6 Asset Classes - 16 Trading Platforms - Over 1000 Instruments.
Key Information Document
Purpose of the "Key Information Document" (KID): This KID provides you with key information about the investment product described in the following section. It is not marketing material. This information is required by Law to help you understand the nature, risks, costs, potential gains and losses of this Product and to help you compare it with other products.
Product - Contract for Differences (CFDs) on Qualcomm
This Product can be traded "Over The Counter" (OTC).
PRIIP manufacturer:
- Name: Trading Point of Financial Instruments Ltd (the "Company")
- Website: xm.com
- Telephone number for additional information: +357 25029933
- Supervisory Authority: Cyprus Securities and Exchange Commission ("CySec")
This Key Information Document was updated on 19.04.2021.
You are about to purchase a Product that is not simple and may be difficult to understand.
What is this Product?
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Type
This Product is a financial instrument of the following category: CFD on stocks.
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Objectives
This Product creates a leveraged exposure to the movement of the value of the underlying asset (i.e. Qualcomm stocks).
Its return is mainly affected by the price and volatility of the underlying asset, the extent of leverage used by the investor and the associated costs of the trade. The price of the underlying asset is driven by demand and supply which is greatly affected by various factors such as important political events (e.g. elections, referendums, etc), central bank announcements, economic and geopolitical developments and investors’ behaviour.
It is noted that this Product does NOT have a minimum holding period.CFDs are speculative products which are traded with leverage and are not appropriate for all investors. Positions may be closed due to margin calls/stop outs. Elaborating further, margin trading requires extra caution, because whilst you can realize large profits if the price moves in your favour, you risk extensive losses if the price moves against you. Failure to deposit additional funds in order to meet the maintenance margin requirement as a result of a negative price movement may result in the CFD being auto-closed. This will occur when your remaining account equity falls below the maintenance margin requirement.
Trading in CFDs carries high level of risk and thus can generate great profits as well as great losses. Investors should never invest more than that they are willing to lose, as it is possible to lose their initial investment. Unless a Client knows and fully understands the risks involved in CFD trading, they should not engage in any trading activity.
The Company acts as the sole execution venue for the execution of the Clients’ orders. The transactions entered in financial instruments with the Company are not executed on a Trading Venue, rather they are executed by the Company, through its Electronic Trading Platform and as such may expose the Client to greater risks than those of a Trading Venue. Therefore, the Company may not execute an order or may change the opening (closing) price of an order in case of a technical failure of the Trading Platform or of quote feeds. Furthermore, it is stressed that under certain market conditions, it may be difficult or impossible to execute your order.
The prices on which you trade with us are the prices shown on our Electronic Trading Platform and they are calculated by reference to the price of the respective financial instrument which the Company obtains from its third-party liquidity providers. The price of the financial instruments being traded is determined by fluctuations in markets outside our control. In setting our prices, spreads and the sizes in which we deal, we take into account the market or markets for the relevant underlying instruments.
Trading online does not necessarily reduce risks associated with trading. By trading online you are subject to risks related to slow or no internet connectivity, hardware or software failures, communication failures and delays. Please refer to the Company’s Risk Disclosure Policy for further information on the associated risks.
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Intended retail investor
Trading in this product will not be appropriate for everyone. This product would commonly be used by persons who want to generally gain short term exposures to financial instruments/markets; are using (trading with) money which they can afford to lose; have a diversified investment and savings portfolio; have a high risk tolerance; and understand the impact of and risks associated with margin trading.
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Term
This product does not have any maturity or termination date.
What are the risks and what could I get in return?
Summary Risk Indicator (SRI):
The SRI is a guide to the level of risk of this Product compared to other products. It shows how likely it is that the Product will incur losses because of movements in the markets. We have classified this Product as 7 out of 7, which is the highest risk class.
It is possible to lose all of your investment, unless you set a limit to the financial loss resulting (‘Stop Loss’) from your investment. In addition, the investment may be lost if the Company is unable to pay out. However, you may benefit from a consumer protection scheme (see the section "what happens if we are unable to pay you"). It is possible that additional investment payments to your initial investment may be required in order to avoid your open positions being stopped out.
In some circumstances you may need to make additional payments to compensate for losses (i.e. margin payments). The total loss you may incur will never exceed your invested amount. The Company offers Negative Balance Protection to its Clients, meaning that they will never be in a position to lose more funds than the amounts invested with the Company. In case the account balance of a Client enters in the negative territory for example due to a gap in the market, this amount will not be requested by the Company, and the Client’s account will be brought back to zero (0).
For retail clients, a mandatory margin close-out rule is applied on an account level basis. This means that when the value of your account (i.e. net profit and loss, and any deposited margin and any other funds) falls below 50% of the initial margin requirement (that was paid to enter into all of the open CFD positions at any point in time), one or more of your CFD positions will be closed out.
