OptionNalytics Risk Disclosure Statement
Last Updated: 22nd February 2018
Welcome to OptionNalytics. OptionNalytics provides the ability to create and test your trading algorithms. OptionNalytics is not a broker dealer nor investment advisor. OptionNalytics may assist you in managing your strategies, but does not itself execute any order or trades. Although OptionNalytics provides a platform for users to share strategies and ideas, we do not give investment advice and strongly suggest you consult your advisor to fully understand the implications of any strategy that you enter into.
Using OptionNalytics’s services present many inherent risks. You should read and fully understand these risks and the risks inherent with any investment strategy, platform, or tool.
The risks that can arise from using OptionNalytics’s Site and Services fall into several broad categories:
ANY PERMUTATION OR COMBINATION OF THE OCCURRENCE OF THE POTENTIAL EVENTS THAT DEFINE THE RISKS DESCRIBED IN THIS DISCLOSURE STATEMENTS CAN LEAD TO A TOTAL OR PARTIAL LOSS OF OPERABILITY, RESPONSIVENESS, FUNCTIONALITY, AND FEATURES THAT COULD MATERIALLY AND ADVERSELY EFFECT PERFORMANCE AND RESULTS.
It is your obligation to thoroughly and appropriately test any trading algorithm before you put it in production and to continually monitor the operation of any trading algorithm in production to ensure it is running properly.
Risks Inherent In Using Internet Hosted Technology
OptionNalytics makes every effort to insure the complete and accurate execution of algorithms, together with the safety and security of the related data and content. That said, no automated system is 100% reliable or secure.
Risks include (i) availably of your connection to OptionNalytics’s services, including any authentication protocols, your internet connectivity, and that of the hosted location; (ii) the operation of OptionNalytics’s software; (iii) the operation of databases and internal transfers of data; (iii) the provision of data feeds, both in terms of the data provided and stability of data connections; (iv) the software and hardware provided by the hosting environment; (v) the stability and integrity of data connections to your broker-dealer; (vi) the execution of orders by you broker-dealer based on automated requests, and the accuracy of responses to these requests; (v) usage loads, bandwidth limitations, and other bottlenecks inherent in all hosted architectures; (vi) issue, disputes, or failures of third party vendors and other dependencies; and (vii) other general risks inherent in machine based operations.
All software is subject to inadvertent programming errors and bugs embedded in the code comprising that software. Bugs arise in the platform code, in the code of the programming language, and in the code of the database or data depository. Any of these errors and bugs can cause the software in which they are located to fail or not work properly. The applications software used to operate OptionNalytics’s Site and Services depends is subject to this risk. Despite testing and on-going monitoring and maintenance, inadvertent errors and bugs may still cause a failure in OptionNalytics’s applications software.
In an effort to improve the platform and expand it’s capabilities, OptionNalytics may introduce new features or services, may reduce or diminish services, may offer more detailed or refined settings or data points, and may make other changes. In any and all cases, and despite every effort to thoroughly test and assure the performance of upgrades and enhancements, these change may introduce conditions that impact the operation of your algorithms. Further, in the event any such upgrade or enhancement adversely impacts the users of the platform on the whole, OptionNalytics reserves the right to revert to an earlier state. In any event, platform changes can cause certain functions and features in your algorithms to fail, and require you to change your algorithms and related trading strategies.
You should understand the risk that OptionNalytics’s computing and communications infrastructure may fail. We may inadvertently cause a systems failure during planned or unplanned system maintenance. We may undertake software upgrades, either planned or unplanned, that take longer to implement or that causes your computer system or Internet connectivity to fail. We may change or remove functions and features whose change or removal causes your system to fail, function erratically, or function very slowly. Any of the components of your computer system and/or your Internet connectivity could fail entirely, function erratically, or function very slowly. The result of any of these occurrences could make it difficult or impossible for you to access OptionNalytics’s site or use OptionNalytics’s services.
Your ability to engage in algorithmic trading through Internet based services depends on network connectivity between you, your broker, the other third party service providers, and the applicable markets. Any failures or delays in connectivity could materially and adversely affect your ability to successfully engage in algorithmic trading.
Risks Inherent In Creating, Testing, And Executing Trading Algorithms
Creating, testing, and running automated trading algorithms is subject to may risks including: (i) risk that the algorithm (i) may not function as you had intended; (ii) may not achieve the desired result; (iii) may not perform or react to market conditions or data as expected; and (iv) may not be appropriate for the market conditions at the time of execution. No matter how well designed and tested an algorithm, the results are not wholly predictable and performance may be subject to numerous unforeseen factors. Past performance is not an indication of future results.
