RISK DISCLOSURE STATEMENT
This statement outlines the risks associated with using the AlgoTest website as well as such other domains, sub-domain, mobile applications or platform (hereinafter collectively referred to as “Platform”) that are owned and / or operated by Oraph Private Limited (“Company” or “Us” or “We”). The Platform allows a user to create, test and deploy trading strategies.
- Risks
The risks of using the Platform can be in the form of:- Technological Risks
- Related to the Platform’s software, including programming errors and updates that may impact functionality.
- Related to the computing and communications infrastructure, including system failures, maintenance interruptions, and software upgrades.
- Related to the user’s computer system and Internet connectivity, which may fail or perform erratically.
- Related to errors that may exist in the data used for testing the user’s strategy or the market model applied.
- Related to services provided by third-party service providers including data providers, computational services providers and network connectivity providers.
- Related to cyber-attacks and other criminal activities including malfunction or compromise of systems, misappropriation of intellectual property, theft of funds, and erratic behavior in the trading strategies
- Related to failure in the deployment of the trading strategies due to failure of the infrastructure of the cloud-based service provided. The Company upon deployment of a strategy by a user books a computation slot for the user in the infrastructure of a third-party cloud service provider. However, the cloud-based computation slot of the user may fail due to numerous reasons including failure of the network or the infrastructure of the said third-party cloud service provider.
- Related to operational and information security and related cyber security incidents. In general, cyber incidents can result from deliberate attacks or unintentional events. Cyber security attacks include but are not limited to, gaining unauthorized access to the Platform (e.g., through “hacking” or malicious software coding) for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption.
- Related to cyber-attacks which may be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on websites (i.e., efforts to make services unavailable to intended users). Cyber security incidents affecting the Platform and/or stockbrokers have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, including by interference with impediments to undertake transactions; violations of applicable privacy, data security, or other laws; regulatory fines and penalties; reputational damage; reimbursement or other compensation or remediation costs; legal fees; or additional compliance costs.
- Strategy-related Risks
- Related to the failure of the strategies to function correctly and comply with applicable rules.
- Related to trading strategies implemented in software programming code which can contain logical errors and bugs that may lead to strategy malfunctions or erroneous trade suggestions.
- Related to the user’s failure to comprehensively test any trading strategy before deployment and inability to continually monitor its performance, ensuring it complies with relevant rules.
- Related to the user’s incorrect understanding of technical indicators that may not work as expected or may contain logical errors in the interpretation of indicators and comparators.
- Deployment-related Risks
- Related to differential return due to which the user may incur losses or fail to gain profit, on the strategy as compared to how it performed in various testing undertaken in a simulated environment.
- Related to differential returns with different data sources.
- Related to the use of the Platform along with third-party services or software causing malfunctions and unexpected outcomes.
- Related to variation in factors such as the impact of the strategy’s implementation on the market, real-life variables, execution costs, broker commissions, fees, trading slippage, flash crashes and exchange outages.
- Related to challenges that were not present during testing undertaken in a simulated environment, including disallowed or rejected orders due to margin requirements, illiquid stocks, and other issues or adverse market conditions like lack of liquidity, abrupt price swings, late market openings, early closings, market chaos, and mid-day trading pauses.
- Related to failure of infrastructure, connectivity and other factors including failure or rejection or incorrect execution of the orders which may or may not be caused due to the information provided by the user.
- Related to latency within the users’ systems, stockbroker’s system, cloud-provider’s systems and the market resulting in undesirable order placements, cancellations, failures to place orders, or any other unexpected outcome.
- The occurrence of any of these risks, alone or in combination with others, could result in the loss of all funds deposited in the brokerage account used for live trading based on the strategies created, tested and run by the user on the Platform. Losses can occur more rapidly in live trading while deploying strategies compared to other trading forms. It is essential to discuss the risks of trading, especially strategic / systematic trading with an investment professional. The user deploys any strategy in live trading at his / her / its own risk, and it is the user’s responsibility to thoroughly test and monitor the deployed strategy to ensure it complies with relevant rules.
- These risks highlight the complexities and uncertainties associated with live strategic / systematic trading and the importance of safeguarding trading strategies and brokerage accounts by the users from potential threats and disruptions.