Risk Disclosure Statement
1. RISK OF SECURITIES TRADING 證券交易的風險
The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities.
2. RISK OF TRADING GROWTH ENTERPRISE MARKET STOCKS 買賣創業板股份的風險
Growth Enterprise Market (GEM) stocks involve a high investment risk. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. GEM stocks may be very volatile and illiquid.
You should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.
Current information on GEM stocks may only be found on the internet website operated by The Stock Exchange of Hong Kong Limited. GEM companies are usually not required to issue paid announcements in gazetted newspapers.
You should seek independent professional advice if you are uncertain of or do not understand any aspect of this risk disclosure statement or the nature and risks involved in trading of GEM stocks.
3. RISK OF TRADING NASDAQ-AMEX SECURITIES AT THE STOCK EXCHANGE OF HONG KONG LIMITED 在香港聯合交易所有限公司買賣納斯達克－美國證券交易所證券的風險
The securities under the Nasdaq-Amex Pilot Program (“PP”) are aimed at sophisticated investors. You should consult a licensed or registered person and become familiarised with the PP before trading in the PP securities. You should be aware that the PP securities are not regulated as a primary or secondary listing on the Main Board or the Growth Enterprise Market of the Stock Exchange of Hong Kong Limited.
4. RISK OF TRADING FUTURES AND OPTIONS 期貨或期權的買賣風險
The risk of loss in trading futures contracts or options is substantial. In some circumstances, you may sustain losses in excess of your initial margin funds. Placing contingent orders, such as “stop-loss” or “stop-limit” orders, will not necessarily avoid loss. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore study and understand futures contracts and options before you trade and carefully consider whether such trading is suitable in the light of your own financial position and investment objectives. If you trade options, you should inform yourself of exercise and expiration procedures and your rights and obligations upon exercise or expiry;
This brief statement does not disclose all of the risks and other significant aspects of trading in futures and options. In light of the risks, you should undertake such transactions only if you understand the nature of the contracts (and contractual relationships) into which you are entering and the extent of your exposure to risk. Trading in futures and options is not suitable for many members of the public. You should carefully consider whether trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances.
(a) Effect of 'Leverage' or 'Gearing'「 槓 桿 」 效 應
Transactions in futures carry a high degree of risk. The amount of initial margin is small relative to the value of the futures contract so that transactions are 'leveraged' or 'geared'. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit: this may work against you as well as for you. You may sustain a total loss of initial margin funds and any additional funds deposited with the firm with which you deal to maintain your position. If the market moves against your position or margin levels are increased, you may be called upon to pay substantial additional funds on short notice to maintain your position. If you fail to comply with a request for additional funds within the time prescribed, your position may be liquidated at a loss and you will be liable for any resulting deficit.
買 賣 期 貨 的 風 險 非 常 高 。 由 於 基 本 按 金 金 額 相 對 地 低 於 期 貨 合 約 本 身 之 價 值 ， 因 此 能 起 「 槓 桿 」 作 用 。 市 場 輕 微 的 波 動 也 會 對 閣 下 投 入 或 將 需 要 投 入 的 資 金 造 成 大 比 例 的 影 響 。 所 以 ， 對 閣 下 來 說 ， 這 種 效 應 可 以 說 是 利 弊 參 半 。 因 此 閣 下 要 承 受 虧 蝕 全 部 基 本 按 金 的 風 險 ， 亦 可 能 需 要 向 市 場 參 與 者 存 入 額 外 金 額 以 維 持 本 身 的 倉 位 。 若 果 市 況 不 利 閣 下 倉 位 或 按 金 水 平 調 高 ， 閣 下 就 會 被 追 收 按 金 ， 須 在 短 時 間 內 存 入 額 外 資 金 以 維 持 本 身 倉 位 。 假 如 無 法 在 指 定 時 間 內 補 倉 ， 閣 下 可 能 會 在 虧 蝕 情 況 下 被 迫 平 倉 ， 所 有 因 此 而 造 成 的 虧 損 亦 一 概 由 閣 下 承 擔 。
(b) Risk-reducing orders or strategies減 低 風 險 買 賣 盤 或 投 資 策 略
The placing of certain orders, which are intended to limit losses to certain amounts, may not be effective because market conditions may make it impossible to execute such orders. Strategies using combinations of positions, such as 'spread' and 'straddle' positions may be as risky as taking simple 'long' or 'short' positions.
