Terms and Conditions
In consideration to Elibank Vernon, accepting your orders to trade option contracts for your Account (Account), you agree that the following terms and conditions apply to your Account, in addition to the other terms and conditions currently set forth on www.elibank-vernon.com.
- 1. Risks of Option Trading
The purchase or writing of option contracts involves a high degree of risk and is not suitable for all investors.
By applying to open an Option Trading Account, you represent that you:
- Understand the risks inherent in option trading;
- Are financially able to withstand option-trading losses, including maximum the loss of your entire investment;
- Have determined that option trading is suitable for you, considering your financial situation and investment objectives, and
- Are willing and able to assume the financial risks and hazards of options trading, and agree that you will in no way hold Elibank Vernon or any of its affiliates, responsible for any associated losses.
Neither Elibank Vernon nor its officers, employees or agents are authorized to give tax advice. You should consult a professional tax advisor regarding the tax effect of option transactions in Your Account.
- 2. Importance of Accuracy on Your Application
You represent that the information you have provided on the application to open an Account is accurate. You agree to notify Elibank Vernon if there are important changes in the investment objectives or financial situation you have described in your application.
- 3. Rules and Regulations
You represent that you understand that any option transaction made for your Account is subject to the rules, regulations, customs, and usages of the registered derivatives exchange, applicable self-regulatory organization or market where such transaction was executed. You agree to abide by such rules, regulations, customs, and usages, and agree that, in acting individually or in concert with others, you will not exceed any applicable position or exercise limits imposed by such exchange, association or other market with respect to option trading.
- 4. Provision of Services
When we approve your Account for option trading, We will act as your advisor to purchase, sell, assign, transfer, exercise, endorse, clear, or otherwise handle puts, calls, and other contracts relating to derivatives, derivatives-related indices, and other prohibit option trading or certain types of option transactions or specific option transactions in Your Account.
- 5. Payment
We may decline to accept your order to purchase option contracts if there are not sufficient funds available (that is, funds on which no holds or other restrictions are imposed) in your Account to pay the purchase price, if you do not have sufficient equity in your Account to meet applicable margin requirements, or for other reasons subject to our discretion. Option transactions must be settled on the settled business day after the day your order is executed, and it is your responsibility to deposit necessary funds and maintain sufficient equity in the Account.
- 6. Assignments
If sufficient assets or equities are not in Your Account to cover the assignment of an option, at our discretion, may (but are not required to) take action. We may place an order to close the short option position on the business day prior to expiration. If an option is assigned, we may close out the position(s) that result from the assignment. You agree to waive, and to release us and our officers, employees, and agents from any and all claims of damage or loss, then or at a later time sustained, as a result of the exercise or non-exercise of an option contract(s).
We allocate exercise assignment notices among customer short positions according to an automated procedure. This procedure randomly selects from among all customer short option positions (including positions established on the date of assignment) those contracts that are subject to exercise. All European-style short option positions are liable for assignment at any time. You acknowledge that the assignment process may result in multiple partial assignments and/or multiple transactions to fulfill a single assignment, and a separate commission charge will apply to each partial assignment or transaction needed to complete an assignment.
- 7. Position and Exercise Limits–Rules
You agree that you will not, either acting individually or together with others, directly or indirectly:
- Hold or control any number of option contracts that exceed the position limitations, or
- Exercise a long position in any option contract that exceeds the exercise limitations, all as set from time to time by the exchanges or markets where such option contracts are traded.
All option trading activity in your Account will be conducted according to the constitutions, rules, regulations, and usages of the applicable exchange and/or regulatory agency. In addition, we may, at our discretion and without prior notice impose more restrictive house option position limitations.
- 8. Severability
If any provision or condition of the Account Trading Agreement shall be held to be invalid or unenforceable by any court or regulatory or self-regulatory agency or body, such invalidity or unenforceability shall attach only to such provision or condition. The validity of the remaining provisions and conditions shall not be affected thereby, and the Account Trading Agreement shall be valid and enforceable as if any such invalid or unenforceable provision or condition were not contained herein.