Policies and Notices for Your Review
In recent years, trading in stocks, particularly technology or sector stocks, has become much more volatile in terms of price movement and volume. At the same time, ease of trading and access to credible and non-credible news has increased dramatically. As a result, more traders than ever are now using sophisticated trading techniques.
Critical Trading Information
- Trading in securities is a highly sophisticated activity. Techniques such as frequent trading in a security, market timing, using of margin and options (in particular, multiple option positions) are extremely complex and should only be used by investors with a thorough understanding of the strategies. Trading in complex strategies increases the risk of loss. In some strategies, investors risk losing their entire investment and can lose more than their investment.
- First Republic Securities Company, LLC is not intended for customers who use high-risk investment strategies, in particular, day trading and short sales. Accordingly, First Republic Securities Company, LLC has the following policies:
- To purchase securities, your account must have enough funds available to cover the order. If you have more than one open order, you must have sufficient funds in your account to cover the execution of all your orders. We reserve the right to reject any orders in which full payment for securities is not in the account at the time of the order.
- Short sales and uncovered short positions are not permitted.
- Our brokerage service is available to residents of the United States only.
- Understand the difference between a market order and a limit order.
- A market order is an order to buy or sell a security at the best available price, once the order is received in the marketplace. A market order is executed without regard to price, and the execution may be at a price significantly different from the current price quoted for the security.
- A limit order is an order to buy or sell a security at a specified price or better. In the case of a buy, the order will not be executed above the limit price. Conversely, in a sell, the order will not be executed below the limit price.
- Limit orders protect investors from significant price movements. It is important you understand how to use limit orders to protect your investments from volatile price movements. You must also realize there is a possibility that limit orders may not be executed.
- Access to First Republic Securities Company, LLC under volatile market conditions may be difficult.
There may be periods of time when investors may be unable to access their accounts, particularly during periods of high volume or volatility. Investors trading electronically may have difficulty accessing their accounts due to high online traffic or because of systems' capacity limitations. During down times, we will work to ensure that access to electronic systems is restored as quickly as possible. Accessing a Client Relations Specialist by telephone may be difficult during times when online trading is not available, particularly during periods of high volume.
- There may be trading delays under volatile market conditions.
Trading at market opening and during periods of high volume and volatility may cause delays in order executions and may result in executions at prices significantly different from the market price quoted or displayed at the time the order was entered. You must understand that market makers may execute orders manually or reduce their size guarantees during periods of volatility, possibly resulting in delays in order execution and losses.
- The ability to cancel an order is limited.
Only on rare occasions can an investor cancel a market order or a marketable limit order. Please do not attempt to cancel and replace these types of orders online. When doing so, you risk creating duplicate orders that are executed and ultimately become your responsibility. You should call a Client Relations Specialist if you wish to cancel or change a market order, a marketable limit order or similar type of order.
- Margin requirements may change without notice.
Past market volatility prompted First Republic Securities Company, LLC, as well as Pershing, our clearing agent, to increase the margin requirement for highly volatile securities, in some cases, to as high as 100%. Trades in highly volatile securities should be placed with these requirements in mind.