即 使 落 盤 時 採 用 某 些旨在預設虧損限額的交易指示(如“止蝕” 或“止蝕限價指示”) ， 也可能作用不大，因為市況可以令這些交易指示無法執行。至於 運用不同持倉組合的策略如「跨 期」和 「馬鞍式」組合等，所承擔的風險也可能與持有最基本的「長」倉或「短」倉同樣的高 。
5. Options期 權
(c) Variable degrees of risk不 同 風 險 程 度
Transactions in options carry a high degree of risk. Purchasers and sellers of options should familiarize themselves with the type of options (i.e. put or call) which they contemplate trading and the associated risks. You should calculate the extent to which the value of the options must increase for your position to become profitable, taking into account the premium and all transaction costs.
期權交易的風險非常高。投資者不論是購入或沽出期權，均應先瞭解他們打算買賣的期權類別(即認沽期權或認購期權) 以 及 相 關 的 風 險 。 你 應計入同 期 權 金 及 所 有 交 易 成 本 ，然後 計 算 出 期 權 價 值 必 須 增 加 多 少 才 能 獲 利 。
The purchaser of options may offset or exercise the options or allow the options to expire. The exercise of an option results either in a cash settlement or in the purchaser acquiring or delivering the underlying interest. If the options is on futures, the purchaser will acquire a futures position with associated liabilities for margin (see the section on Futures above). If the purchased options expire worthless, you will suffer a total loss of your investment which will consist of the options premium plus transaction costs. If you are contemplating purchasing deep-out-of-the-money options, you should be aware that the chance of such options becoming profitable ordinarily is remote.
購 入 期 權 的 投 資 者 可 選 擇 抵銷 或 行 使 期 權 又 或 任 由 期 權 到 期 作 廢 。 如 期 權 持 有 人 選 擇 行 使 期 權 ，便就必須進行現金交收又或是購入或交 出 相 關 的 資 產 。 若 購 入 的 是 期 貨 產 品 的 期 權 ， 期 權 持 有 人 將 獲 得 期 貨 倉 位 ， 並 附 帶 相 關 的保證 金 責 任 ( 見 上 文 「 期 貨 」 一 節 ) 。 如 所 購 入 的 期 權 在 到 期 時 已 沒 有 價 值 ，你將損失所有投資金額 ， 當中包 括 所 有 期 權 金 和 交 易 費 用 。 假 如 你 擬 購 入 極 價 外 期 權 ， 應 注 意 這 類 期 權 要 變 成 有 獲 利 的 機 會 極 微 。
Selling ('writing' or 'granting') options generally entail considerably greater risk than purchasing options. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will be liable for additional margin to maintain the position if the market moves unfavorably against him. The seller will also be exposed to the risk of the purchaser exercising the options and the seller will be obligated to either settle the options in cash or to acquire or deliver the underlying interest. If the options is on futures, the seller will acquire a position in futures with associated liabilities for margin (see the section on Futures above). If the options is 'covered' by the seller holding a corresponding position in the underlying interest or a futures or another options, the risk may be reduced. If the options is not covered, the risk of loss can be unlimited.
Certain exchanges in some jurisdictions permit deferred payment of the options premium, exposing the purchaser to liability for margin payments not exceeding the amount of the premium. The purchaser is still subject to the risk of losing the premium and transaction costs. When the options is exercised or expires, the purchaser is responsible for any unpaid premium outstanding at that time.
某 些 國 家 的 交 易 所 允 許期權 買 方 延 遲 支 付 期 權 金 ， 令 買 方 支 付 按 金 費 用 的 責 任 不 超 過 期 權 金 。 儘 管 如 此 ， 買 方 最 終 仍 須 承 受 虧 損 期 權 金 和 交 易 費 用 的 風 險 。 當 期 權 被 行 使 又 或 到 期 時 ， 買 方 有 需 要 支 付 當 時 餘 下 未 繳 付 的 期 權 金 。
6. Additional Risks Common to Futures and Options
(a) Terms and conditions of contracts合 約 的 條 款 及 細 則
You should ask the firm with which you deal about the terms and conditions of the specific futures or options which you are trading and associated obligations (e.g. the circumstances under which you may become obliged to make or take delivery of the underlying interest of a futures contract and, in respect of options, expiration dates and restrictions on the time for exercise). Under certain circumstances the specifications of outstanding contracts (including the exercise price of an options) may be modified by the exchange or clearing house to reflect changes in the underlying interest.
