Risk Disclosure
Important Information About Trading Risks
Please read carefully before trading
General Investment Risks
All trading involves risk of loss. You can lose some or all of your invested capital.
Never invest money you cannot afford to lose.
- Market volatility can result in rapid price changes
- Past performance does not guarantee future results
- Economic conditions affect all investments
- Individual securities may become worthless
AI and Algorithmic Trading Risks
Our AI-powered recommendations carry additional risks:
- AI models may produce inaccurate predictions
- Market conditions can change faster than models adapt
- Technical failures may interrupt automated trading
- Model performance varies across market cycles
- Black swan events may not be anticipated by AI
Market-Specific Risks
Equity Markets
- Company-specific risks
- Sector concentration risk
- Dividend cuts or suspensions
- Bankruptcy or delisting
Options Trading (NSE F&O)
- Long options (CE/PE buy) — maximum loss is limited to the premium paid; this is the primary use case our signals support.
- Short / written options & naked positions — loss can be substantially larger than premium received, in some cases multiples of the margin blocked.
- Time decay (theta) erodes long-option value rapidly near expiry.
- SEBI peak-margin & intraday margin rules may force squaring off if margin shortfalls occur.
- Lot-size based contracts; weekly/monthly expiry assignment risks apply.
Technology and Platform Risks
- System outages may prevent trading
- Internet connectivity issues
- Data feed delays or inaccuracies
- Cybersecurity threats
- Software bugs or glitches
Leverage and Margin Risks
Leverage amplifies both gains and losses.
- Margin calls may force liquidation at unfavorable prices
- Interest charges on borrowed funds
- Potential for losses exceeding initial investment
- Forced selling during market stress
Regulatory and Tax Risks (India)
- SEBI circulars, exchange (NSE/BSE/MCX) bye-laws and margin frameworks can change, impacting product availability and execution.
- STT, exchange transaction charges, GST, SEBI turnover fees, stamp duty and brokerage are levied on every trade and reduce net returns.
- Short-Term Capital Gains (STCG), Long-Term Capital Gains (LTCG) and business-income classification of F&O profits have direct tax implications — please consult a Chartered Accountant.
- SEBI peak-margin, upfront-margin and intraday leverage restrictions are enforced by your broker and may limit position sizing.
- RBI's LRS rules apply to any cross-border investments and remittances.
Risk Management Recommendations
Best Practices
- Diversify your portfolio across assets and sectors
- Use stop-loss orders to limit downside risk
- Never invest more than you can afford to lose
- Regularly review and rebalance your portfolio
- Understand all investments before committing capital
- Consider your time horizon and risk tolerance
Questions about risks?
Contact our risk management team at support@targetcapital.ai