Risk disclosure

Last updated: 7 October 2026

1. General warning

Commodity options are complex instruments and carry a high level of risk. They are not suitable for every investor. You may lose some or all of the money you invest, and in certain cases more than your initial investment. You should only invest money you can afford to lose.

This page summarises the main risks. It cannot cover every risk, and it does not replace the risk warnings in your client agreement.

2. Loss of premium

When you buy an option, you pay a premium. If the price of the underlying commodity does not move as expected before the option expires, the option may expire worthless and you will lose the whole premium, together with any commission and fees.

When you sell (write) an option, you receive a premium but take on an obligation. If the market moves against you, your loss can be much larger than the premium received and, for uncovered positions, may be unlimited.

3. Leverage

Options give exposure to a larger value of the underlying commodity than the amount you pay. This leverage can magnify gains, but it magnifies losses in the same way. A small price movement can lead to a large loss. Where margin is required, you may be asked to deposit additional funds at short notice. If you do not, your positions may be closed at a loss.

4. Volatility

Energy, metals and agricultural prices can move sharply because of weather, harvests, supply disruption, political events, interest rates, currency movements and changes in demand. Option prices can change quickly, and changes in expected volatility can reduce an option's value even when the commodity price itself has not moved.

5. Liquidity

Some options and markets trade in small volumes. At times it may be difficult or impossible to buy or sell at a fair price, or at all. Exchanges may also suspend trading or impose daily price limits, which can prevent you from closing a position.

6. Price gaps

Prices can jump from one level to another without trading in between, for example overnight, over a weekend or after major news. Orders intended to limit losses, such as stop orders, may then be filled at a much worse price than expected, or not filled at all.

7. Counterparty risk

Your positions depend on brokers, exchanges, clearing houses, custodians and other counterparties meeting their obligations. If any of them fails, you could suffer delays or losses. Over-the-counter options, which are not traded on an exchange, carry greater counterparty risk because there may be no clearing house standing behind the trade.

8. Currency risk

Many commodity options are priced in US dollars. If your account or home currency is different, exchange rate movements can reduce your returns or increase your losses, independently of the commodity price.

9. Crypto assets

Options on crypto assets carry additional risks. Crypto prices are extremely volatile and can fall to zero. Crypto markets may be lightly regulated or unregulated, trade around the clock and be affected by technical failures, cyber attacks and sudden changes in law. Investor protection schemes are unlikely to apply.

10. AI-assisted execution

Some of our services use automated and AI-assisted tools to support analysis and trade execution. These tools rely on historical data and models that may not hold in future market conditions. They can make errors, behave unexpectedly in unusual markets or be affected by technical faults, data errors and connectivity failures. They do not remove market risk and do not guarantee any result. Decisions remain subject to human oversight as described in your client agreement.

11. Past performance

Past performance is not a reliable indicator of future results. Any figures, examples, back-tests or projections are illustrative only. Nothing on this website or in our materials is a promise or guarantee of any return.

12. Suitability

Before investing, consider your objectives, financial situation, experience and attitude to risk, and take independent advice if you are unsure. We will assess suitability as part of onboarding, but the final decision to invest is yours. If you have any questions about these risks, please speak with a partner on 1-800-699-9424 or email info@invictus-heritage.com.