(b) Suspension or restriction of trading and pricing relationships暫 停 或 限 制 交 易 以 及 價 格 關 係
Market conditions (e.g. illiquidity) and/or the operation of the rules of certain markets (e.g. the suspension of trading in any contract or contract month because of price limits or 'circuit breakers') may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate/offset positions. If you have sold options, this may increase the risk of loss.
市 場 情 況 ( 例 如 市 場 流 通 量 不 足 ) 及 / 或 某 些 市 場 的 規 則 運 用 ( 例 如 因 為 價 格 限 制 或 一 些 「 跌 停 板 」 的 措 施 ， 而 暫 停 任 何 合 約 或 合 約 月 份 的 交 易 ) ， 都 可 以 令 損 失 的 風 險 增 加 ， 因 為 在 此 等 情 況 下 ， 投 資 者 將 難 以 完 成 甚 或 不 能 完 成 交 易 或 進 行 平 倉 。 如 果 閣 下 賣 出 期 權 後 遇 上 這 情 況 ， 損 失 的 風 險 也 可 能 較 大 。
Further, normal pricing relationships between the underlying interest and the futures, and the underlying interest and the options may not exist. This can occur when, for example, the futures contract underlying the options is subject to price limits while the options are not. The absence of an underlying reference price may make it difficult to judge 'fair' value.
此 外 ， 相 關 資 產 與 期 貨 之 間 以 及 相 關 資 產 與 期 權 之 間 的 正 常 價 格 關 係 也 可 能 不 存 在 。 譬 如 ， 期 貨 期 權 所 涉 及 的 期 貨 合 約 須 受 價 格 限 制 而 定 ， 但 期 權 本 身 則 不 受 限 制 。 缺 乏 相 關 資 產 參 考 價 格 會 叫 投 資 者 難 以 判 斷 「 公 平 」 價 格 的 水 平 。
7. ADDITIONAL TRADING RISKS 其他賣買風險
(a) Deposited cash and property 存放的現金及財產
You should familiarize yourself with the protections given to money or other property you deposit for domestic and foreign transactions, particularly in the event of a firm insolvency or bankruptcy. The extent to which you may recover your money or property may be governed by specific legislation or local rules. In some jurisdictions, property which had been specifically identifiable as your own will be pro-rated in the same manner as cash for purposes of distribution in the event of a shortfall.
(b) RISKS OF CLIENT ASSETS RECEIVED OR HELD OUTSIDE HONG KONG 在香港以外地方收取或持有的客戶資產的風險
Client assets received or held by ZY Securities outside Hong Kong are subject to the applicable laws and regulations of the relevant overseas jurisdiction which may be different from the Securities and Futures Ordinance (Cap.571) and the rules made therein. Consequently, such client assets may not enjoy the same protection as that conferred on client assets received or held in Hong Kong.
(c) Commission and other charges 傭金及其他收費
Before you begin to trade, you should obtain a clear explanation of all commission, fees and other charges for which you may be liable. These charges will affect your net profit (if any) or increase your loss.
(d) Transactions in other jurisdictions 在其他司法管轄區進行交易
Transactions on markets in other jurisdictions, including markets formally linked to a domestic market, may expose you to additional risk. Such markets may be subject to regulations which may offer different or diminished investor protection. Before you trade, you should enquire about any rules relevant to your particular transactions in those jurisdictions. Your local regulatory authority will be unable to compel the enforcement of the rules of regulatory authorities or markets in other jurisdictions where your transactions have been effected. You should ask for details about the types of redress available in both your home jurisdiction and other relevant jurisdictions before you start to trade.
(e) Currency risks 貨幣風險
The profit or loss in transactions in foreign currency-denominated assets (whether they are traded in your own or another jurisdiction) will be affected by fluctuations in currency rates where there is a need to convert from the currency denomination of the assets to another currency.
