Whatever product you choose for your investments, there is always an associated risk for trading this product. The value of investments can go up as well as down and you may receive back less than your original investment or lose your entire investment. Investments for which you expect high returns often lead to higher risks as well. Keep these risks in mind when trading and try to trade with care.
This page is aimed at providing an overview of the specific risks involved in trading shares. The list is aimed at providing an overview that is as good and complete as possible, but is not collectively exhaustive. Therefore, it is always important to be aware of the fact that there are risks involved in trading and you should consider carefully if you are prepared to and can afford to run these risks.
Before opening an investment account with BUX Zero it’s important that you are aware of the involved risks and agree that you have read and understand these risks. Please read this page carefully before continuing the on-boarding process for opening an investment account for shares with BUX Zero.
Risks involved in trading shares
Market risk is the risk of the value of the shares you invested in declining due to market circumstances and factors that affect the overall performance of the financial markets.
Shares can fluctuate in price. Price risk is the risk of a decline in the price of a share and it is mainly influenced by the performance of the company you invested in and developments in the sector in which that company is active.
When a company you invested in defaults, your shares lose their value. In this case there is a clear risk of losing (part of) your investment and not getting back your invested amount.
The political and economic stability of the country in which the company you invested in is established and/or active, can have an influence on the price of the shares. If a country becomes unstable, this can lead to increased risks.
Liquidity risk is the risk of limited marketability. The liquidity of a share depends on the volume of outstanding shares available for trade (the free float) and the volume of the transactions in that share. If the market is not sufficiently liquid, you run the risk of being unable to sell your shares or being unable to do so for a reasonable price.
Currency exchange risk
Currency exchange risk occurs when you trade in other currencies than the euro. If the exchange rate of the other currency compared to the euro changes, this will impact the value of your investment.