Futures Trading Risk Disclosure

Trading cryptocurrency futures on NIO Exchange the Platform involves significant risks and is intended only for experienced investors who fully understand the mechanics of leveraged products. Futures contracts enable traders to speculate on the price movements of digital assets without owning the underlying asset, which can amplify both potential gains and potential losses.

NIO Exchange provides a secure, quantum-resistant platform for trading cryptocurrency derivatives, offering high liquidity, fast execution, and comprehensive risk management tools. However, due to the inherent volatility of cryptocurrency markets, futures trading carries the risk of losses that may exceed your initial investment, including partial or total loss of funds.

This Risk Disclosure is designed to:

• Explain the unique risks of trading cryptocurrency futures.
• Inform users of their responsibilities and obligations while trading.
• Emphasize the importance of risk management, monitoring, and regulatory compliance.
• By accessing futures trading on NIO Exchange, you acknowledge that you understand and accept these risks, and that trading decisions are solely your responsibility.

1. General Risk Acknowledgment

Trading cryptocurrency futures is inherently high-risk and speculative, and users must recognize that:

• Futures are leveraged instruments, meaning small price movements can result in substantial gains or losses.
• Users may lose their entire margin and more, particularly during periods of high volatility.
• Market conditions can be unpredictable and extreme, including rapid price swings caused by news events, liquidity gaps, or market manipulation.
• Risk management tools such as stop-loss or take-profit orders may not always execute at intended prices due to slippage or liquidity constraints.
• NIO Exchange provides a secure trading environment but cannot guarantee profits or prevent losses.

Key points to consider

• Ensure you fully understand the mechanics of leveraged trading before participating.
• Only use funds that you can afford to lose without affecting your financial stability.
• Continuously monitor your positions, account balances, and market conditions.

Futures trading is not suitable for all investors, and you should carefully assess your risk tolerance, trading experience, and financial situation before engaging in any trades.

2. Leverage and Margin Risks

Futures contracts on NIO Exchange are traded on margin, allowing users to control positions larger than their account balances. While leverage can amplify gains, it also magnifies losses, sometimes beyond your initial investment.

Key considerations:

• Users must maintain sufficient margin at all times; failure to do so may trigger automatic liquidation of positions.
• Leverage ratios can increase risk, particularly in volatile markets, where even small price movements can result in rapid loss of capital.
• Margin requirements and liquidation thresholds may change without notice depending on market conditions.

Users should carefully evaluate their leverage choices, avoid excessive use of leverage, and fully understand the implications of margin calls. The use of leverage significantly increases both potential gains and potential losses, and it should only be undertaken by individuals with sufficient knowledge, experience, and risk tolerance in futures trading.

3. Market Volatility

Cryptocurrency markets are highly volatile, with prices that can fluctuate dramatically in short periods. Futures traders are particularly exposed to rapid changes, which may lead to unexpected gains or severe losses.

Key factors affecting volatility:

• Sudden news events or announcements impacting the underlying assets.
• Market-wide phenomena, such as liquidity gaps or flash crashes.
• Speculative trading activity, including large orders that can shift market prices.

Due to these factors, stop-loss and other risk management strategies may not execute at the intended price, and liquidation may occur at levels substantially different from expectations. Traders should monitor positions continuously and be prepared for unexpected market swings.

4. Liquidity Risk

Although NIO Exchange provides deep liquidity across major trading pairs, certain market conditions may limit your ability to enter or exit positions at desired prices. Liquidity risk can result in slippage, partial fills, or delays in execution.

Key points to consider:

• In periods of low liquidity, large orders may move the market, resulting in unfavorable execution prices.
• Market access may be temporarily affected by technical issues, extreme volatility, or regulatory restrictions.
• Users should consider the size of their positions relative to market depth to minimize slippage risks.

Traders are encouraged to assess market conditions carefully before placing large or leveraged positions, and use risk management strategies to protect against adverse market movements.

5. Technical and Operational Risk

NIO Exchange leverages advanced trading systems, security protocols, and infrastructure to ensure a seamless trading experience. However, all electronic trading platforms are subject to technical and operational risks that can impact execution and account access.