(f) Trading Facilities 交易設施
Electronic trading facilities are supported by computer-based component systems for the order-routing, execution, matching, registration or clearing of trades. As with all facilities and systems, they are vulnerable to temporary disruption or failure. Your ability to recover certain losses may be subject to limits on liability imposed by the system provider, the market, the clearing house and/or participant firms. Such limits may vary: you should ask ZY Securities for details in this respect.
(g) Electronic trading 電子交易
Trading on an electronic trading system may differ from trading on other electronic trading systems. If you undertake transactions on an electronic trading system, you will be exposed to risks associated with the system including the failure of hardware and software. The result of any system failure may be that your order is either not executed according to your instructions or is not executed at all.
Communication or instructions sent over the internet may be delayed due to internet traffic jam or other reasons, and orders of investors may not necessarily be executed at the price indicated on the Internet. Further, communications over the internet may also be subject to transmission blackout, interruption, interception, or incorrect data transmission due to the public nature of the internet or other reasons that are beyond ZY Securities’ control. Messages sent over the internet cannot be guaranteed to be completely secure. You shall be aware of the risk of any delay, loss, diversion, alteration, corruption or virus infection of any messages/instructions either sent to or received from ZY Securities.
(h) Off-exchange transactions 場外交易
In some jurisdictions, and only then in restricted circumstances, firms are permitted to effect off-exchange transactions. The firm with which you deal may be acting as your counterparty to the transaction. It may be difficult or impossible to liquidate an existing position, to assess the value, to determine a fair price or to assess the exposure to risk. For these reasons, these transactions may involve increased risks. Off-exchange transactions may be less regulated or subject to a separate regulatory regime. Before you undertake such transactions, you should familiarize yourself with applicable rules and attendant risks.
(i) Risk of E-Statement Service 電子結算單的風險
Access to the internet or other electronic medium may be limited or unavailable during periods of peak demand, market volatility, systems upgrades or maintenance or for other reasons. Any communication through the internet or other electronic medium may be subject to interruption, transmission blackout, and delayed transmission due to unpredictable traffic congestion and other reasons beyond ZY Securities’ control. Internet is, due to technical limitation, an inherently unreliable medium of communication. As a result of such unreliability, there may be delays in the transmission and receipt of information. The statements may not be sent to the designated email address at all. Moreover, communications and personal data may be accessed by unauthorized third parties, and there are risks of misunderstanding or error in any communication.
(j) RISK OF PROVIDING AN AUTHORITY TO HOLD MAIL OR TO DIRECT MAIL TO THIRD PARTIES 提供代存郵件或將郵件轉交第三方的授權書的風險
If you provide ZY Securities with an authority to hold mail or to direct mail to third parties, it is important for you to promptly collect in person all contract notes and statements of your account and review them in detail to ensure that any anomalies or mistakes can be detected in a timely fashion.
Risk Disclosure Statement – Additional Risks for Structured Products
風險披露聲明 – 結構性產品之額外風險
1. RISKS ASSOCIATED WITH STRUCTURED PRODUCTS 結構性產品涉及的風險
Issuer default risk 發行商失責風險
In the event that a structured product issuer becomes insolvent and defaults on their listed securities, investors will be considered as unsecured creditors and will have no preferential claims to any assets held by the issuer. You should therefore pay close attention to the financial strength and credit worthiness of structured product issuers.
Note: “Issuers Credit Rating” showing the credit ratings of individual issuers is now available under the Issuer and Liquidity Provider Information sub-section under Derivative Warrants and under CBBCs section on the HKEX corporate website.
Uncollateralized product risk 非抵押產品風險
Uncollateralized structured products are not asset backed. In the event of issuer bankruptcy, investors can lose their entire investment. You should read the listing documents to determine if a product is uncollateralized.
Gearing risk 槓桿風險
Structured products such as derivative warrants and callable bull/bear contracts (CBBCs) are leveraged and can change in value rapidly according to the gearing ratio relative to the underlying assets. You should be aware that the value of a structured product may fall to zero resulting in a total loss of the initial investment.
Expiry considerations 有效期的考慮
Structured products have an expiry date after which the issue may become worthless. You should be aware of the expiry time horizon and choose a product with an appropriate lifespan for your trading strategy.
