Risk Disclosure Statement

Effective Date: 1 January 2025  ·  Last Updated: April 2025

1. CapXone Is Not a Financial Advisor

All trading decisions made using CapXone tools are entirely your own. You must conduct your own research and consult a licensed financial advisor if you require personalised investment advice.

2. Regulatory Status — India

• CapXone Technologies is NOT registered with the Securities and Exchange Board of India (SEBI) as a stockbroker, sub-broker, investment advisor, research analyst, or any other regulated intermediary.
• CapXone Technologies is NOT registered with the Reserve Bank of India (RBI) as a payment system operator, NBFC, or any regulated financial entity.
• CapXone Technologies is NOT a depository participant under NSDL or CDSL.
• CapXone is a software tool that connects to your independently held broker account via the broker's published API. All order execution is carried out by your broker — a SEBI-registered entity — under your direction.
• Any strategy, signal, or screener output produced by CapXone is not a SEBI-registered research report and must not be treated as one.

3. Regulatory Status — Global

• United States: CapXone is not registered with the SEC, CFTC, NFA, or FINRA. This platform does not constitute an offer or solicitation for services regulated under US securities or commodities laws.
• European Union / EEA: CapXone is not authorised or regulated under MiFID II, ESMA, or any EU national competent authority.
• United Kingdom: CapXone is not authorised or regulated by the Financial Conduct Authority (FCA).
• Other Jurisdictions: Users are responsible for ensuring that use of this platform complies with all applicable laws and regulations in their own jurisdiction.

4. General Market Risk

Financial markets are inherently unpredictable. Prices can fall as well as rise, and rapidly. You may lose the entire amount you invest. Market risk factors include but are not limited to:

• Economic indicators, central bank policy, and interest rate changes
• Geopolitical events, wars, sanctions, and political instability
• Corporate earnings, management changes, and regulatory actions
• Market sentiment, herd behaviour, and liquidity crises
• Black swan events (pandemics, natural disasters, financial system shocks)
• Currency fluctuation for instruments priced in foreign currencies

5. Leverage & Margin Risk

• F&O (Futures & Options), currency derivatives, commodity derivatives, and crypto perpetuals all involve leverage.
• Margin requirements can change at any time at the discretion of your broker or the exchange.
• Intraday (MIS) positions are automatically squared off by brokers if margin falls below required thresholds.
• CapXone's position sizing and risk tools are illustrative aids, not guarantees against loss.

6. Algorithmic & Automated Trading Risk

Automated strategies executing orders without manual intervention carry specific risks:

• Runaway strategies: Software bugs or unexpected market conditions can cause automated systems to place unintended orders rapidly, resulting in large losses.
• Overfitting: Backtested strategies that appear profitable on historical data may fail on live markets. Past backtest performance is not predictive of future live results.
• Slippage & latency: Live execution prices may differ materially from backtest assumptions due to market impact, order book depth, and API latency.
• Connectivity failure: Internet outages, server downtime, or broker API failures may prevent strategy execution or cause partial fills.
• Parameter sensitivity: Small changes to strategy parameters can dramatically alter performance. Strategies must be robustly validated before live deployment.

You are solely responsible for testing, validating, monitoring, and stopping any automated strategy you deploy through CapXone.

7. AlgoEngine — Personal Use & Marketplace Risk

Regulatory Responsibility

• You are solely responsible for ensuring your use of AlgoEngine complies with all applicable laws and regulations, including SEBI's algorithmic trading framework (effective August / October 2025 in India) and equivalent rules in other jurisdictions.
• If your strategy exceeds the exchange-defined order frequency threshold, or if you intend to share or deploy strategies for third parties, you must obtain the required registrations through a SEBI-registered broker partner. CapXone does not assume this compliance obligation on your behalf.
• Selling, distributing, or monetising strategies or signals derived from AlgoEngine — without holding a SEBI Research Analyst (RA) licence or equivalent — is prohibited under the current platform terms and may constitute an unlicensed advisory activity under SEBI regulations.

Strategy Performance Risk

• Backtested or paper-traded strategy results displayed within AlgoEngine are based on historical data under specific assumptions. They do not represent live trading results and will differ from actual live performance due to slippage, latency, market impact, order rejection, and changing market conditions.
• Strategies that appear profitable in backtesting may lose money in live markets. Overfitting to historical data is a common cause of live strategy failure.
• You must not deploy any strategy to a live broker account before conducting thorough validation, implementing risk controls, and fully understanding the strategy's behaviour across different market conditions.

Future Strategy Marketplace

If a Strategy Marketplace is introduced in the future, participation as a strategy publisher will be restricted to users holding valid regulatory licences — SEBI RA registration or algo vendor empanelment for India; equivalent licences for other jurisdictions. Unverified or unlicensed users will not be permitted to publish strategies for others to use or subscribe to. Subscribing to any Marketplace strategy does not eliminate the trading risks described in this document. Past performance of any published strategy is not indicative of future results.

8. Cryptocurrency Risk

• Crypto prices can move 20–80% in a single day without warning.
• Crypto exchanges can suspend trading, restrict withdrawals, or become insolvent.
• Smart contract exploits, exchange hacks, and rug pulls represent unique risks with no legal recourse in many jurisdictions.
• Tax treatment of crypto assets varies by jurisdiction and may be complex.
• Perpetual futures and leveraged crypto products are especially high risk due to funding rates and liquidation cascades.

9. Options & Derivatives Risk

• Options buyers risk losing 100% of the premium paid if the option expires worthless — which is the majority outcome for retail option buyers.
• Options sellers (writers) face theoretically unlimited loss on naked calls. Margin requirements can increase substantially as markets move.
• Options are complex instruments with non-linear risk profiles (Greeks: delta, gamma, theta, vega). Misunderstanding these can lead to unexpected losses.
• Near-expiry options can lose value extremely rapidly (theta decay accelerates) even when the underlying moves in the expected direction.
• Exercise and assignment risk applies to in-the-money options at expiry.

10. Technology & Platform Risk

• CapXone may experience downtime, maintenance windows, or unexpected outages. During such periods, you may not be able to monitor or manage your positions.
• Broker API rate limits, maintenance, or outages may delay or prevent order execution.
• You are responsible for maintaining alternative means to monitor and manage your broker accounts independently of CapXone at all times.
• You should always know how to log into your broker's own platform directly and how to place or cancel orders manually.
• Software updates to CapXone may temporarily change or disable features.

11. Market Data Risk

Market data displayed on CapXone is sourced from third-party providers and broker APIs. This data may be delayed, inaccurate, or temporarily unavailable. Trading decisions should never be based solely on data displayed on CapXone. Always verify prices with your broker before placing large orders.

12. Third-Party Broker Risk

CapXone connects to brokers via their published APIs. CapXone has no control over broker operations, financial stability, regulatory compliance, or execution quality. Broker insolvency, regulatory action, system failure, or policy changes can directly impact your ability to trade. Funds held with a broker are subject to that broker's terms and the applicable regulatory protections (e.g., SEBI's Investor Protection Fund for Indian brokers).

13. Past Performance Disclaimer

14. AI & Algorithmic Signal Disclaimer

CapXone uses artificial intelligence (AI) models including large language models (LLMs) for market analysis, news summarisation, trade ideas, and screener explanations. These AI outputs:

• Are not financial advice and must not be treated as such
• May contain errors, hallucinations, or outdated information
• Are generated probabilistically and do not reflect certainty about market outcomes
• Are explicitly tagged with disclaimers within the platform

All AI-generated content is provided for informational and educational purposes only. You must independently verify any AI output before acting on it.

15. CopyTrade Signal Risk

14.1 Who Can Use CopyTrade — and How

CopyTrade is currently available in two modes:

• Friends & Family Mode (default): A Master may share trade signals only with people they personally know — family, friends, or colleagues. No licence is required for this personal use. Desk invitations are private and are never shown publicly.
• Professional / Managed Account Mode: If you wish to share signals with clients or persons you do not personally know, you must hold the required regulatory licence for your jurisdiction (SEBI RA / IA / PMS in India; equivalent elsewhere) and obtain prior written approval from CapXone by emailing [email protected]. Operating without approval in this mode may violate SEBI regulations and other applicable securities laws.

14.2 Signal Following Does Not Eliminate Risk

• Copying another user's trades does not guarantee profit. The Master's past performance — including win rate, average returns, or any statistics shown on the Platform — is based on historical closed trades and is not indicative of future results.
• The Master is a private individual, not a licensed financial adviser. Their signals reflect their own personal trading decisions and must not be treated as professional investment advice.
• Different entry prices, partial fills, slippage, margin availability, and broker execution speed mean your results from copying a signal may differ materially from the Master's results on the same signal.
• A Master may exit a position at any time without warning, including immediately after entry. If your copy order executes after the Master's exit, you may hold a position the Master no longer holds.
• Losses on copied trades are entirely your own. CapXone and the Master bear no financial liability for your trading outcomes.

14.3 No Automatic Execution

CapXone CopyTrade does not automatically execute orders in your broker account. Every copy action requires you to tap or confirm the trade. You must be attentive to signals in real time. Delayed action on your part may result in significantly different execution prices compared to the Master's entry.

14.4 Leaderboard (Future Feature)

When and if a public Leaderboard is introduced, only Masters who hold valid, current regulatory licences (SEBI RA / IA / PMS for India; equivalent licences for other jurisdictions) will be permitted to participate. Leaderboard statistics will be based on verified historical data but remain subject to all disclaimers regarding past performance. The presence of a Master on a future Leaderboard does not constitute a recommendation or endorsement by CapXone.

16. Mental Health & Responsible Trading

Trading losses can cause significant psychological stress, anxiety, and depression. We encourage all users to:

• Never trade with money needed for essential expenses (rent, food, healthcare)
• Set and strictly adhere to daily and weekly loss limits
• Take regular breaks from trading — especially after losses
• Seek professional financial advice before committing significant capital
• Seek mental health support if trading is causing significant distress

17. Your Acknowledgement

By using CapXone, you confirm that you:

• Have read and understood this Risk Disclosure Statement in full
• Understand that trading involves substantial risk of financial loss
• Accept full and sole responsibility for all trading decisions and their outcomes
• Understand that CapXone is a technology platform and not a financial advisor or regulated intermediary
• Are trading with funds you can afford to lose
• Will seek independent financial advice if needed

This Risk Disclosure was last updated in April 2025. CapXone Technologies reserves the right to update this document as the platform evolves.