Mandatory disclosure

Risk disclosure

Important information about the risks associated with trading equity, derivatives, and commodities. Read carefully before engaging in any trading activities.

Important - read before trading

Trading in equity, derivatives, and commodities involves substantial risk and may not be suitable for all investors. The value of investments can go down as well as up, and you may receive back less than your original investment.

Derivatives trading is particularly high-risk and may result in loss of your entire investment. Past performance is not indicative of future results.

General trading risks

Market volatility

Stock markets are subject to extreme volatility and significant price fluctuations.
Past performance of securities does not guarantee future results or returns.
Market conditions can change rapidly due to economic, political, or other factors.
Investors may lose part or all of their invested capital.
No trading strategy can guarantee profits or protect against losses.

Liquidity risk

Some securities may have limited trading volumes, making it difficult to buy or sell.
Lack of liquidity can result in wider bid-ask spreads and higher transaction costs.
During volatile market conditions, liquidity may further deteriorate.
Investors may not be able to exit positions at desired prices.
Illiquid securities may experience more dramatic price movements.

Systemic risk

Entire market systems can be affected by economic, political, or regulatory changes.
Technology failures or cyber attacks can disrupt trading operations.
Regulatory changes may impact trading rules and market access.
Economic recessions or financial crises can affect all market participants.
Currency fluctuations can impact returns for international investments.

Equity trading risks

Stock-specific risks

Individual stocks can experience significant price volatility independent of market conditions.
Company-specific events (earnings, management changes, legal issues) can impact stock prices.
Dividend payments are not guaranteed and may be reduced or eliminated.
Stock prices can decline to zero in case of company bankruptcy or delisting.
Sector-specific risks can affect groups of related stocks simultaneously.

Margin trading risks

Margin trading involves borrowing funds to purchase securities, amplifying both gains and losses.
Investors can lose more than their initial investment in margin trading.
Margin calls may require immediate deposit of additional funds or forced liquidation.
Interest charges on borrowed funds reduce overall returns.
Volatile markets can trigger automatic margin calls and position closures.

Intraday trading risks

Intraday trading involves higher frequency transactions and increased transaction costs.
Positions must be squared off within the same trading day, limiting flexibility.
Rapid price movements can result in significant losses within short periods.
Higher leverage in intraday trading amplifies both profits and losses.
Technical analysis and timing become crucial factors affecting profitability.

Derivatives trading risks

Futures trading risks

Futures contracts are highly leveraged instruments that can result in large losses.
Margin requirements can change frequently, requiring additional capital.
Futures contracts have expiration dates and may result in physical delivery obligations.
Price movements in underlying assets can cause significant profit or loss.
Futures trading requires sophisticated understanding of market mechanics.

Options trading risks

Options can expire worthless, resulting in total loss of premium paid.
Writing options involves unlimited loss potential for certain strategies.
Time decay (theta) continuously erodes option values as expiration approaches.
Volatility changes can significantly impact option prices regardless of underlying movement.
Complex options strategies involve multiple risk factors and require advanced knowledge.

Derivative complexity

Derivatives are complex financial instruments requiring specialised knowledge.
Multiple factors including time, volatility, and interest rates affect derivative pricing.
Hedging strategies may not always provide expected protection against losses.
Correlation between derivatives and underlying assets may not always hold.
Regulatory changes can impact derivative trading rules and margin requirements.

Commodity trading risks

Price volatility

Commodity prices are highly volatile and influenced by supply and demand factors.
Weather, geopolitical events, and economic policies can cause sudden price changes.
Seasonal patterns and storage costs affect commodity pricing.
Currency fluctuations can impact commodity prices in international markets.
Speculative trading can amplify price movements in commodity markets.

Delivery and storage risks

Physical delivery of commodities involves additional costs and complexities.
Storage, insurance, and transportation costs can significantly impact returns.
Quality specifications and delivery locations may affect final settlement prices.
Perishable commodities have additional spoilage and deterioration risks.
Warehouse receipts and delivery mechanisms require proper understanding.

Regulatory and policy risks

Government policies on import/export duties can affect commodity prices.
Agricultural policies and subsidies can influence food commodity markets.
Environmental regulations may impact production and pricing of certain commodities.
International trade agreements and tariffs affect global commodity flows.
Regulatory changes in commodity exchanges can impact trading conditions.

Technology and operational risks

System failures

Technology failures can prevent order execution or modification during critical market periods.
Internet connectivity issues may disrupt access to trading platforms.
System maintenance and upgrades may temporarily limit trading capabilities.
Data feed delays or errors can affect trading decisions and order execution.
Backup systems may not always prevent all technology-related disruptions.

