The WEX website is provided solely for informational purposes and therefore should not be considered complete, precise, or current. No statement within the website should be construed as a recommendation to buy or sell a security or to provide investment advice. All customers must read all risk disclosure statements relevant to their trading before opening an account.
I. ANTI-MONEY LAUNDERING NOTIFICATION
To help the government fight the funding of terrorism and money laundering activities, Federal law requires financial institutions to obtain, verify, and record information that identifies each person who handles transactions on behalf of others.
Upon applying for the services of the Firm, WEX is required to collect (at a minimum) information such as the following from you:
- Your Name
- Date of Birth
- Identification number, such as:
- U.S. Citizen: taxpayer identification number (social security number or employer identification number)
- Non- U.S. Citizen: taxpayer identification number, passport number, and country of issuance, alien identification card number, or government-issued identification showing nationality, residence, and a photograph of you.
You may also be asked to show your driver's license, corporate documentation or other identifying documents. A corporation, partnership, trust or other legal entity may need to provide information such as principal place of business, local office, employer identification number, certified articles of incorporation, government-issued business license, a partnership agreement or a trust agreement.
WEX considers the information our clients provide to us, and entrust with us, on a daily and ongoing basis to be of the utmost importance. In order to provide brokerage services and maintain compliance with securities regulations, WEX collects certain personal, non-public information from you, which is obtained from the following sources:
- Information WEX receives from you on applications or other forms; and
- Information about your transactions with others or us.
WEX uses the personal, non-public information that we collect to service your firm, which includes qualifying you for trading various products and using the services available through the WEX system(s). The information may also be necessary to execute and confirm your WEX transactions. In doing so, we may share such information with our employees, agents, and affiliates. WEX restricts access of your personal, non-public information to those employees who need to know that information to provide products and/or services to you. WEX maintains physical, electronic, and procedural safeguards to guard your personal, non-public information. For example:
- WEX does not sell or license information about WEX customers to third parties, nor do we sell our customer e-mail addresses to third party marketers.
- We maintain strict employment policies that prohibit employees who have access to personal, non-public information from using or disclosing such information except for business purposes.
- Only authorized WEX personnel via valid user names and passwords can access the WEX system. In addition, WEX Internet-based systems include multiple security measures.
III. CLIENT NOTICE REGARDING PRE OR POST-MARKET SESSION TRADING
Pursuant to NASDAQ Rule 4631 and BATS Rule 3.21, all member firms must disclose to their customers any inherent risks should they choose to conduct trading activities outside of normal market hours, and that each customer should consider the following:
- Risk of Lower Liquidity. Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more orders that are available in a market, the greater the liquidity. Liquidity is important because with greater liquidity it is easier for investors to buy or sell securities, and as a result, investors are more likely to pay or receive a competitive price for securities purchased or sold. There may be lower liquidity in extended hours trading as compared to regular market hours. As a result, your order may only be partially executed, or not at all.
- Risk of Higher Volatility. Volatility refers to the changes in price that securities undergo when trading. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility in extended hours trading than in regular market hours. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price in extended hours trading than you would during regular market hours.
- Risk of Changing Prices. The prices of securities traded in extended hours trading may not reflect the prices either at the end of regular market hours, or upon the opening of the next morning. As a result, you may receive an inferior price in extended hours trading than you would during regular market hours.
- Risk of Unlinked Markets. Depending on the extended hours trading system or the time of day, the prices displayed on a particular extended hours system may not reflect the prices in other concurrently operating extended hours trading systems dealing in the same securities. Accordingly, you may receive an inferior price in one extended hours trading system than you would in another extended hours trading system.
- Risk of News Announcements. Normally, issuers make news announcements that may affect the price of their securities after regular market hours. Similarly, important financial information is frequently announced outside of regular market hours. In extended hours trading, these announcements may occur during trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.
- Risk of Wider Spreads. The spread refers to the difference in price between what you can buy a security for and what you can sell it for. Lower liquidity and higher volatility in extended hours trading may result in wider than normal spreads for a particular security.
- Risk of Lack of Calculation or Dissemination of Underlying Index Value or Intraday Indicative Value (“IIV”). For certain Derivative Securities Products, an updated underlying index value or IIV may not be calculated or publicly disseminated in extended trading hours. Since the underlying index value and IIV are not calculated or widely disseminated during the pre-market and post-market sessions an investor who is unable to calculate implied values for certain Derivative Securities Products in those sessions may be at a disadvantage to market professionals.
