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Trading Policies
1.0. YOUR RESPONSIBILITY. You must read and understand this document before effecting transactions. These Hotspot FXr Trading Policies are an Annex to and an integral part of your Customer Agreement. It is your responsibility as a Customer of Hotspot FXr to carefully read these Hotspot FXr Trading Policies and to inform Hotspot FXr of any questions or objections which you may have regarding them before entering each and every trade Order. In entering your trading Orders with Hotspot FXr, you agree, represent, warrant and certify that you understand and accept these Trading Policies, as they are set forth herein and as may be amended from time to time by Hotspot FXr, in its sole discretion.
back to top 2.0. COMMON TRADING TERMS. As set forth in these Hotspot FXr Trading Policies, the following terms have the following meanings:
2.1. Balance: The actual amount of United States ("U.S.") Dollars in a Customer Account, plus the theoretical marked-to-market value of any Open Positions in the Account.
2.2. Business Day: Any day on which commercial banks are open for business (other than a Saturday or Sunday) in the principal financial center of the country in whose currency a position is taken.
2.3 Customer: Any customer of the Hotspot FXr network.
2.4. Closed Positions: Exposures in Foreign Currencies which have been extinguished by expiration, settlement or offset (e.g. Long Positions which have been fully offset by a corresponding Short Position in the same Foreign Currency and for the same Value Date).
2.5. Cross Currency Pairs: Two Foreign Currencies, the relationship between which is the subject of a Foreign Exchange transaction in which one Foreign Currency is purchased from (or sold to) a counterparty against delivery (receipt) of a second Foreign Currency. Examples of popular Cross Currency Pairs include EUR/JPY (Euro against Japanese Yen) and EUR/GBP (Euro against British Pound Sterling).
2.6. Daily Cut-off: The point in time selected each Business Day by Hotspot FXr which shall signify the end of that Business Day. The Trade Date of any contract entered into after the Daily Cut-off shall be considered the next Business Day. The Daily Cut-off will occur at a time selected solely by Hotspot FXr and may vary from day to day.
2.7. Day-Only Order: An Order which cancels automatically at or before the close of the Business Day, unless previously Filled or canceled.
2.8. Fill: A deal executed on behalf of a Customer's Account pursuant to an Order. Once Filled, an Order cannot be canceled, amended or waived by the Customer.
2.9. Foreign Currency: The legal tender issued by and acceptable for the payment of obligations under the laws of one or more countries, other than the U.S.
2.10. GTC (Good Till Canceled) Order: An Order (other than a Market Order) that is effective unless and until Filled or canceled. GTC orders do not automatically cancel at the end of the Business Day.
2.11. Limit Entry Order: An Order to establish an Open Position by selling or buying at a specified Spot Rate level. Although a Spot Rate level is specified upon entry of a Limit Entry Order, Customers should note that market conditions may often prevent the execution of an individual Customer's Limit Entry Order despite other dealing activity at that price level and/or may require such Order to be Filled at a substantially different Spot Rate.
2.12. Margin: The minimum account Balance necessary, at the sole discretion of Hotspot FXr, to establish a new Open Position ("Opening Margin") or maintain an existing Open Position ("Maintenance Margin").
2.13. Margin Call: The demand by Hotspot FXr for the immediate remittance of additional money from the Customer to restore the account Balance to a level equal to or greater than the amount then required to maintain an Open Position.
2.14. Market Order: An order to sell or buy Foreign Currency (or options) "at market" - i.e., immediately and at the next Spot Rate available for Customer dealing. No Spot Rate is specified when entering a Market Order.
2.15. Marking to Market: The process of recalculating the theoretical profit or loss of Open Positions in a Foreign Currency trading Account assuming all Open Positions were liquidated at current market rates. Customer Accounts must be marked to market at a specified time and Spot Rate in order to estimate and report the Balance in U.S. Dollars.