Extraordinary price movements 特殊價格移動
The price of a structured product may not match its theoretical price due to outside influences such as market supply and demand factors. As a result, actual traded prices can be higher or lower than the theoretical price.
Foreign exchange risk 外匯風險
Investors trading structured products with underlying assets not denominated in Hong Kong dollars are also exposed to exchange rate risk. Currency rate fluctuations can adversely affect the underlying asset value, also affecting the structured product price.
Liquidity risk 流通量風險
The Exchange requires all structured product issuers to appoint a liquidity provider for each individual issue. The role of liquidity providers is to provide two way quotes to facilitate trading of their products. In the event that a liquidity provider defaults or ceases to fulfill its role, investors may not be able to buy or sell the product until a new liquidity provider has been assigned.
2. RISKS INVOLVED IN TRADING CALLABLE BULL/BEAR CONTRACTS (“CBBC”) 買賣牛熊證涉及的風險
Mandatory call 強制收回
CBBC are not suitable for all types of investors and you should consider your risk appetite prior to trading. In any case, you should not trade in CBBC unless you understand the nature of the product (including its intraday “knockout” or mandatory call feature) and is prepared to lose the total amount invested since a CBBC will be called by the issuer when the price of the underlying asset hits the Call Price and trading in that CBBC will expire early. Investors will only be entitled to the residual value of the terminated CBBC as calculated by the product issuer in accordance with the listing documents. Payoff for Category N CBBC will be zero when they expire early. When Category R CBBC expire early the holder may receive a small amount of Residual Value payment, but there may be no Residual Value payment in adverse situations. Brokers may charge their clients a service fee for the collection of the Residual Value payment from the respective issuers.
In general, the larger the buffer between the Call Price and the Spot Price of the underlying asset, the lower the probability of the CBBC being called since the underlying asset of that CBBC would have to experience a larger movement in the price before the CBBC will be called. However, at the same time, the larger the buffer, the lower the leverage effect will be.
Once the CBBC is called, even though the underlying asset may bounce back in the right direction, the CBBC which has been called will not be revived and you will not be able to profit from the bounce-back.
Besides, the Mandatory Call Event (MCE) of a CBBC with overseas assets as underlying may be triggered outside Hong Kong Stock Exchange ‘s trading hours.
Gearing effects 槓桿作用
Since a CBBC is a leveraged product, the percentage change in the price of a CBBC is greater compared with that of the underlying asset. You may suffer higher losses in percentage terms if you expect the price of the underlying asset to move one way but it moves in the opposite direction.
Limited life 限定的有效期
A CBBC has a limited life, as denoted by the fixed expiry date, with a lifespan of 3 months to 5 years. The life of a CBBC may be shorter if called before the fixed expiry date. The price of a CBBC fluctuates with the changes in the price of the underlying asset from time to time and may become worthless after expiry and in certain cases, even before the normal expiry if the CBBC has been called early.
Movement with underlying asset 相關資產的走勢
Although the price of a CBBC tends to follow closely the price of its underlying asset, but in some situations it may not (i.e. delta may not always be close to one). Prices of CBBC are affected by a number of factors, including its own demand and supply, funding costs and time to expiry. Moreover, the delta for a particular CBBC may not always be close to one, in particular when the price of the underlying asset is close to the Call Price.
Although CBBC have liquidity providers, there is no guarantee that you will be able to buy/sell CBBC at their target prices any time you wish.
Funding costs 財務費用
The issue price of a CBBC includes funding costs and issuers will specify the formula for calculating the funding costs of their CBBC at launch in the listing documents. Since the funding costs for each CBBC issue may be different as it includes the issuer’s financing /stock borrowing costs after adjustment for expected ordinary dividend of the stock (if the underlying is a Hong Kong stock since the CBBC will not be adjusted for ordinary dividend) plus the issuer’s profit margin, you are advised to compare the funding costs of different issuers for CBBC with similar underlying assets and terms. The funding costs will gradually be reduced over time along with the CBBC in the secondary market as the CBBC moves towards expiry. In general, the longer the duration of the CBBC, the higher the total funding costs will be since it is similar to investors borrowing for a longer tenure to trade in the underlying asset. When a CBBC is called, you will lose the funding cost for the full period since the funding cost is built into the CBBC price upfront at launch even though with the MCE, the actual period of funding for the CBBC turns out to be shorter. In any case, investors should note that the funding costs of a CBBC after launch may vary during its life and the Liquidity Provider is not obliged to provide a quote for the CBBC based on the theoretical calculation of the funding costs for that CBBC at launch.
