client will be exposed to the risk that the funds deposited by CREDOS at the third party is not sufficient to cover claims from the customer claims related relevant account. CREDOS accepts no liability for consequential losses.

(C) CREDOS can hold client money on behalf of clients outside the EEA. The legal and regulatory framework applicable to such bank or person will be different from the one in Croatia and in case of insolvency or any other analogous proceedings in relation to that bank or person, the client money may be treated differently from the way you would treat that the money kept in a bank account in the Republic of Croatia. CREDOS shall not be liable for the insolvency, acts or omissions of any third party referred to in this paragraph.

(D) CREDOS can deposit the money the client with the depositary who may be entitled to insurance claims, lien or right of settlement (enforcement or otherwise) in connection with the money.

(E) the bank or broker through which CREDOS can operate may have interests contrary to the interests of the client.

(F) CREDOS is required to keep client’s funds in the account that is separated from its own funds, but this cannot provide complete protection in case of failure to fulfill contractual obligations of a third party where client’s funds are stored.


5 Fees and taxes

5.1 The customer is alerted to the following:

(A) services provided by CREDOS are subjected to certain cost / fees, which the client will be notified in an appropriate manner. CREDOS or Third party may at any time change their fees, so the client is responsible to monitor these changes.

(B) Before client begins to trade CREDOS's will provide the details of all charges / fees and commissions which will be the client's obligations. If any charges are not expressed in monetary terms (but, for example, as a percentage of contract value), the client should be sure to understand how high these fees might amount to. If the client does not understand calculation, a written explanation should be requested with appropriate examples to determine what that fee might represent in certain amounts of money.

(C) There is a risk that the client’s transactions with financial instruments may become subjected to taxes or other levies due, for example, changes in legislation or other personal circumstances.

(D) The contract or transactions undertaken under the Agreement may be subject to tax and / or any other benefits in certain jurisdictions and CREDOS does not guarantee that no such tax and / or provision will not be payable as such.

(E) client is responsible for all taxes and / or other taxes that may arise in relation to own transactions.


  1. Technical Risks

The customer is alerted to the following technical risks, other than those specified in the Agreement:

(A) The client, not CREDOS will be responsible for the risks of financial losses caused by the failure, interruption, malfunction, the malicious action of information or communication, electricity, electronic or other systems.

(B) If the client undertake transactions on an electronic system will be exposed to the risk associated with the system including the failure of hardware, software, servers, communication lines and broken Internet. The result of any such failure may be that his order has not been executed according to his instructions or not to be executed. CREDOS accepts no responsibility in the event of such failure.

(C) CREDOS is not responsible if an unauthorized third party gains access to client information, including e-mail addresses, electronic communication and personal data, data access when it is a result of the negligence of the client or when the above transfers between CREDOS client or any other party using the Internet or other devices for network communication, telephone or other electronic means or publication.

(D) The client understands that unencrypted information sent by e-mail are not protected from unauthorized access.

(E) At the time of the increased volume of transactions the client may have difficulty obtaining a telephone connection or system TRADES, particularly in volatile markets (for example, when the publication of key macroeconomic indicators).

(F) client understands that it may depend on events that could affect its access TRADES, including, but not limited to interruptions or block transmission, software and hardware failure, interruption of Internet connection, failure of public electricity grids or hacker attacks. Unless otherwise specified in the Agreement, CREDOS is not responsible for any damages or losses arising from such occurrences beyond its control or for any other loss, cost or liability (including, without limitation, loss or profit) that can be consequence of the inability to access client systems TRADES or delay or inability to send orders or transactions.

(G) The client is warned while trading on electronic platforms, assumes risk of financial loss which among other things can be caused by:

  • Failure of client’s devices, software and poor quality connections.
  • Malfunctions, errors or incorrect use of hardware or software provided by CREDOS's, the Third party or client.
  • Improper operation of the client’s equipment.
  • Incorrect terminal settings.
  • delayed updates of the client’s terminal.

(H) In connection with the use of computer equipment, data and network for voice communication, the client shall bear the following risks, among other risks, in which cases CREDOS will not be liable for consequential loss (unless otherwise specified in the contract):

  • Interrupted power supply to the customer's equipment or providers or operators of communication (including voice communications) serving the client.
  • Physical damage (or destroy) the communication channels that are used to connect the client and the provider (operator communication), providers and servers for trading or information server client.
  • Loss (unacceptably low quality) in communications via the channel used by the client or the channels used by the provider or operator of communications (including voice communication) used by the client.
  • wrong terminal settings or settings that do not meet the requirements.
  • untimely updating of the  client’s terminal.
  • The use of communications channels, hardware and software leads to a risk that the client does not receive messages (including text messages) from CREDOS.
  • failure or unavailability of trading systems (platforms) which also includes client’s terminal.
  • Loss (unacceptably low quality) in communications via channels used by CREDOS, especially physical damage (destruction) of communication channels by third parties.

7 Trading platform

7.1. CREDOS warns clients on the following important information related to the trading platforms:

(A) On-line trading, regardless of how much is appropriate and efficient, does not necessarily reduce the risks associated with currency trading.

(B) the client understands that when CREDOS receives and transfers order, it will not be canceled.

(C) In the event that the client has not received the result of the execution of the previously sent instructions, and decided to repeat the instruction, the customer accepts the risk that it will carry out two transactions instead of one.

(D) the client understands that if a pending order already made, the client sends an instruction to change its level, the only instructions to execute the instructions for changing the level of stop loss and / or take profits on positions that were open when activated a pending order.

7.2. it is one-click trading. Online trading system provides immediate transmission of client’s orders when the client enters the wanted amount and clicks "Buy / sell". This means that there is no possibility to analyze the account after clicking "Buy / Sell" and the orders afterwards cannot be canceled or changed. This characteristic may be different from other trading systems you have used. Before the actual online trading, the client should use the Demo Trading System to become familiar with the online trading system. Customer acknowledges and understands that the use of the said online trading system accepts one-click system and accepts the risk characteristics of the current transmission / execution.

8 Events of force majeure

8.1. In the case of events of force majeure CREDOS may not be able to perform reception and transmission of client orders or to fulfill its obligations under the contract with the client. As a result, the client can bear the financial loss and the client will accept the risk of such financial loss.

9 Insolvency

9.1. CREDOS insolvency or failure to fulfill contractual obligations may lead to a liquidation of positions or closing without the consent of the client. In the event of insolvency of the client can bear the costs. Please refer to the Investor Protection Fund on the CREDOS's website for more details.

10 Foreign exchange risk

10.1. When the financial instruments is traded in the currency other than the domestic currency of the client, any change in the exchange rate can have a negative effect on the value, price and performance, and may result in losses for the client.

10.2. Fluctuations in exchange rates may also affect the financial instrument with the currency as an instrument related to the possibility of profit or loss from transactions on foreign exchange markets. Client is advised to pay special attention to the currencies that are traded infrequently or rarely. Some transactions may be difficult to execute at certain price, due to lack of counterparties.

11 Abnormal market conditions

11.1. The client understands that under abnormal market conditions, the period during which orders are executed may be extended or it may become impossible to execute orders at the price or might not perform.

11.2. There may be situations, trends and / or conditions that occur during the weekend, the beginning of the week or in the days following the release of significant macroeconomic figures, economic or political news for which the currency markets can be opened with the price level that can be significantly different from the previous price. In this case, there is a significant risk that the orders issued to protect open positions and open new positions can be made at prices that are significantly different from those provided.

For the final investment decision we advise you to read Warnings and Risk Disclosures of the Third party available on there website.

These Disclaimer on risk limitation shall enter into force on May 22, 2017.