2.16. Open Positions: Exposures in Foreign Currencies (and/or options) which have not been extinguished by expiration, settlement or offset, resulting normally either from a purchase ("Long Position") or a sale ("Short Position").
2.17. Order: Generally, an instruction by the Customer (or the Customer's authorized agent) to Hotspot FXr to attempt to execute a trade for the Customer's Account.
2.18. P/L (Profit / Loss): The actual gain or loss in U.S. Dollars resulting from trading activities on Closed Positions, plus the theoretical gain or loss on Open Positions that have been Marked to Market.
2.19. Point ("Pip"): The smallest unit of price for any Foreign Currency (e.g. for USD/CHF one point (or pip) equals .0001 Swiss Francs and for USD/JPY one point (or pip) equals .01 Japanese Yen.)
2.20. Spot Rate: The rate of exchange between two (2) Foreign Currencies for "Spot" value (normally settlement in two Business days), generally quoted either in "U.S. Terms" (price of one unit of Foreign Currency expressed in U.S. Dollars and Cents) or in "European Terms" (price of one U.S. Dollar expressed in units and decimals of the Foreign Currency). Spot Rates change rapidly. Customers should note that published rates represent rates for deals between large commercial bank participants in the interbank market and may vary from Spot Rates available for dealing to Hotspot FXr customers.
2.21. Stop Loss Order: An Order to sell or buy a currency pair at a specified Spot Rate for the purpose of liquidating an Open Position during market conditions in which the Open Position has declined in value. Although a Spot Rate is specified upon entry of Stop Loss Orders, market conditions may often require such Orders to be Filled at a substantially different Spot Rate, and Customer agrees to accept the best rate which Hotspot FXr, in its discretion, may assign to the Fill.
2.22. Take-Profit Order: An Order to sell or buy a currency pair at a specified Spot Rate for the purpose of liquidating an Open Position during market conditions in which the Open Position has increased in value. Although a Spot Rate is specified upon entry of Take-Profit Orders, market conditions may often prevent the execution of an individual Customer's Take-Profit despite other dealing activity at that price level.
2.23. U.S. Dollar-based Currency Pairs: The relationship between the U.S. Dollar and a Foreign Currency, which is the subject of a Foreign Exchange transaction in which the U.S. Dollar is purchased from (or sold to) a counterparty against delivery (receipt) of such Foreign Currency. Examples of popular U.S. Dollar-based Currency Pairs include EUR/USD (U.S. Dollar against European Euro), USD/JPY (U.S. Dollar against Japanese Yen), GBP/USD (Pound Sterling against U.S. Dollar), and USD/CHF (U.S. Dollar against Swiss Francs).
2.24. Value Date: With respect to any Foreign Currency contract, the applicable settlement date specified in the confirmation as it relates to the particular contract. A Value Date must be a Business Day in each country in which a subject currency of a transaction is the lawful currency.
3.1. Currency. All initial deposits to Customer Accounts will be accepted only in U.S. Dollars and, unless settlement and delivery of a Foreign Currency have taken place, all Balances shall be computed and reported only in U.S. Dollars.
3.2. Minimum Initial Deposit. To open a Hotspot FXr trading Account, a minimum deposit of $7,500 by check or wire transfer is required.
3.3. Recognition of Deposits. No deposit shall be recognized until the wire or check has been fully cleared and collected by Hotspot FXr's bank or depository institution.
3.4. Withdrawals. Payments from a Customer's Account require a Notice of Withdrawal signed by all required parties, and require a minimum of four (4) Business Days from receipt of the Notice of Withdrawal for issuance of a electronic funds transfer or wire transfer, as Hotspot FXr in its sole discretion shall elect. Funds will be returned to the originating account. Certain charges may apply.
