If you apply for margin facility service through our Site, this Margin Facility Agreement (“MFA”) will apply to you in addition to Pionex Terms of Service. To the extent of any inconsistency between this MFA and Pionex Terms of Service, this MFA shall prevail.
We are furnishing this section to provide you with some basic facts about purchasing Assets on Margin, and to alert you to the risks involved with Margin Trading. Trading through a Margin Account is highly risky and may result in the loss of all Assets that you have deposited into your Margin Account. In addition, it is important that you fully understand the risks involved in trading Assets on Margin.
1. Interpretations and Definitions
Capitalized terms used in this MFA that are not defined herein, have the meanings given to them in the User Agreement.
“Asset”
Means any contract, such as a derivative or future contract, or any digital asset.
“Margin’’
Means the amount of assets you deposit to your Margin Accout to cover the risk of Margin Trading.
“Margin Call”
Means an instruction by us, Pionex to you, to increase the Margin.
“Margin Account”
Means an account where Margin Facility is made available to you.
“Margin Trading”
Means engaging in any transaction in which assets are purchased entirely or partially through a Margin Facility extended to you.
“Margin Requirements”
Means the requirements, limits and the interests set out on this Site for our grant of Margins to your which we may amend from time to time without prior notice to you.
“Liquidation”
Means a forced sale of an Asset belonging to a user arising from Margin not meeting Margin Requirements.
2. The Assets in your Margin Account will be the collateral for the lending Assets to you. If Assets decline in value, so will the collateral. As a result, we can take actions such as to sell the collateral in your Margin Account held with us or to issue a Margin Call in order to maintain the required Asset value of the Margin Account.
3. You should understand that pursuant to this MFA we generally do not issue Margin Calls and we will not credit your Account or increase your Margin to meet Margin Requirements. We will instead generally liquidate positions in yourMargin Account in order to satisfy Margin Requirements without prior notice to you and without an opportunity for you to choose the positions to be liquidated or the timing or the order of the liquidation.
4. If we do not liquidate positions but issue a Margin Call for any reason, you shall immediately deposit assests into your Margin Account to satisfy our Margin Call.
5. You can lose more Assets than you have deposited in your Margin Account. A decline in value of Assets that are purchased on Margin may require you to provide additional Assets to avoid the liquidation.
6. The Margin Requirements on this Site is only indicative and does not reflect the actual Margin Requirements which can change rapidly depending on market conditions.
7. Margin Requirements can be amended and raised at any time at our sole discretion without written notice to you. These changes often take effect immediately and will affect your existing Margins. If your use of Margin is not within an amended or raised Margin Requirements, you can expect to be liquidated immediately without notice.
8. Margins are subject at all times to Margin Requirements established by us and you agree and undertake to maintain your Margins within Margin Requirements.
9. Our Margin Requirements or risk control may include position size limits or other limits. If these limits are reached or exceeded, you may not be able to place new orders and you authorize us to liquidate existing positions and/or enter into risk reducing transactions on your behalf without notice, in order to bring your Margin Account back into compliance with the relevant Margin Requirements.
10. For the purposes of determining your compliance with our Margin Requirements, we will in our sole discretion determine the value of positions and Assets in your Margin Account. Our calculations may differ from the valuation and prices disseminated by other markets, and you agree to subject yourself unconditionally to our valuations.
11. If the Margin falls below the Margin Requirements or if we revise Margin Requirements to be higher at any time, we can sell the Assets in your Margin Account to cover the Margin deficiency. Where the liquidation is insufficient to cover such shortfall, you will be legally responsible for making up for such shortfalls.
12. We may reject any order if your Margin Account has insufficient Aseets to meet Margin Requirement and can delay processing of any order while determining the Margin status of your Margin Account.
13. We have no obligation to contact you before a Margin Call, or a liquidation is valid. Thus, you should understand that you need to keep yourself informed about preceding Margin Requirements and how Margins will affect you at any time a Margin Requirement changes against your favor. You should also ensure proper risk management of positions that are in line with your risk tolerance.
