Dawson James Securities, Inc. – Member FINRA and SIPC (hereafter referred to as “Firm”) does not make a market in any securities mentioned on this website. The Firm may perform or seek to perform investment banking services for these companies in the future. Analysts receive no direct compensation in connection with the Firm’s investment banking business.
The Firm, its officers, directors, analysts or employees may effect transactions in and have long or short positions in the securities (or options or warrants with respect thereto) mentioned herein. Analysts may be eligible for bonus compensation based on the overall profitability of the Firm, which takes into account revenues from all of the Firm’s business, including investment banking.
Although the statements of fact on this website have been obtained from and are based upon recognized statistical services, issuer reports or communications, or other sources that the Firm believes to be reliable, we cannot guarantee their accuracy. All opinions and estimates included on this website reports constitute the Firm’s judgment as of the date of publication and are subject to change without notice.
The Firm may effect transactions as principal or agent in the securities mentioned herein. The securities discussed or recommended on this website may be unsuitable for investors depending on their specific investment objectives and financial position. This website is offered for informational purposes only, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited. Additional information available upon request.
DAY TRADING RISK DISCLOSURES:
Certain Dawson James Securities, Inc. clients may, subject to suitability review, elect to engage in high volume trading patterns that would designated the account as a DayTrading Account. The following notices and disclosures apply to this form of account. Please review and contact the Dawson James Compliance Department at 1-866-928-0928 or email@example.com with any questions.
THE RISK OF LOSS IN ELECTRONIC DAY TRADING CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. IN CONSIDERING WHETHER TO TRADE, YOU SHOULD BE AWARE OF THE FOLLOWING POINTS:
(1) The national securities markets are extremely efficient and competitive. Successful Electronic Day Trading typically requires skill and discipline as well as experience and knowledge of the capital markets. There is no guarantee that you will be successful in implementing your investment strategy. A substantial number of Electronic Day Traders will not be successful. Moreover, changes in market structure and competitive conditions also may affect your continued success. Only risk capital should be used for trading. Market structure and competitive changes in the markets may cause formerly successful traders to become less successful.
(2) Electronic Day Trading involves a high volume of trading activity as the number of transactions in an account may exceed 100 per day. Each trade generates a commission and the total daily commission on such a high volume of trading can be in excess of any earnings.
(3) Persons who are new to Electronic Day trading should strictly limit both the number of trades they do and the size of their trades to reduce the risk of large dollar losses during the learning process.
(4) Electronic Day Trading is designed to produce short-term profits; however, the activity also may result in losses that can exceed more than 100% of your initial capital. You are solely responsible for any losses in your account.
(5) Placing contingent orders, such as “stop-loss” or “stop-limit” orders, will not necessarily limit your losses to the intended amounts, since market conditions on the NASDAQ or any Alternative Trading System on which the order is placed may make it impossible to execute such orders. Similarly, using “market orders” can be very risky, since large gaps can occur in price movements of active stocks. You are urged in most instances to use “limit orders.”
(6) Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a stock suddenly drops, or if trading is halted due to recent news events or unusual trading activity. The more volatile a stock is, the greater the likelihood that problems may be encountered in executing a transaction.
(7) In addition to normal market risks, you may experience losses due to system failures. The Firm and its clearing broker rely upon sophisticated computer software and hardware to execute transactions, which are subject to failure due to a variety of factors. In addition, NASDAQ and the Alternative Trading Systems have computer systems that often malfunction. Among other events, you may experience losses due to: system crashes during both peak and low volume periods; the loss of orders on both SOES and Select Net; and, delayed, conflicting and inaccurate confirmations on orders or cancellations that you initiate.
(8) The use of any margin or leverage in an account can work against you as well as for you. Leverage can lead to large losses as well as gains. You may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain a position, and you may incur losses beyond your initial investment. If the market moves against your position, you may be called upon to deposit a substantial amount of additional margin funds, on short notice, in order to maintain your position. If you do not provide the required funds within the time required, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account.
(9) You should consult your broker concerning the nature of the protections available to safeguard funds or property deposited in your account.