3.5. Fees. All banking fees shall be charged to the Customer's Account at Hotspot FXr's discretion, including a $50.00 Hotspot FXr fee, over and above any bank fees, for each returned check. 4.1. Opening Margin. Current Opening Margin requirements are as follows, and are subject to change, as set forth herein and in the Customer Agreement:
U.S. Dollar-Based Currency Pairs and Cross-Currency Pairs (except zloty) :
4.2. Maintenance Margin. For most Accounts under standard market conditions, and subject to all rights of Hotspot FXr to vary such requirements at its discretion pursuant to these Trading Policies and the Customer Agreement, the Maintenance Margin level shall be set at one hundred percent (100%) of the Opening Margin level.
4.3. Right to Change Opening Margin or Maintenance Margin Requirements. Hotspot FXr shall have the right, in its sole discretion, to change the Opening Margin or Maintenance Margin requirements at any time. Hotspot FXr may change the Opening Margin or Maintenance Margin Requirements due to, among other things, the volatility of a particular Foreign Currency which is the subject of an Open Position or the reduced liquidity associated with holding an Open Position during certain periods of the day.
4.4. Margin Calls. In the event that, in the opinion of Hotspot FXr and in accordance with Hotspot FXr's reasonable best estimate of the then prevailing and obtainable market spot dealing rates, a Customer's account Balance should fall below the Maintenance Margin level for an individual Open Position or for a group of netted Open Positions or for the Customer's Account in the aggregate, Hotspot FXr shall attempt to contact the Customer, at Hotspot FXr's sole discretion, either by (i) electronic mail at the e-mail address provided to Hotspot FXr by Customer, or (ii) telephone at the telephone number designated in writing to Hotspot FXr by the Customer, which may, at the Customer's option, be a pager or an automated answering or voice recording system. In the course of any such attempt, Hotspot FXr shall indicate, to the extent reasonably possible, that a Margin Call is being issued on the subject Account. Following completion of the attempt, the Customer shall have three (3) hours to remit, by wire transfer in accordance with Section 3.2 above, sufficient money in U.S. Dollars to raise the Customer's Balance to the Opening Margin levels. In the event the Customer fails to remit the required Margin within the specified time, Hotspot FXr shall, at its discretion, have the right, but not the obligation, to liquidate any or all Open Positions in the Customer's Account, and the Customer shall remain liable for any resulting deficit balances. Once issued, the Customer must comply in full with the Margin demand regardless of subsequent price action and irrespective of any recovery in market value of the subject Open Positions. Customers are prohibited from increasing or establishing any new Open Positions while any Margin Call remains unsatisfied.
4.5. Lockout Level. Subject to all additional rights of Hotspot FXr under the Customer Agreement, in the event that, in the opinion of Hotspot FXr and in accordance with Hotspot FXr's reasonable best estimate of the then prevailing and obtainable market spot dealing rates, and regardless of whether or not prior Margin Calls have been issued or met, the Customer's account Balance should at any time fall below seventy-five percent (75%) of the Opening Margin level for an individual Open Position or for a group of netted Open Positions or for the Customer's Account in the aggregate, Hotspot FXr shall have the right, but not the obligation, to liquidate any or all Open Positions in the Customer's Account, and the Customer shall remain liable for any resulting deficit balances.
4.6. Confirmation and Re-entry Opportunity. Should Hotspot FXr decide pursuant to this Section 4 or any other applicable provision of the Customer Agreement to liquidate any Open Position in the Customer's Account, Hotspot FXr shall attempt to contact the Customer either by (i) electronic mail at the e-mail address provided to Hotspot FXr by Customer, or (ii) by telephone at the telephone number designated in writing to Hotspot FXr by the Customer, which may, at the Customer's option, be a pager or an automated answering or voice recording system, for the purpose of attempting to confirm such liquidation and, at the discretion of Hotspot FXr, offer the Customer the opportunity to post sufficient Margin to re-establish any of the liquidated positions at the then prevailing and obtainable market dealing rates. Hotspot FXr shall have no liability to the Customer whatsoever for any decision Hotspot FXr may make to liquidate, or not to liquidate, any Open Position, nor for any failure of Customer to receive Margin Calls or confirmations.