An algorithm may be designed on the basis of an incorrect understanding of: (i) how OptionNalytics’s platform works; (ii) how your algorithm works; (iii) the operation of the trading markets for the securities to which your algorithm is addressed; (iv) how the different systems comprising those markets interact; (v) the costs of executing the trades suggested by your algorithm; or (vi) how much market opportunity you can capture with automated trading algorithms.
Your algorithm may contain logical errors in the code you write to implement it or in the code of the model of the market with which you test your algorithm. Errors may exist in the data used for testing your algorithm or the applicable model of the market. Your algorithm might appear to succeed in a testing environment using historical data, but fail when using live data. Your algorithm might appear to succeed with some data sources, but fail when using other data sources, including live data sources. Your algorithm may not achieve the returns you anticipate. There are no guarantees, or even expectations, that can be made about the future behavior of an algorithm.
The execution of an algorithm can itself have an impact on the market, and the model may fail to account for real-life factors that impact the model. An algorithm, may fail to account for execution costs including broker commissions, fees, and trading slippage. Further, your broker may not permit orders or actions that were executed in the model.
A promising model result does not necessarily predict a successful strategy. Execution of the code comprising the algorithm and the performance of that code may prove to be impossible in a live trading environment. Changes in various market factors not foreseen in a model can change, causing a strategy to fail.
Risks Inherent In Markets, Options And Trading In General
You may incur losses (or fail to gain profits) while trading securities. You should discuss the risks of trading with your financial advisor. OptionNalytics provides a tool for backtesting trading strategies. We do not provide investment, financial, regulatory, tax or legal advice.
The risk of loss in trading commodity futures and options can be substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. You should realize that when trading futures and/or granting/writing options you can lose the full balance of your account. It is also possible to lose more than the initial deposit when trading futures and/or granting/writing options. All funds committed should be purely risk capital. Past performance may not be indicative of future results.
Your algorithm might suffer from adverse market conditions. Those conditions can include lack of liquidity, and abrupt and unwarranted price swings. Also possible are late market openings, early market closings, market chaos, and mid-day trading pauses, and other such disruptive events. Your broker may experience failures in its infrastructure, fail to execute your orders in a correct or timely fashion, reject your orders, or fail to comply with applicable laws and regulations.
Risks Inherent With Third Party Dependencies
The systems of third parties, your broker, data feeds, or other services may fail or malfunction. Algorithmic trading depends on the availability of various services from third parties in addition to your algorithm services provider and broker. The operations of all these third parties are beyond our reasonable control and a risk associated with using our platform. The systems of these providers could experience failures, errors, and latency, which could result in missing, incorrect, or stale market data. Any failures or delays in the third party data or connectivity services could materially and adversely affect your ability to successfully engage in algorithmic trading.
Risks Associated With Malicious Acts
Malicious and criminal activities might cause your algorithms and strategy to fail or your brokerage account to be compromised. All computers and networks are subject to malicious “hacking” attacks and criminal activities designed to misappropriate intellectual property, compromise personally identifiable information, steal funds, or any combination of such purposes. These attacks might be attacks on a target of opportunity or specifically targeted. Each of the various systems described above that are necessary for you to engage in live algorithmic trading is subject to such attack. Any such attack could cause the system so attacked to function improperly or not at all and could result in the misappropriation of your intellectual property, the compromise of your personally identifiable information and personal financial information, and the theft of your funds.
Updates To The Risk Disclosure Statement
OptionNalytics may amend or modify this Risk Disclosure Statement from time to time and at any time. Your continued access of the Site and use of the Services following any such amendment or modification shall be deemed your acceptance of such amendment and modification and the associated risks. You agree to review this Risk Disclosure Statement periodically make yourself aware of such amendments and modifications.
BY USING THE OPTIONNALYTICS PLATFORM, YOU AGREE TO ASSUME THE RISKS OUTLINED ABOVE TOGETHER WITH ANY AND ALL RISK INHERENT IN ANY INVESTMENT STRATEGY. WE STRONGLY ADVISE YOU TO SEE CONSULT WITH A PROFESSIONAL BEFORE ASSUMING RISKS THAT MAY BE INAPPROPRIATE FOR YOUR FINANCIAL POSITION.