Trading of CBBC close to Call Price 接近收回價時的交易
When the underlying asset is trading close to the Call Price, the price of a CBBC may be more volatile with wider spreads and uncertain liquidity. CBBC may be called at any time and trading will terminate as a result.
However, the trade inputted by the investor may still be executed and confirmed by the investors after the MCE since there may be some time lapse between the MCE time and suspension of the CBBC trading. Any trades executed after the MCE (i.e. Post MCE Trades) will not be recognized and will be cancelled. Therefore, you should be aware of the risk and ought to apply special caution when the CBBC is trading close to the Call Price.
Issuers will announce the exact call time within 1 hour after the trigger of MCE, and HKEX will also send the list of Post MCE Trades to the relevant Exchange Participants (brokers) who in turn will inform their clients accordingly. For avoidance of doubt on whether their trades have been cancelled (i.e. whether they are Post MCE Trades), you may check with your brokers.
CBBC with overseas underlying assets 涉及海外資產的牛熊證
Investors trading CBBC with overseas underlying assets are exposed to an exchange rate risk as the price and cash settlement amount of the CBBC are converted from a foreign currency into Hong Kong dollars. Exchange rates between currencies are determined by forces of supply and demand in the foreign exchange markets which are affected by various factors.
Besides, CBBC issued on overseas underlying assets may be called outside Hong Kong Stock Exchange’s trading hours. In such case, the CBBC will be terminated from trading on Hong Kong Stock Exchange in the next trading session or soon after the issuer has notified Hong Kong Stock Exchange about the occurrence of the MCE. There will be no automatic suspension of the CBBC by AMS/3. For Category R CBBC, valuation of the residual value will be determined on the valuation day according to the terms in the listing documents.
3. RISKS INVOLVED IN TRADING DERIVATIVE WARRANTS 投資衍生權證(“窩輪”)涉及的風險
Derivative warrant trading involves high risks and is not suitable for every investor. You should understand and consider the following risks before trading in derivate warrants.
Issuer Risk 發行商風險
Derivative warrant holders are unsecured creditors of an issuer and have no preferential claim to any assets an issuer may hold. Therefore, you are exposed to credit risk in respect of the issuer.
Gearing Risk 槓桿風險
Although derivative warrants may cost a fraction of the price of the underlying assets, a derivative warrant may change in value more or less rapidly than the underlying asset. In the worst case the value of the derivative warrants falls to zero and you lose your entire purchase price.
Limited Life 具有效期
Unlike stocks, derivative warrants have an expiry date and therefore a limited life. Unless the derivative warrants are in-the-money, they become worthless at expiration.
Time Decay 時間遞耗
One should be aware that other factors being equal the value of derivative warrants will decrease over time as they approach their expiry dates. Therefore, derivative warrants should never be viewed as products that are bought and held as long term investments.
Prices of derivative warrants can increase or decrease in line with the implied volatility of underlying asset price. You should be aware of the underlying asset volatility.
Market Forces 市場力量
In addition to the basic factors that determine the theoretical price of a derivative warrant, derivative warrant prices are also affected by all other prevailing market forces including the demand for and supply of the derivative warrants. Supply and demand forces may be greatest when a derivative warrant issue is almost sold out and when issuers make further issues of an existing derivative warrant issue.
4. RISKS INVOLVED IN TRADING EXCHANGE TRADED FUNDS (“ETFs”) 投資交易所買賣基金涉及的風險
Market risk 市場風險
ETFs are typically designed to track the performance of certain indices, market sectors, or groups of assets such as stocks, bonds, or commodities. ETF managers may use different strategies to achieve this goal, but in general they do not have the discretion to take defensive positions in declining markets. Investors must be prepared to bear the risk of loss and volatility associated with the underlying index/assets.
Tracking errors 追蹤誤差
Tracking errors refer to the disparity in performance between an ETF and its underlying index/assets. Tracking errors can arise due to factors such as the impact of transaction fees and expenses incurred to the ETF, changes in composition of the underlying index/assets, and the ETF manager’s replication strategy. (The common replication strategies include full replication/representative sampling and synthetic replication which are discussed in more detail below.)
