Derivatives Trading Risk Disclosure

Hotcoin

Foreword

This Risk Disclosure is intended to inform investors of the risks arising from the use of leverage in digital asset derivatives trading and to help investors assess and determine their own capabilities. Due to the risks associated with digital asset derivatives trading, investors should carefully read this Risk Disclosure before confirming this Agreement and engaging in derivatives trading. Investors must ensure that they fully understand the nature and rules of derivatives trading and independently decide whether to participate based on their own investment objectives, financial condition, investment experience, and risk tolerance.

Before engaging in high-leverage or derivatives trading, investors are advised to seek independent legal, financial, or other professional advice.

Suitable Investors

Digital asset derivatives trading involves high leverage and high risks. It is only suitable for professional investment institutions, experienced investors, or individuals who fully understand the risks associated with digital asset derivatives trading and are capable of bearing partial or total loss of account funds resulting from investment decisions or trading errors.

Risks

1. Price Volatility Risk

Digital asset derivatives are highly volatile investment products whose prices may fluctuate significantly due to various market factors. Even when the Platform’s automatic margin replenishment feature is enabled, extreme market fluctuations may still prevent additional margin from being added in time.

As market conditions are difficult to predict and control comprehensively, investors may make incorrect investment decisions during actual trading. If risks are not properly managed, investors may suffer substantial losses and shall bear all losses arising therefrom.

2. Trading Risks

(1) Investors should fully understand that derivatives trading involves high leverage and may result in rapid profits or losses. If market movements are contrary to the investor’s trading direction, substantial losses may occur. Depending on the magnitude of the losses, investors may be required to add additional margin or reduce their positions. Otherwise, positions may be subject to forced liquidation, and investors shall bear all resulting losses.

(2) Once a submitted limit order has been executed through the exchange trading system, it cannot be canceled or revoked. Investors must accept the risks associated with this trading mechanism.

(3) The Platform does not guarantee investment profits and will not share profits or losses with investors.

3. Regulatory and Policy Risks

Digital asset derivatives trading may be subject to regulatory and policy risks in certain jurisdictions. Before participating in trading activities, investors should fully understand the applicable regulatory environment and make prudent decisions accordingly.

4. Other Potential Risks

(1) The use of high leverage may create significant risks for both users and the market. To maintain market stability, the Platform may monitor positions involving high leverage. If the Platform determines that a user’s position may adversely affect market stability, it may take appropriate measures, including but not limited to communication, risk warnings, forced position reduction, forced liquidation, order cancellation, early settlement, or other necessary actions, and shall provide users with a written explanation thereof.

(2) The trading rules of the digital asset derivatives market, including but not limited to adjustment factors, settlement dates, and product rules, may be modified based on the actual operational requirements of the Platform. Under special circumstances, the Platform may settle or deliver products earlier or later than scheduled. After the Platform fulfills its notification obligations through official website announcements, SMS notifications, or other applicable methods, users are responsible for managing their own positions in a timely manner. Any resulting profits or losses shall be borne solely by the users.

Reminder

1. Before participating in derivatives trading, investors should thoroughly understand the fundamental principles, associated risks, and applicable rules governing digital asset derivatives trading.

2. The risks described in this Risk Disclosure are not exhaustive and do not fully cover all potential risks associated with digital asset derivatives trading. Before participating in such trading activities, investors should carefully understand and evaluate all other possible risk factors.

3. We sincerely advise investors to make prudent decisions regarding participation in derivatives trading based on their own financial condition, investment experience, and risk tolerance, and to allocate their digital assets prudently.