This statement provides you with information about the risks associated with investment products, which you may invest in through services provided to you by Overbit. This statement does not explain all of the risks involved in investment products or how such risks relate to your personal circumstances.
The services offered by Overbit involve complex, highly leveraged, and high-risk derivatives trading. Such trading is only suitable for professional individuals, professional institutions or individuals with a vast amount of experience in investments and trading and fully understand all the risks of trading cryptocurrency derivatives and forex derivatives and are able to withstand total investment losses and/ or account liquidations.
Traders should read this statement carefully and in full and beware of the risks involved in trading cryptocurrency and forex derivatives. Traders should decide for themselves whether or not to participate in such trading based on their investment appetite, experience, financial status and ability to withstand the risks involved. If you are in any doubt about the risks involved with your trading account, you should seek professional advice. When you trade on Overbit, you confirm that you have read and understood this statement.
1. Trading risk
Even though the characteristics of your trading contract will vary from those of the underlying instrument or market, it is important that you understand the risks associated with trading in the relevant underlying market because fluctuations in the price of the underlying market will affect your instruments and the profitability of your trades. Margin trading is a financial product that allows you to speculate on price movements in underlying markets and although the prices at which you trade these products are offered by us, our prices are derived from the underlying market.
Our services are provided on an execution only basis. We do not provide investment advice in relation to trading. We sometimes provide factual information or research recommendations about a market, information about transaction procedures and information about the potential risks involved and how those risks may be minimised. However, any decision to use our products or services is made by you.
2. Price volatility risk
Movements in the price of underlying markets can be volatile. This will have a direct impact on your profits and losses. Knowing the volatility of an underlying market will help guide you as to where any stops should be placed. It should be noted that volatility can be unexpected and unpredictable.
3. Leverage risk
Before you are allowed to enter into a trading position with Overbit, you will generally be required to deposit Bitcoin or USDT with us – this is called the margin requirement. This margin requirement will usually be a proportion of the overall contract value, for example 5% of the total contract value. This means that you will be using leverage and this can work for or against you; a small price movement in your favour can result in a high return on the margin requirement placed for the contract, but a small price movement against you may result in substantial losses.
Therefore, if our price moves against you, you may need to provide us with significant additional funds immediately to meet your margin requirement and maintain your open positions. If you do not do this, we will be entitled to close one or more or all of your positions. You will be responsible for any losses incurred as a result.
The need to monitor your positions is of greater importance when you have entered into contracts with us because of the effect of leverage. This magnifies the rate at which profits or losses can be incurred and, as a result, it is important that you monitor your positions closely.
4. Accuracy of information risk
While Overbit strives to keep all the information offered as up to date and accurate as possible, there may be circumstances where information is out of date or incomplete or not yet updated or translated.
5. Liquidity risk
Our prices come from other exchanges and our liquidity providers. Market conditions can change significantly in a very short period of time, so that if you wish to sell an instrument or close a contract, you may not be able to do so under the same terms as when you purchased or opened it. Under certain trading conditions it may be difficult or impossible to liquidate a position. This may occur, for example, at times of rapid price movement if the price rises or falls in one trading session to such an extent that under the rules of the relevant exchange trading is suspended or restricted.
6. Deposit and withdrawal risk
You should be aware of the deposit address provided to you by Overbit. Ensure that the address has not been passed to you by a third party and that it is copied fully and correctly to the software or device you use to transfer cryptocurrency from.
Similarly, when making a withdrawal, Overbit cannot verify that the address you have provided is owned by you. Once a withdrawal is processed, Overbit is not responsible for the whereabouts of the funds. If you are unable to access your funds after making a withdrawal this is beyond our control.
It is your responsibility to ensure that you use the correct address for any deposit, withdrawal, or transfer, and that the address you use is a valid Bitcoin or USDT address. Any inaccuracy in a specified address, or in the cryptocurrency (or other digital token or asset) that you attempt to transfer between addresses, may result in total loss of the cryptocurrency (or token or asset) concerned.
Deposits, transfers, and/or withdrawals may not be credited or may be delayed if there are delays, high demand, or technological issues affecting the Bitcoin network. If our transaction screening has flagged that you are potentially engaged in any suspicious activity or a breach of our Terms and Conditions, we reserve the right to investigate such suspicious activity. You may be at risk of loss if a deposit is not credited to your account and you are unable to manage the risk of a position or open order.
7. Regulatory risk
Cryptocurrency regulation is rapidly evolving and there is a risk that a change in laws and regulations will materially impact an instrument tradeable on Overbit. A change in laws or regulations made by a government or a regulatory body can reduce the attractiveness of an investment and/or change the competitive landscape and as such alter the profit potential of an investment. This risk is unpredictable and may vary from market to market. In the cryptocurrency markets such risk may be higher than in Forex markets. For example in the cryptocurrency markets the inadequacy or absence of regulatory measures can give rise to an increased danger of market manipulation, insider trading or the absence of financial market supervision can affect the enforceability of legal rights.
You are responsible for managing your tax and legal affairs including making any regulatory filings and payments and complying with applicable laws and regulations. We do not provide any regulatory, tax or legal advice. If you are in any doubt as to the tax treatment or liabilities of derivatives trading products available through your Overbit account, you should seek independent advice.
8. Contract suspension risk
Overbit may decide at its discretion to suspend a contract from the platform. If you have an open contract at the time of a delisting event, your contract may be forcibly closed or placed in a “closing-only” state which means you can only close it but not be able to open a new contract or opposing contract.
9. Cybersecurity risk
We offer you the opportunity to deal and communicate with us via electronic means, for example via our trading platform and via live chat and email. Although electronic communication is often a reliable way to communicate, no electronic communication is entirely reliable or always available. You should be aware that electronic communications can fail, can be delayed, may not be secure and/or may not reach the intended destination.
10. Downtime and maintenance risk
Overbit may from time to time carry out planned or emergency maintenance to the trading platform. This may result in you not being able to access your account, your funds or be able to open or close a position or execute an existing order.