5. SECURITY DEVICES AND PROCEDURES. Hotspot FXr may supply security devices or prescribe security procedures relating to the use of or access to Hotspot FXr's on-line trading system (the "Hotspot FXr Trading System"), which may include, without limitation, digital certificate(s), user name(s) and/or password(s) that may be required to access or use the Hotspot FXr Trading System ("User Code(s)"). Customer and Customer's authorized personnel (i) shall use such security devices and implement and follow such security procedures for so long as Customer or any of its authorized personnel use or access the Hotspot FXr Trading System, and (ii) shall not, nor permit any other person to, remove, modify, exchange, disable, penetrate or otherwise defeat any such security device or security procedure. Notwithstanding the foregoing, Customer hereby assumes full responsibility for assuring itself that any security devices or procedures are adequate for the protection of Customer's interests. Hotspot FXr reserves the right to revoke or modify any User Code at any time without prior notice. Customer shall be responsible for any executed Orders and all other acts or omissions that occur while Customer's User Code is being used.
6.1. General. All references to Hotspot FXr hours of trading are in U.S. eastern standard time ("EST") using twenty-four (24) hour format. Hotspot FXr normally provides access to over-the-counter ("O.T.C.") Foreign Exchange quotes from 1800 EST Sunday to 1630 EST Friday, but Hotspot FXr reserves the right to suspend or modify its trading hours at any time. O.T.C. Foreign Currency markets operate twenty-four (24) hours a day. It is the sole responsibility of the Customer to remain available for Margin Calls, Order and Fill confirmations, and other communications regarding the Customer's Hotspot FXr Account at any time.
6.2. Trading Hours. Hotspot FXr trading Hours are from Sunday 1800 EST (U.S. Eastern Standard Time) to Friday 1630 EST on any Business Day. Hotspot FXr reserves the right to suspend or modify its trading hours at any time.
7.1. Order Entry /"Execution Only". All orders shall be placed through the Hotspot FXr Trading System or by telephone through the Hotspot FXr order desk in New Jersey. While Hotspot FXr, as the principal counterparty to its Customers, enjoys distinct market advantages and works diligently to fill all its Customers' Orders quickly and at the best rates possible, all Orders are accepted on a strict "Execution Only" basis (i.e., regardless of market levels or Spot Rates quoted, reported price action, or erroneous oral confirmations). No trade Order shall be deemed Filled, and Hotspot FXr shall have no liability whatsoever for any Order accepted, unless and until such Order is (1) actually executed, covered and offset with another Hotspot FXr Customer or one or more of Hotspot FXr's clearing counterparties; or (2) accepted by and offset against positions of Hotspot FXr or any of its affiliated organizations or any of their associated principals, officers, directors, affiliates and associates, and confirmed in writing by Hotspot FXr.
7.2. Order Recording/Confirmation. Any and all conversations with Hotspot FXr principals, agents or associates, including the Hotspot FXr order and operations desks may, at the option of Hotspot FXr, be tape recorded to enhance the quality of service, ensure fairness to all parties, and resolve potential disputes. Orders entered with a Hotspot FXr associate or the Hotspot FXr order-desk may, at Hotspot FXr's option, be confirmed via telephone by the Hotspot FXr operations desk. In the event that Hotspot FXr is unable, for any reason, to reach the Customer and confirm an Order, Hotspot FXr shall have the option to cancel such order without liability. Unless otherwise specified, any Order entered with Hotspot FXr shall be accepted on a GTC basis.