You should consider the following points before engaging in a day-trading strategy. For purposes of this notice, a “day-trading strategy” means an overall trading strategy characterized by the regular transmission by a customer of intra- day orders to effect both purchase and sale transactions in the same security or securities.
Day trading can be extremely risky. Day trading generally is not appropriate for someone of limited resources and limited investment or trading experience and low risk tolerance. You should be prepared to lose all of the funds that you use for day trading. In particular, you should not fund day-trading activities with retirement savings, student loans, second mortgages, emergency funds, funds set aside for purposes such as education or home ownership, or funds required to meet your living expenses. Further, certain evidence indicates that an investment of less than $50,000 will significantly impair the ability of a day trader to make a profit. Of course, an investment of $50,000 or more will in no way guarantee success.
Be cautious of claims of large profits from day trading. You should be wary of advertisements or other statements that emphasize the potential for large profits in day trading. Day trading can also lead to large and immediate financial losses. Day trading requires in-depth knowledge of securities markets. Day trading requires in- depth knowledge of the securities markets and trading techniques and strategies. In attempting to profit through day trading, you must compete with professional, licensed traders employed by securities Firms. You should have appropriate experience before engaging in day trading.
Day trading requires knowledge of a Firm’s operations. You should be familiar with a securities Firm’s business practices, including the operation of the Firm’s order execution systems and procedures. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a stock suddenly drops, or if trading is halted due to recent news events or unusual trading activity. The more volatile a stock is, the greater the likelihood that problems may be encountered in executing a transaction. In addition to normal market risks, you may experience losses due to system failures.
Day trading will generate substantial commissions, even if the per trade cost is low. Day trading involves aggressive trading, and generally you will pay commissions on each trade. The total daily commissions that you pay on your trades will add to your losses or significantly reduce your earnings. For instance, assuming that a trade costs $16 and an average of 29 transactions are conducted per day; an investor would need to generate an annual profit of $111,360 just to cover commission expenses.
Day trading on margin or short selling may result in losses beyond your initial investment. When you day trade with funds borrowed from a Firm or someone else, you can lose more than the funds you originally placed at risk. A decline in the value of the securities that are purchased may require you to provide additional funds to the Firm to avoid the forced sale of those securities or other securities in your account. Short selling as part of your daytrading strategy may lead to extraordinary losses, because you may have to purchase a stock at a very high price in order to cover a short position.
Potential Registration Requirements. Persons providing investment advice for others or managing securities accounts for others many need to register as either an Investment Advisor under the Investment Advisors Act of 1940 or as a Broker or Dealer under the Securities Exchange Act of 1934. Such activities may also trigger state registration requirements.
EXTENDED HOURS TRADING RISK DISCLOSURE
ALL OF THE POINTS NOTED ABOVE APPLY TO ELECTRONIC DAY TRADING OF DOMESTIC EQUITY SECURITIES. IF YOU ARE CONTEMPLATING TRADING FUTURES OR OPTIONS CONTRACTS, YOU SHOULD BE AWARE THAT THESE INSTRUMENTS POSSESS ADDITIONAL RISKS.
THE RISK OF ELECTRONIC DAY TRADING MAY BE SUBSTANTIAL. THIS BRIEF STATEMENT CANNOT, OF COURSE, DISCLOSE ALL THE RISKS AND OTHER ASPECTS OF ELECTRONIC DAY TRADING. ONLY RISK CAPITAL SHOULD BE USED FOR SUCH TRADING.
Risk of Lower Liquidity. Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more orders that are available in a market, the greater the liquidity. Liquidity is important because with greater liquidity it is easier for investors to buy or sell securities, and as a result, investors are more likely to pay or receive a competitive price for securities purchased or sold. There may be lower liquidity in extended hours trading as compared to regular market hours. As a result, your order may only be partially executed, or not at all.
Risk of Higher Volatility . Volatility refers to the changes in price that securities undergo when trading. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility in extended hours trading than in regular market hours. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price in extended hours trading than you would during regular market hours.
Risk of Changing Prices. The prices of securities traded in extended hours trading may not reflect the prices either at the end of regular market hours, or upon the opening the next morning. As a result, you may receive an inferior price in extended hours trading than you would during regular market hours.