14. The Liquidation will usually occur automatically but notwithstanding the foregoing, we have no obligation to take any action if your Margin Account does not meet the Margin Requirements.
15. You will not rely on us to close or liquidate positions in your Margin Account in the event you do not comply with the Margin Requirements. In particular, you shall not rely on the auto-liquidation rights and systems to function as a stop-loss order. You shall not assume that we shall liquidate positions to prevent you from losing more than you have deposited. Likewise, we may in our sole discretion and our interests delay or decide not to liquidate positions in your Margin Account with a Margin deficit and shall have no liability for any loss you sustain in connection with such delay of or forbearance from Liquidation.
16. You are not entitled to choose which Assets are liquidated. We have sole discretion and right to decide which positions to liquidate in order to protect our interest. We may allow you to request the order of Liquidation of assets in your Margin Account in the event of a margin deficiency but such requests are not binding on us and we retain the sole discretion to determine the assets to be liquidated including the order and manner of the Liquidation. We may liquidate your position through any method at our sole discretion and we or our Affiliates may take the counterparty position for such Liquidations.
17. Special Risks of Short Selling. There are additional risks associated with short selling Assets that may expose you to significant losses. We may close out your position by buying back an Asset if you do not maintain adequate Margin in your Margin Account. This may expose you to substantial losses if the price of the Asset is above the price at which you sold it short. Short selling carries unlimited market risk and could lead to extraordinary losses because you may have to purchase an Asset at a higher price than which you sold it for in order to cover a short position. There is no limit to how high the price of an Asset can go. When you sell an Asset short, we must lend you the Asset from our own inventory or from outsourced liquidity providers or liquidity within our marketplace provided by other Users. Borrowed Assets are subject to recall without notice. Asset lenders retain the right to recall their Assets at any time. We may buy-in Assets on your behalf, without notice to you, to cover short positions in the event we cannot borrow Assets or re-borrow Assets after a recall notice. You are liable for any losses or costs incurred in the event of a buy-in, including any associated Transactions commissions or fees.
18. You agree that we have the right in our sole discretion but not the obligation to Liquidate and/or set-off all or any part of your positions or Assets in any of your Margin Account, at any time and in any manner without prior notice to you at any time where:
a) Your Margin Account is in deficit;
b) You have insufficient Assets to meet Margin Requirements;
c) We anticipate in our sole discretion that your holding of any position is likely or will result in a future violation of our Margin Requirements;
d) Where you execute an order for which you do not have sufficient Assets;
e) Where we determine in our sole discretion that Liquidation is necessary to advisable to protect you;
f) In an event of default, a breach by one or more terms on your part in this MFA or our User Agreement;
g) Where this agreement is terminated;
h) Where legal or investigation proceedings are commenced by either party.
(Each a “Liquidation Trigger”)
19. You shall be liable and shall promptly pay us for such deficiencies in your Margin Account that arise from such Liquidation or that remains after such Liquidation. We have no liability for any losses sustained by you in connection with such Liquidation (or omissions on our part to do so), even if you re-establish a liquidated position at a worst position. You shall indemnify and hold harmless us for all actions, omissions, costs, fees (including but not limited to attorney’s fees), or liabilities associated with such Liquidation undertaken by us.
20. In the event a Liquidation Trigger occurs you agree that we have the sole right and discretion to freeze all or any part of your Margin Account or Assets and/or to exercise positions on your Margin Account without prior notice to you.
21. These terms and the Margin Requirements are designed to protect the integrity of the market and are not designed to protect you. You understand and agree nonetheless that by using our margin facilities you are subjecting yourself to this MFA and the Margin Requirements. Our failure to apply or enforce any of the terms here in or in the Margin Requirements does not give you any right to bring an action against us and nothing in this Agreement constitutes a warranty or undertaking that we will apply or enforce the Margin Requirements.