Cybersecurity risks

Cyber attacks can compromise trading platforms and client data security.
Phishing attempts and fraudulent communications can lead to unauthorised access.
Malware and viruses can affect trading software and personal devices.
Identity theft and account compromise can result in unauthorised trading.
Regular security updates and vigilance are essential for protection.

Order execution risks

Orders may not be executed at expected prices due to market volatility.
Slippage can occur between order placement and execution, affecting returns.
Partial fills may result in incomplete position building or closing.
Stop-loss orders may not execute at intended prices during volatile markets.
Order routing and execution algorithms may not always optimise pricing.

Regulatory and compliance risks

SEBI regulations

SEBI regulations are subject to change and may impact trading activities.
Non-compliance with regulations can result in penalties or trading restrictions.
Disclosure requirements must be met for certain types of transactions.
Insider trading laws strictly prohibit trading on material non-public information.
Margin requirements and position limits are subject to regulatory oversight.

Tax implications

Trading activities may have complex tax implications requiring professional advice.
Short-term and long-term capital gains are taxed differently.
Securities Transaction Tax (STT) and other charges reduce overall returns.
Tax laws may change and affect the profitability of trading strategies.
Proper record-keeping is essential for tax compliance and reporting.

Risk management guidelines

Position sizing and diversification

Never invest more than you can afford to lose in any single position.
Diversify investments across different sectors, asset classes, and time horizons.
Maintain appropriate position sizes relative to total portfolio value.
Avoid concentrating investments in highly correlated assets.
Regular portfolio rebalancing helps maintain desired risk levels.

Stop-loss and risk control

Use stop-loss orders to limit potential losses on individual positions.
Set realistic profit targets and risk-reward ratios for trades.
Avoid emotional decision-making during volatile market conditions.
Maintain adequate cash reserves for margin calls and opportunities.
Regular monitoring and adjustment of risk parameters is essential.

Education and preparation

Continuously educate yourself about markets, products, and risks.
Understand all terms and conditions before entering any transaction.
Practice with paper trading before committing real capital.
Stay informed about market news and regulatory developments.
Consider professional advice for complex trading strategies.

Important disclaimers

Investment advice: This risk disclosure does not constitute investment advice. Please consult with qualified financial advisors before making investment decisions.

No guarantee: Sapphire Broking does not guarantee profits or protection against losses. All trading involves risk.

Updates: This risk disclosure may be updated periodically. Please check our website for the latest version.

Client acknowledgment

By trading with Sapphire Broking, you acknowledge that

You have read and understood this risk disclosure document.
You understand the risks involved in trading equity, derivatives, and commodities.
You have the financial capacity to bear potential losses.
You will not hold Sapphire Broking liable for any market losses incurred.
You will comply with all applicable laws and regulations.

Risk management team

Email:risk@sapphirebroking.com

Phone:0712-2996300

Hours:Monday to Friday, 9:00 AM to 6:00 PM IST

Last updated: April 2026

Connecting to Sapphire

Aligning the stars

Risk disclosure

Important - read before trading

General trading risks

Market volatility

Liquidity risk

Systemic risk

Equity trading risks

Stock-specific risks

Margin trading risks

Intraday trading risks

Derivatives trading risks

Futures trading risks

Options trading risks

Derivative complexity

Commodity trading risks

Price volatility

Delivery and storage risks

Regulatory and policy risks

Technology and operational risks

System failures

Cybersecurity risks

Order execution risks

Regulatory and compliance risks

SEBI regulations

Tax implications

Risk management guidelines

Position sizing and diversification

Stop-loss and risk control

Education and preparation

Important disclaimers

Client acknowledgment

By trading with Sapphire Broking, you acknowledge that

Risk management team

Ready to unlock new revenue opportunities?

Risk disclosure

Important - read before trading

General trading risks

Market volatility

Liquidity risk

Systemic risk

Equity trading risks

Stock-specific risks

Margin trading risks

Intraday trading risks

Derivatives trading risks

Futures trading risks

Options trading risks

Derivative complexity

Commodity trading risks

Price volatility

Delivery and storage risks

Regulatory and policy risks

Technology and operational risks

System failures

Cybersecurity risks

Order execution risks

Regulatory and compliance risks

SEBI regulations

Tax implications

Risk management guidelines

Position sizing and diversification

Stop-loss and risk control

Education and preparation

Important disclaimers

Client acknowledgment

By trading with Sapphire Broking, you acknowledge that

Risk management team