Risk of Unlinked Markets . Depending on the extended hours trading system or the time of day, the prices displayed on a particular extended hours trading system may not reflect the prices in other concurrently operating extended hours trading systems dealing in the same securities. Accordingly, you may receive an inferior price in one extended hours trading system than you would in another extended hours trading system.
Risk of News Announcements. Normally, issuers make news announcements that may affect the price of their securities after regular market hours. Similarly, important financial information is frequently announced outside of regular market hours. In extended hours trading, these announcements may occur during trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.
Risk of Wider Spreads. The spread refers to the difference in price between what you can buy a security for and what you can sell it for. Lower liquidity and higher volatility in extended hours trading may result in wider than normal spreads for a particular security.
STATEMENT BY CHAIRMAN ARTHUR LEVITT SECURITIES AND EXCHANGE COMMISSION CONCERNING ON-LINE TRADING
JANUARY 27, 1999
Chairman Arthur Levitt today issued the following statement to investors:
The Internet and other new technologies are in many ways transforming how our capital markets operate. There are clear benefits to these changes including lower costs and faster access to the market for investors. I believe that investors need to remember the investment basics, and not allow the ease and speed with which they can trade to lull them either into a false sense of security or encourage them to trade too quickly or too often. Over the last two years, particularly in recent months, the SEC has been hearing concerns about retail, on-line (Internet) investing. In fact, the number of complaints concerning on-line investing has increased 330 percent in the last year. Some of the issues raised specifically relate to on-line trading, others are generic to all investing. The majority of them can be addressed through better education and investors ensuring that they have done their homework. Every day, more and more Americans are investing in the stock market, and many of them are doing so through the Internet. On-line brokerage accounts account for approximately 25 percent of all retail stock trades. And, the number of on-line brokerage accounts is expected to exceed 10 million by the end of the year.
While the manner in which orders are executed may be changing, the time-honored principles of evaluating a stock have not. An investor’s consideration of the fundamentals of a company-net earnings, P/E ratios, the products or services offered by the company-should never lose their underlying importance. Investing in the stock market-however you do it and however easy it may be-will always entail risk. I would be very concerned if investors allow the ease with which they can make trades to shortcut or bypass the three golden rules for all investors: (1) Know what you are buying; (2) Know the ground rules under which you buy and sell a stock or bond; and (3) Know the level of risk you are undertaking. On-line investors should remember that it is just as easy, if not more, to lose money through the click of a button as it is to make it.
In recent months, we have begun to identify a number of issues every on-line investor should be aware of. First, investors must understand the issues and limitations of on-line investing. You may occasionally experience delays on these new systems. Demand has grown so quickly that many Firms are racing to keep pace with it. In the meantime, you may have trouble getting on-line or receiving timely confirmations of trade executions. You should not always expect “instantaneous” execution and reporting. There can and will be delays in electronic systems. You should investigate and understand options and alternatives to executing and confirming your orders if you encounter on-line problems.
Second, investors may sometimes be surprised at how quickly stock prices actually move. For example, many technology stocks have recently had dramatic and rapid price movements. When many investors attempt to purchase (or sell) the same stock at the same time, the price can move very quickly. Just because you see a price on your computer screen doesn’t mean that you will always be able to get that price in a rapidly changing market. You should take precautions to ensure that you do not end up paying much more for a stock than you intended or can afford.
One way to do this is to use limit orders rather than market orders when submitting a trade in a “hot” stock. The result for investors that do not limit their risk can be quite surprising. Say an investor wanted to buy a stock in an IPO that was trading earlier at $9.00 and failed to specify the maximum they were willing to pay using a limit order. That investor could end up paying whatever price the stock has moved to at the time his order reaches the market — $60, $90 or even more. If, on the other hand, the investor submitted a limit order to buy the stock at $11.00 or less, the order would only be executed if the market price had not moved past that level. Investors should understand the risk associated with trading in a rapidly moving market and make sure that they take all possible actions to control their risk.