IV. PAYMENTS FOR ORDER FLOW
Although our clients normally select the destination for the execution of their options order, WEX has chosen to participate within the available Payment for Order Flow programs offered by various options exchanges pursuant to the mandatory marketing fee programs that have been adopted by such exchanges and approved by the Securities and Exchange Commission. As a participant in these programs, WEX may receive and/or make payments in varying amounts from the exchanges or other Broker Dealers.
V. BUSINESS CONTINUITY PLAN OVERVIEW
WEX's business continuity plan has been developed to provide reasonable assurance that WEX, in the event that there are disruptions of normal business operations, can maintain business continuity. The plan has been developed to anticipate various types of potential disruptions to ensure that the Firm can react appropriately and timely should a business disruption occur. That said however, no contingency plan provides absolute assurance that an interruption will not occur or that as a result of a disruptive event, a disruption of normal operations will ensue. WEX may periodically update the plan in an effort to maintain as comprehensive a plan as possible.
WEX provides agency execution services only. Accordingly, the Firm's plan focuses on identifying potential risks that may inhibit the Firm's ability to provide execution services and implements the processes that are to be followed in order to reestablish business operations. The plan details actions and alternatives for the Firm's systems, networking, applications, market data feeds, vital records, regulatory reports, relocation sites and employee tasks.
Should there be a serious business disruption, WEX customers are encouraged to log onto the WEX web site (www.tradewex.com) or contact us at (888) 313-0664 for further information.
VI. OPTIONS DISCLOSURE DOCUMENT
Options involve risk and are not suitable for all investors. Prior to buying or selling an option, each customer must review a copy of the Characteristics and Risks of Standardized Options (ODD). This document is available on WEX's website using the following link, http://www.tradewex.com/docs/WEXOptionsDisclosure.pdf, or on the OCC's website at http://www.optionsclearing.com/about/publications/character-risks.jsp. Please contact your WEX representative for a paper copy of the disclosure document.
Spreads, Straddles, and other multiple-leg option strategies can entail substantial transaction costs, including multiple commissions, which may impact any potential return. These are advanced option strategies and often involve greater risk, and more complex risk, than basic options trades.
VII. FINRA Day-Trading Risk Disclosure Statement
Wolverine Execution Services does not promote or recommend the practice of Day-Trading.
You should consider the following points before engaging in a day-trading strategy. For purposes of this notice, a "day-trading strategy" means an overall trading strategy characterized by the regular transmission by a customer of intra-day orders to effect both purchase and sale transactions in the same security or securities.
Day trading can be extremely risky. Day trading generally is not appropriate for someone of limited resources and limited investment or trading experience and low risk tolerance. You should be prepared to lose all of the funds that you use for day trading. In particular, you should not fund day-trading activities with retirement savings, student loans, second mortgages, emergency funds, funds set aside for purposes such as education or home ownership, or funds required to meet your living expenses. Further, certain evidence indicates that an investment of less than $50,000 will significantly impair the ability of a day trader to make a profit. Of course, an investment of $50,000 or more will in no way guarantee success.
Be cautious of claims of large profits from day trading. You should be wary of advertisements or other statements that emphasize the potential for large profits in day trading. Day trading can also lead to large and immediate financial losses.
Day trading requires in-depth knowledge of the securities markets and trading techniques and strategies. In attempting to profit through day trading, you must compete with professional, licensed traders employed by securities firms. You should have appropriate experience before engaging in day trading.
Day trading requires knowledge of a firm's operations. You should be familiar with a securities firm's business practices, including the operation of the firm's order execution systems and procedures. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a stock suddenly drops, or if trading is halted due to recent news events or unusual trading activity. The more volatile a stock, the greater the likelihood that problems may be encountered in executing a transaction. In addition to normal market risks, you may experience losses due to system failures.
Day trading will generate substantial commissions, even if the per trade cost is low. Day trading involves aggressive trading, and generally you will pay commissions on each trade. The total daily commissions that you pay on your trades will add to your losses or significantly reduce your earnings. For instance, assuming that a trade costs $16 and an average of 29 transactions are conducted per day, an investor would need to generate an annual profit of $111,360 just to cover commission expenses.
Day trading on margin or short selling may result in losses beyond your initial investment. When you day trade with funds borrowed from a firm or someone else, you can lose more than the funds you originally placed at risk. A decline in the value of the securities that are purchased may require you to provide additional funds to the firm to avoid the forced sale of those securities or other securities in your account. Short selling as part of your day-trading strategy also may lead to extraordinary losses, because you may have to purchase a stock at a very high price in order to cover a short position.
Potential Registration Requirements. Persons providing investment advice for others or managing securities accounts for others may need to register as either an "Investment Adviser" under the Investment Advisers Act of 1940 or as a "Broker" or "Dealer" under the Securities Exchange Act of 1934. Such activities may also trigger state registration requirements.