07-Risk disclosure and responsible trading – HashKey MENA

Perpetual contracts are high-risk leveraged products and are not suitable for every investor. You can lose money quickly, and your losses can equal your entire position margin. Trade only with capital you can afford to lose.

Regulatory disclaimer VARA's authorisation of HashKey to provide ETD services is not an endorsement of any specific exchange-traded derivative, or of any type of exchange-traded derivative offered by HashKey, and must not be taken as such.

The main risks of trading perpetual contracts

Main perpetual trading risks
Risk	What it means
Leverage	Losses are amplified. In cross-margin mode, a loss on one position can consume the margin held against your other positions.
Liquidation	Positions can be closed automatically once the risk ratio reaches 100%, possibly at an unfavourable price and without any action from you.
Funding	Holding a position through a funding time results in a payment that can change in both direction and size.
Liquidity and slippage	Your execution price can differ from the price you expected in volatile or thin markets.
Price gaps	Prices can jump sharply and skip intermediate levels, including your stop.
Collateral value	Non-cash collateral can fall in value and reduce your effective margin.
Auto-deleveraging	A profitable position can be closed if the Insurance Fund is depleted.
System and connectivity	An outage or connectivity issue may prevent you from acting in time.
Index and regulation	Changes to index sources or to regulation can affect pricing, availability or terms.
Trading sessions and liquidity (TradFi Perp)	Contracts that reference traditional assets can be traded around the clock, but liquidity follows the trading hours of the underlying market. Outside regular market hours — in pre-market, after-hours, overnight and weekend or market-closed periods — liquidity is lower and slippage, wider spreads and unfilled or unfavourable executions are more likely.
Closed-market restrictions (TradFi Perp)	During weekends, holidays and other closed-market periods, some positions may be limited to reduce-only orders, and the handling of automatic liquidation may be paused or adjusted under the product rules. You remain responsible for monitoring your risk, and positions may be processed quickly or at an unfavourable price once normal handling resumes.
Corporate actions and lifecycle (TradFi Perp)	In the initial phase, economic adjustments for corporate actions such as dividends, stock splits and share consolidations are not made. If such an event materially affects an underlying, HashKey MENA may issue an announcement and may settle, suspend or delist the affected contract.
No ownership of the underlying (TradFi Perp)	TradFi Perp contracts do not represent ownership of the underlying stocks, indices, commodities or other assets, and do not grant any shareholder rights or other asset-related interests.

Past performance and historical market conditions are not a reliable guide to future outcomes. The last four risks above apply specifically to perpetuals that reference traditional assets; their product-specific rules are set out in the TradFi Perp FAQ.

Your responsibilities

Understand how leveraged trading works before you place an order.
Monitor your positions and margin continuously and in real time.
Review the contract specifications and risk limits before trading.
Understand that liquidation is automatic and may occur with no warning beyond the early alert.
Comply with the laws that apply in your jurisdiction.

A code for responsible trading

Do

Use low leverage and modest position sizes.
Set a stop-loss and a take-profit on every trade.
Trade only with money you can afford to lose.
Check funding and your risk ratio before holding overnight.
Keep learning, and practise on the demo where it is available.

Avoid

Using the maximum leverage by default.
Trading savings, rent or borrowed money.
Chasing losses or adding to a losing position without a plan.
Relying on notifications as your only form of monitoring.
Treating perpetual trading as a source of guaranteed income.

Protections for Retail Investors

A leverage limit of 5x, with an initial margin of at least 20%, applied to every order.
A suitability assessment that controls access, with the option to set a lower leverage limit where appropriate for a particular client.
Negative balance protection, so a liquidation shortfall is cleared by the Insurance Fund.
A requirement to complete risk acknowledgment and training before gaining access.
Ongoing monitoring of client outcomes, with further measures available where needed, such as enhanced disclosures or a reduced leverage limit.
Real-time visibility of your positions, initial margin and maintenance margin.

Market disruption

In conditions such as extreme volatility, an index outage, a sharp loss of liquidity or a technology failure, the exchange may reject orders, adjust price bands, change leverage or risk limits, change the funding method, suspend trading or close positions in order to maintain a fair and orderly market.

This article is for educational purposes and does not constitute investment advice.

Disclaimer

HashKey MENA FZE (“HashKey”) is authorised by the Dubai Virtual Assets Regulatory Authority (“VARA”) to provide Exchange Traded Derivative (“ETD”) Services in Dubai. VARA’s approval of HashKey to provide ETD Services does not constitute, and must not be construed as, an endorsement of (i) any specific ETD or (ii) any type or category of ETDs made available by HashKey.

Risks of ETDs

ETDs are complex, high-risk products and may not be suitable for all investors. Before trading any ETD offered by HashKey, you should carefully consider the following non-exhaustive risks:

Risk of total loss – You may lose some or all of the funds you invest. In leveraged products, losses can exceed your initial deposit or margin.
Leverage risk – Leverage magnifies both gains and losses; small movements in the underlying may result in disproportionately large losses and may trigger margin calls or the forced liquidation of your positions.
Volatility of underlying virtual assets – Prices of the underlying virtual assets can be highly volatile and may move sharply against you, including outside trading hours.
Liquidity risk – Market conditions may make it difficult or impossible to close a position at your desired price or at all.
No guarantee of returns – Past performance is not indicative of future results. There is no assurance of any profit, return or capital protection.
Counterparty, operational and technology risk – Including settlement, custody, systems, cyber-security and platform availability risks.
Regulatory and legal risk – Changes in law, regulation or VARA requirements may adversely affect ETDs, their availability or their value.

Perpetual ETDs (perpetual futures) offered by HashKey

At this time, the ETDs made available by HashKey comprise perpetual ETDs (perpetual futures products), which are complex, leveraged derivative instruments and may not be suitable for all investors. Perpetual ETDs carry additional risks, including (on a non-exhaustive basis):

Leverage and margin risk – Positions are traded on margin; adverse price moves can rapidly erode your equity and result in automatic margin calls, forced position reduction or liquidation.
Funding and no-expiry risk – Perpetual ETDs do not have a fixed expiry date. You may be required to make or receive funding payments over an indefinite period, and cumulative funding, fees and spreads can materially affect returns even if the underlying price moves in your favour.
Price dislocation risk – The price of a perpetual ETD may diverge, potentially materially and for sustained periods, from the spot price of the relevant underlying virtual asset or from prices on other venues, particularly in volatile or stressed markets.
Close-out and liquidation risk – In stressed or illiquid markets, it may not be possible to open, reduce, hedge or close positions at your preferred price or at all; liquidation mechanisms, insurance funds and other loss-allocation tools may be applied, and you may suffer losses up to the full amount of collateral and other assets allocated to support your positions.

This statement does not describe all risks associated with ETDs or perpetual ETDs. Before entering into any ETD transaction, you should read the relevant product disclosures, terms and conditions, and the full risk disclosures for each specific ETD, including in particular the Additional Terms Applicable to Perpetual Futures Products and the Risk Disclosures for Perpetual Futures Products, and only trade if you fully understand the nature of the product and the risks involved and are able to bear the potential losses.