Third, I am concerned that investors buying securities on margin may not fully understand the risks involved. In volatile markets, investors who have put up an initial margin payment for a stock may find themselves being required to provide additional cash (maintenance margin) if the price of the stock subsequently falls. If the funds are not paid in a timely manner, the brokerage Firm has the right to sell the securities and charge any loss to the investor. When you buy stock on margin, you are borrowing money.
And as the stock price changes, you may be required to increase the cash investment. Simply put, you should make sure that you do not over-extend.
Fourth, while new technology available to retail investors may resemble that of professional traders, retail investors should exercise caution before imitating the style of trading and risks undertaken by market professionals. For most individuals, the stock market should be used for investment not trading. Strategies such as day trading can be highly risky, and retail investors engaging in such activities should do so with funds they can afford to lose. I am very concerned when I hear of stories of student loan money, second mortgages or retirement funds being used to engage in this type of activity. Investment should be for the long-run, not for minutes or hours.
Millions of new investors have taken advantage of the unprecedented access and individual control the Internet provides. But, new opportunities present all of us with new responsibilities, challenges and risks. The SEC will do everything it can to protect and inform investors during this time of great innovation and change. But, investor protection-at its most basic and effective level-starts with the investor. I say to all investors-whether you invest on-line, on the phone, or in-person-know what you are buying, what the ground rules are, and what level of risk you are assuming.
MARGIN RISK DISCLOSURES
Certain Dawson James Securities, Inc. clients may, subject to suitability review, elect to establish margin accounts with the Firm. The following notices and disclosures apply to this form of account. Please review and contact the Dawson James Compliance Department at 1-866-928-0928 or firstname.lastname@example.org with any questions:
Margin Disclosure Statement
We are furnishing this document to you to provide some basic facts about purchasing securities on margin, and to alert you to the risks involved with trading securities in a margin account. Before trading stocks in a margin account, you should carefully review the margin agreement provided by your broker. Consult your broker regarding any questions or concerns you may have with your margin accounts. When you purchase securities, you may pay for the securities in full or you may borrow part of the purchase price from your brokerage Firm. If you choose to borrow funds from your Firm, you will open a margin account with the Firm. The securities purchased are the Firm’s collateral for the loan to you. If the securities in your account decline in value, so does the value of the collateral supporting your loan, and as a result, the Firm can take action, such as issue a margin call and/or sell securities in your account, in order to maintain the required equity in the account. It is important that you fully understand the risks involved in trading securities on margin. These risks include the following:
You can lose more funds than you deposit in the margin account.
A decline in the value of securities that are purchased on margin may require you to provide additional funds to the Firm that has made the loan to avoid the forced sale of those securities or other securities in your account.
The Firm can force the sale of securities in your account.
If the equity in your account falls below the maintenance margin requirements under the law, or the Firm’s higher “house” requirements, the Firm can sell the securities in your account to cover the margin deficiency. You also will be responsible for any shortfall in the account after such a sale.
The Firm can sell your securities without contacting you.
Some investors mistakenly believe that a Firm must contact them for a margin call to be valid, and that the Firm cannot liquidate securities in their accounts to meet the call unless the Firm has contacted them first. This is not the case. Most Firms will attempt to notify their customers of margin calls, but they are not required to do so. However, even if a Firm has contacted a customer and provided a specific date by which the customer can meet a margin call, the Firm can still take necessary steps to protect its financial interest, including immediately selling the securities without notice to the customer.
You are not entitled to choose which security in your margin account is liquidated or sold to meet a margin call.
Because the securities are collateral for the margin loan, the Firm has the right to decide which security to sell in order to protect its interests.
You are not entitled to an extension of time on a margin call.
While an extension of time to meet margin requirements may be available to customers under certain conditions, a customer does not have a right to the extension.
The Firm can increase its “house” maintenance margin requirement at any time and is not required to provide you advance written notice.
These changes in Firm policy often take effect immediately and may result in the issuance of a maintenance margin call. Your failure to satisfy the call may cause the member to liquidate securities in your account.