7.3. Terms of Acceptance for Orders. It is the Customer's sole responsibility to clearly indicate the terms of an Order when entered, whether Market, Take Profit, Limit Entry, Stop Loss, Day-Only, or GTC and including the Order's Value Date and specified Spot Rate limits, where applicable. Although a Spot Rate is specified upon entry of Stop Loss, Take-Profit and Limit Entry Orders, market conditions may often prevent the execution of an individual Customer's Stop Loss, Take-Profit or Limit Entry Order despite other dealing activity at that price level or may often require Stop-Loss, Take-Profit or Limit Entry Orders to be Filled at a substantially different Spot Rate. The Customer agrees to accept the best rate which Hotspot FXr, in its discretion, may assign to the Fill. The Customer acknowledges that Hotspot FXr shall accept all Orders only on a best-efforts basis. Hotspot FXr shall have no liability for failure to Fill Orders, and makes no guarantee of an Order's priority over the Orders of Hotspot FXr, its other Customers and its principals, officers, directors, affiliates, associates, employees, banks, bank employees or dealers. Hotspot FXr shall have the right, but not the obligation, to reject any Order before or after confirmation, or to cancel and rescind any Fill, where the Customer's Account contains insufficient Margin at the time of Order entry, or where, in the opinion and sole discretion of Hotspot FXr, the execution of such Order may place the Customer's Account in an insufficient Margin condition, or where the execution of such Order or Fill violates any applicable law, rule or regulation or is otherwise illegal or improper.
7.4. Confirmation of Fills. After a Customer Order is Filled, and as soon as reasonably possible given market conditions, Hotspot FXr shall attempt to notify the customer of the Fill by one of the following means: Electronically (on screen), via e-mail, fax, by telephone or by other means at the sole discretion of Hotspot FXr. In the event of an attempt to contact the Customer by telephone, Hotspot FXr shall contact the Customer at the telephone number designated to Hotspot FXr by the Customer, which may, at the Customer's option, be a pager or automated answering or voice recording system, for the purpose of attempting to confirm such Fill. Any failure of Hotspot FXr to confirm a Fill by telephone or any other means, or any failure of Customer, for any reason, to receive such confirmation, shall not invalidate the Fill, and shall under no circumstances give rise to liability on the part of Hotspot FXr and its own or its affiliated organizations principals, officers, directors, associates, or employees. Confirmation of Fills and statements of accounts for Customer shall be deemed correct and shall be conclusive and binding upon Customer if not objected to immediately upon telephone confirmation, and such objection is confirmed in writing by Customer within three (3) Business Days after transmittal to Customer by mail or otherwise. 8.0 Hotspot FXr CLEARLY ERRONEOUS TRADE POLICY Clearly Erroneous Trades Executed on the Hotspot FXr Network If Customer receives an execution on an Order that was either entered or executed in error (in terms of price, quantity or symbol), the Customer may contact the Hotspot FXr help desk from Sunday 1900 EST (U.S. Eastern Standard Time) until Friday 1630 EST and request that Hotspot FXr review the trade to determine if it is, in fact, an erroneous trade. The Customer acknowledges that it is possible (and likely) for Orders to be executed on the Hotspot FXr network at a different rate than the interbank best bid/offer or any other foreign exchange bid/offer market. Any Order executed at a different rate than the interbank best bid/offer or any other foreign exchange bid/offer market shall not be deemed to be erroneous solely because it was executed at such different rate, provided that the price is within the traded range at such time in the applicable market. 'Erroneous' shall be defined as, but shall not be limited to, an Order that was entered into outside of the traded range for a given currency pair for a given trading day (as determined in the interbank market) or, as applicable, outside the traded range for a given currency pair for a particular moment in time (as determined in the interbank market) which may be in question. In the event that the Hotspot FXr staff determines, in its sole discretion, that a material term of such transaction is clearly erroneous, Hotspot FXr may break, cancel, nullify, amend or modify the transaction. Hotspot FXr requires that Customers submit requests to review transactions, via telephone, within thirty (30) minutes from the time the disputed or questioned trade was executed. Hotspot FXr may consider requests received after such time period, depending on the facts and circumstances surrounding such request. Hotspot FXr will make a final determination within [three (3) hours] except under exceptional circumstances. The complainant will receive a written determination from Hotspot FXr.