Trading at discount or premium 以折讓或溢價交易
An ETF may be traded at a discount or premium to its Net Asset Value (NAV). This price discrepancy is caused by supply and demand factors, and may be particularly likely to emerge during periods of high market volatility and uncertainty. This phenomenon may also be observed for ETFs tracking specific markets or sectors that are subject to direct investment restrictions.
Foreign exchange risk 外匯風險
Investors trading ETFs with underlying assets not denominated in Hong Kong dollars are also exposed to exchange rate risk. Currency rate fluctuations can adversely affect the underlying asset value, also affecting the ETF price.
Liquidity risk 流通量風險
Securities Market Makers (SMMs) are Exchange Participants that provide liquidity to facilitate trading in ETFs. Although most ETFs are supported by one or more SMMs, there is no assurance that active trading will be maintained. In the event that the SMMs default or cease to fulfill their role, investors may not be able to buy or sell the product.
Counterparty risk involved in ETFs with different replication strategies 不同複製策略的交易所買賣基金涉及之對手風險
(a) Full replication and representative sampling strategies 完全複製及選具代表性樣本策略
An ETF using a full replication strategy generally aims to invest in all constituent stocks/assets in the same weightings as its benchmark. ETFs adopting a representative sampling strategy will invest in some, but not all of the relevant constituent stocks/assets. For ETFs that invest directly in the underlying assets rather than through synthetic instruments issued by third parties, counterparty risk tends to be less of concern.
(b) Synthetic replication strategies 綜合複製策略
ETFs utilizing a synthetic replication strategy use swaps or other derivative instruments to gain exposure to a benchmark. Currently, synthetic replication ETFs can be further categorized into two forms:
i. Swap-based ETFs 以掉期合約構成
? Total return swaps allow ETF managers to replicate the benchmark performance of ETFs without purchasing the underlying ssets.
總回報掉期(total return swaps)讓交易所買賣基金經理可以複製基金基準的表現而不用購買其相關資產。
? Swap-based ETFs are exposed to counterparty risk of the swap dealers and may suffer losses if such dealers default or fail to honor their contractual commitments.
ii. Derivative embedded ETFs 以衍生工具構成
? ETF managers may also use other derivative instruments to synthetically replicate the economic benefit of the relevant benchmark. The derivative instruments may be issued by one or multiple issuers.
? Derivative embedded ETFs are subject to counterparty risk of the derivative instruments’ issuers and may suffer losses if such issuers default or fail to honor their contractual commitments.
Even where collateral is obtained by an ETF, it is subject to the collateral provider fulfilling its obligations. There is a further risk that when the right against the collateral is exercised, the market value of the collateral could be substantially less than the amount secured resulting in significant loss to the ETF.
It is important that investors understand and critically assess the implications arising due to different ETF structures and characteristics.
5. RISKS INVOLVED IN TRADING EQUITY LINKED INSTRUMENTS (“ELI”) 投資股票掛鉤票據涉及的風險
Possibilities of losing investment 賠本可能
You may lose part or all of your investment if the price of the underlying security moves against your investment view.
Exposure to equity market 承受股本市場風險
You will be exposed to the movements in prices of the underlying securities and the stock market, dividend policy and corporate actions and counterparty risks. You must also be prepared to accept the risk of receiving the underlying securities or a payment less than your original investment.
Price adjustment 價格調整
You should note that any dividend declaration or payment may affect the prices of the underlying securities and the payback of the ELI at expiry due to ex-dividend pricing. You should also note that issuer1s may make adjustments to the ELI due to corporate actions on the underlying securities.
Fees and charges 費用及收費
You should consult ZY Securities on the fees and charges related to the purchase and sale of ELI and payment / delivery at expiry. The potential yields disseminated by the Hong Kong Stock Exchange have not taken fees and charges into consideration.
Potential yields 準孳息計算
While most ELIs offer a yield that is potentially higher than the interest on fixed deposits and traditional bonds, the return on investment is limited to the potential yield of individual ELIs.
This Risk Disclosure Statement may be revised or supplemented from time to time. Client should refer to the latest version at our Website.