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Low risk
High risk
This product is highly liquid and the Company does not prescribe a holding period for any position, whether this is a buy or a sell position. Clients are free to open/close a trade whenever they believe that it best suits them, given that the markets are open.
Performance Scenarios
Market developments in the future cannot be accurately predicted. The scenarios shown in table 2 are only an indication of some of the possible outcome based on recent returns. Actual returns may be lower.
Performance may vary depending on how the market performs and how long you hold the CFD. The stress scenario illustrates an extreme unfavourable scenario based on historical data. Maximum loss would be the loss of the entire investment. Performance results are net of all product costs, yet they do not account for personal taxation costs.
The assumptions used in the performance analysis are described below:
CFD on Qualcomm
Table 1
Investment
€1,000
Holding Period
1 Day
Notional Trade Value
€5,000
Leverage
5
Margin Requirement
€1,000
Margin Used
€1,000
Client fully utilizes available margin on trading platform
Scenarios
Table 2
Long Performance Scenario
Favourable
| Balance | €1,127.78 |
| Return | + 13% |
| Profit / Loss | + €127.78 |
| Opening Price | 154.27 |
| Closing Price | 158.21 |
Moderate
| Balance | €992.84 |
| Return | - 1% |
| Profit / Loss | - €7.16 |
| Opening Price | 154.27 |
| Closing Price | 154.04 |
Unfavourable
| Balance | €885.51 |
| Return | - 11% |
| Profit / Loss | - €114.49 |
| Opening Price | 154.27 |
| Closing Price | 150.73 |
Stress
| Balance | €601.08 |
| Return | - 40% |
| Profit / Loss | - €398.92 |
| Opening Price | 154.27 |
| Closing Price | 141.96 |
Short Performance Scenario
Favourable
| Balance | €1,117.48 |
| Return | + 12% |
| Profit / Loss | + €117.48 |
| Opening Price | 154.27 |
| Closing Price | 157.89 |
Moderate
| Balance | €978.48 |
| Return | - 2% |
| Profit / Loss | - €21.52 |
| Opening Price | 154.27 |
| Closing Price | 153.6 |
Unfavourable
| Balance | €856.53 |
| Return | - 14% |
| Profit / Loss | - €143.47 |
| Opening Price | 154.27 |
| Closing Price | 149.84 |
Stress
| Balance | €618.97 |
| Return | - 38% |
| Profit / Loss | - €381.03 |
| Opening Price | 154.27 |
| Closing Price | 142.51 |
The above performance scenarios have been calculated using the methodology provided by ESMA.
What happens if Trading Point of Financial Instruments Ltd is unable to pay out?
All client money held by the Company are held in segregated bank accounts, separately from the Company’s own funds, and safeguarded with highly-rated credit institutions in Europe. The Company performs, on a daily basis, internal and external reconciliations as required by the CySEC and prescribed by the rules of MiFID II for the Company to ensure that it maintains adequate amounts in its client money accounts to cover all client funds.
In the unlikely event that the Company will be unable to pay you out, the client can contact the Investor Compensation Fund (the "ICF"). The ICF is the Cyprus’ statutory fund of last resort for customers of Cyprus Investment Firms ("CIFs"). This means that the ICF can pay compensation up to €20,000 per eligible client, if the Company is unable to fulfil its financial obligations. The actual level of compensation that will be paid out by the ICF will be based on your claim. The ICF is an independent body, set up under the Investment Services and Activities and Regulated Markets Law of 2007, which the Company is part of, as it is authorised and regulated by the CySEC (License Number: 120/10).
What are the costs?
This table shows the different types of cost categories
One-off costs
| Exit costs | Commission | Not applicable |
| Entry costs | Spread | The difference between the buy price and the sell price is called the spread. This cost is realised each time you open and close a trade. Information about spreads can be found on the Company's website |
On-going costs
| Daily holding costs (Swaps) | A fee is charged to your account for every night that your position is held. This means the longer you hold a position, the more it costs. Information about swaps can be found on the Company's website |
How long should I hold it and can I take my money out early?
Trading in CFD Products involves significant risk with frequent market movements and price changes. Clients are free to open/close a trade whenever they believe that it best fits, given that the markets are open. The Company does not prescribe a holding period for any position whether this is a buy or sell position. The client may choose to set a ‘Stop Loss’ or ‘Take Profit’ on his/her trade to minimise the risk of large unexpected movements.
Clients can withdraw their total balance whenever they choose to do so, if there are no open positions on their trading account. In case there are open positions, the client can withdraw any amount in excess of the margin required for that particular trade, i.e. their ‘free margin’. All withdrawal requests can be made from the ‘Members’ Area’ section on the Company’s website.
How can I complain?
- Steps for lodging a complaint: Clients who wish to file a complaint must do so by submitting the relevant complaint form to the email address below, along with any relevant information.
- Email address: complaints@xm.com
The complaint form can be found in the "Members’ Area" section on the Company’s website.
Other relevant information
It is a legal requirement for the Company to provide its clients with the following documents and policies:
