Prohibited Trading Practices

Setting up several buy and sell orders at various price points both above and below the current market price, to take advantage of price changes is prohibited. When the market rises and falls, hitting different price points, it raises risk because numerous losses can occur at once from a significant market movement in one direction. Hence, it is prohibited to use this tactic.

Further, it is prohibited to engage in any of the following practices which are not reasonably replicable on actual market (such strategy is not in line with risk management rules that a reasonable trader would apply when trading with their own money):

(i) opening substantially larger position sizes compared to your other trades, whether on this or any other account of the trader;

(ii) opening substantially smaller or larger number of positions compared to your other trades, whether on this or any other account of the trader.

Performing gap trading (high risk practice which carries potential unfavourable outcomes if performed in real market conditions in times of increased volatility) by opening trade(s);

(i) when major global news, macroeconomic event or corporate reports or earnings, that might affect the relevant financial markets are scheduled; or

(ii) hours or less before a relevant financial market is closed for 2 hours or longer; or

Similarly, continuous buying or selling of any instrument without taking into account technical signs, economic indicators, or fundamental news that could point to a future price gain or drop is a kind of betting with unfavorable risk-reward ratios. Performing trades any time outside the best bid or offer; or Performing trades using an external or slow Data feed; are other such examples. Because of its speculative nature and substantial loss risk, entering into these sorts of trades is prohibited.
For Instance- If a trader consistently buys a specific instrument without taking into account any potential risk or signs of an impending market decline. They run the risk of suffering substantial losses if the instrument’s price drops unexpectedly due to their lack of diversification.

In general, an trades placed in contradiction with how trading is actually performed in the financial markets, or in a way that our Risk Team considers, acting reasonably, might cause us financial, reputational or other harm as a result of the trader’s activities ( Some e.g. include overleveraging, overexposure, one-sided bets, account rolling, trading during non-liquid market hours to exploit liquidity shortages, inconsistencies, etc.).