OPTION EDUCATION AND RISK DISCLOSURES:
Option trading may involve sophisticated strategies that require a full understanding of the related intricacies and risks. In that regard, prior to permitting a client to engage in options trading, we require an affirmation that the Options Clearing Corporations (OCC) publication entitled, Characteristics and Risks of Standardized Options has been reviewed. The document is available on the OCC website, at the following address:
You may also request a copy of the document by calling our Compliance Department at (561) 391-5555. Furthermore, our clients must accept responsibility to ascertain if any corporate actions occur that will affect their option contracts positions. This information is available by accessing the OCC site at:
www.optionsclearing.com/market/info_memos.jsp We believe that best source of option education is available through the Chicago Board Options Exchange (CBOE). Their website provides extensive information and tools for the options trader. Please select the links below to be connected directly to the CBOEs site:
For basic option information:
The Options Toolbox is an interactive educational program designed to enhance investors’ knowledge of exchange-traded equity options, index options and LEAPS. This comprehensive tutorial contains educational sessions and tools, including an options calculator, to help investors test their ideas:
The new Index WorkbenchSM is designed to help investors learn more about ways in which index options can be used:
This FAQ list represents some of the most frequently asked questions relating to the Chicago Board Options Exchange and options trading in general:
DAWSON JAMES SECURITIES, INC. STATEMENT OF PAYMENT FOR ORDERFLOW
Dawson James Securities, Inc. currently does not accept payment for orderflow.
Dawson James Securities, Inc.’s Business Continuity Planning
Dawson James Securities, Inc. has developed a Business Continuity Plan on how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, we are providing you with this information on our business continuity plan.
Contacting Us – If after a significant business disruption you cannot contact us as you usually do at (561) 391-5555 or (866) 928-0928, you should call our alternative number, being our Dayton, MD office at (410) 986-0369 or check our website at www.dawsonjames.com for alternate contact announcements. If you cannot access us through either of those means, you should contact our clearing firm, StoneX Financial Inc. at (800) 778-6257 for instructions on how they may provide prompt access to funds and securities, enter orders and process other trade-related, cash, and security transfer transactions.
Our Business Continuity Plan – We plan to quickly recover and resume business operations after a significant business disruption and respond by safeguarding our employees and property, making a financial and operational assessment, protecting the Firm’s books and records, and allowing our customers to transact business. In short, our business continuity plan is designed to permit our Firm to resume operations as quickly as possible, given the scope and severity of the significant business disruption.
Our business continuity plan addresses: data backup and recovery; all mission critical systems; financial and operational assessments; alternative communications with customers, employees, and regulators; alternate physical location of employees; critical supplier, contractor, bank and counter-party impact; regulatory reporting; and assuring our customers prompt access to their funds and securities if we are unable to continue our business.
Our clearing firm, StoneX Financial Inc. backs up our important records in a geographically separate area. While every emergency situation poses unique problems based on external factors, such as time of day and the severity of the disruption, we have been advised by our clearing firm that its objective is to restore its own operations and be able to complete existing transactions and accept new transactions and payments as soon as possible. Your orders and requests for funds and securities could be delayed during this period.
Varying Disruptions – Significant business disruptions can vary in their scope, such as only our Firm, a single building housing our Firm, the business district where our Firm is located, the city where we are located, or the whole region. Within each of these areas, the severity of the disruption can also vary from minimal to severe. In a disruption to only our Firm or a building housing our Firm, we will transfer our operations to a local site when needed and expect to recover and resume business within 24 hours. In a disruption affecting our business district, city, or region, we will transfer our operations to a site outside of the affected area, and recover and resume business within 48 hours. In either situation, we plan to continue in business, transfer operations to our clearing firm if necessary, and notify you through our website, www.dawsonjames.com or our customer emergency number, (410) 986-0369 as to how to contact us. If the significant business disruption is so severe that it prevents us from remaining in business, we will assure our customer’s prompt access to their funds and securities.
For more information – If you have questions about our business continuity planning, you can contact us our Compliance Department by calling (866) 928-0928, via our website at www.dawsonjames.com, or via mail at:
Dawson James Securities, Inc.
101 North Federal Highway – Suite 600
Boca Raton, FL 33432