It is the responsibility of institutional customers of Hotspot FXr to notify its own personnel, who may be in multiple branch offices, as to the terms of this policy. 9.0. LIMITATION OF LIABLILITY. Hotspot FXr AND ITS SUBSIDIARIES, OFFICERS, EMPLOYEES, AGENTS, AND REPRESENTATIVES SHALL NOT BE LIABLE FOR DAMAGES ARISING FROM ANY DELAY, ERROR, INACCURACY, OMISSION, OR OTHER DEFECT IN THE Hotspot FXr TRADING SYSTEM, WHETHER RESULTING FROM SYSTEM OR EQUIPMENT FAILURE OR FROM ANY OTHER CAUSE WHATSOEVER. Hotspot FXr AND ITS SUBSIDIARIES, OFFICERS, EMPLOYEES, AGENTS, AND REPRESENTATIVES SHALL NOT BE LIABLE FOR DAMAGES ARISING FROM THE FAILURE OF ANY PERSON (OTHER THAN Hotspot FXr) TO PERFORM ITS OBLIGATIONS UNDER ANY TRANSACTION, INCLUDING, WITHOUT LIMITATION, THE FAILURE OF CUSTOMER TO PROCESS OR CONFIRM ANY TRANSACTION INITITATED BY CUSTOMER. CUSTOMER HEREBY ACKNOWLEDGES THAT IT HAS NOT RELIED UPON ANY WARRANTY, CONDITION, GUARANTY OR REPRESENTATION MADE BY Hotspot FXr, OR ANY OF ITS SUBSIDIARIES, OFFICERS, EMPLOYEES, AGENTS OR REPRESENTATIVES.
UNDER NO CIRCUMSTANCES SHALL Hotspot FXr OR ITS SUBSIDIARIES, OFFICERS, EMPLOYEES, AGENTS, AND REPRESENTATIVES BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF USE, LOSS OF COST OR OTHER SAVINGS, OR DAMAGE SUFFERED OR COSTS AND EXPENSES INCURRED BY CUSTOMER (REGARDLESS OF WHETHER Hotspot FXr HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH LOSSES, DAMAGES, COSTS OR EXPENSES) FROM ANY CAUSE WHATSOEVER, WHETHER DIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL, ARISING OUT OF OR RELATED TO THE CUSTOMER AGREEMENT (AND ITS ANNEXES THERETO) AND THE Hotspot FXr TRADING SYSTEM.
10.0. GENERAL DISCLOSURES. Hotspot FXr and/or its affiliated organizations make markets in Foreign Currencies (during periods of reduced liquidity) and act as the principal counterparty in Foreign Currency transactions for Hotspot FXr Customer Accounts. While such an arrangement gives Hotspot FXr many distinct advantages in servicing its Customers in O.T.C. Foreign Currencies, the Customer should remain aware that the O.T.C. Foreign Currency market is unregulated, and that Hotspot FXr may at times be working to fill several Customer Orders at similar Spot Rate levels simultaneously, along with its own proprietary Orders or those of its affiliated organizations or either of their associated principals, officers, directors, associates, or employees. Customer acknowledges that, from time to time, Hotspot FXr may execute Orders for itself or its affiliated organizations at the same or better prices ahead of a Customer Order. The Fill rate on Market Orders can and will vary from initial Spot Rate quotes. These risks are more fully described in the Risk Disclosure Statement, which you must read and execute prior to executing your first trade. |
1.0. Your Responsibility
2.0. Common Trading Terms
3.0 Customer Accounts
4.0 Margin Requirements
5. Security Devices and Procedures
6.0. Trading Hours
7.0. Trade Orders
8.0 Clearly Erroneous Trade Policy
9.0. Limitation of Liablility.
10.0. General Disclosures.