Key considerations:

• System failures, server outages, or network congestion may temporarily delay order execution.
• Technical errors, bugs, or failures in third-party services could result in incorrect order execution or data inaccuracies.
• Cybersecurity threats, including hacking attempts or DDoS attacks, may impact access or compromise account information.

While NIO Exchange implements industry-standard security measures, Users acknowledge that technical or operational disruptions may occur, and the Platform cannot guarantee uninterrupted trading or error-free performance. Traders should plan for contingencies and avoid relying solely on system stability.

6. Regulatory and Legal Risk

Futures trading operates in a rapidly evolving regulatory environment, and compliance requirements vary by jurisdiction. Users must understand that regulatory actions can directly affect their ability to trade or access their accounts.

Key considerations:

• Certain jurisdictions may restrict access to cryptocurrency futures or impose limitations on trading leverage.
• Users are responsible for ensuring compliance with local laws, reporting obligations, and tax requirements.
• Regulatory changes can impact market behavior, margin requirements, or trading restrictions unexpectedly.

NIO Exchange may modify or restrict trading services to comply with applicable laws, and users must remain informed of their legal obligations.

7. Margin Calls and Liquidation

Maintaining sufficient margin is critical in leveraged futures trading. Failure to meet margin requirements may result in partial or full liquidation of positions, sometimes at prices significantly different from the intended exit.

Key considerations:

• Automatic liquidation occurs without prior notice if margin falls below the required threshold.
• Liquidation prices may differ from the market price at the time of the margin call, potentially resulting in losses exceeding the account balance.
• Users should actively monitor margin levels, use stop-loss orders, and understand liquidation mechanics.

Trading on margin requires constant attention, especially during volatile periods when rapid market swings can trigger margin calls and forced liquidation.

8. Risks of Total Loss

Futures trading carries the potential for total financial loss. Due to leverage, volatility, and liquidity constraints, traders may lose more than their initial investment.

Key points:

• Futures trading is not suitable for all investors; it is appropriate only for those who can bear the risk of complete loss of invested capital.
• Losses may occur rapidly and unexpectedly, emphasizing the importance of risk management strategies.
• Users must evaluate their financial situation, experience, and risk tolerance before engaging in futures trading.

NIO Exchange encourages all traders to fully understand these risks and take appropriate measures to manage and mitigate exposure, including limiting leverage, diversifying positions, and continuously monitoring the market.

9. Risk Mitigation Measures

While futures trading is inherently risky, NIO Exchange provides tools and resources to help traders manage and mitigate potential losses. Users are encouraged to take proactive steps to protect their investments.

Key measures include:

• Stop-Loss and Take-Profit Orders: Traders can automatically close positions at predefined prices to limit losses or secure profits.
• Position Size Management: Adjusting trade sizes relative to account balance can reduce exposure to extreme market movements.
• Diversification: Spreading trades across multiple assets can help mitigate risk from a single market event.
• Continuous Monitoring: Regularly tracking open positions, market trends, and margin levels is essential.
• Educational Resources: NIO Exchange provides guides, tutorials, and market analysis tools to support informed trading decisions.

Even with these measures, users should understand that no strategy or tool can eliminate all risks, and losses may still exceed expectations.

10. Acknowledgment and Acceptance

By using NIO Exchange’s futures trading services, you acknowledge and accept that:

• Futures trading involves high risk and potential for substantial or total financial loss.
• You are solely responsible for all trading decisions, risk management, and monitoring of your account.
• NIO Exchange does not provide investment advice, guarantees, or assurances of profits.
• You have read, understood, and agreed to this Futures Trading Risk Disclosure, and will tradeonly with funds you can afford to lose.

Key responsibilities of users

• Ensure familiarity with futures trading mechanics, leverage, and liquidation processes.
• Maintain awareness of market volatility, liquidity constraints, and operational risks.
• Apply risk management strategies, including stop-loss orders and position sizing, to mitigate potential losses.
• Accept that NIO Exchange is not liable for losses resulting from market movements, technical issues, or other factors beyond its reasonable control.

By proceeding with futures trading, you explicitly consent to the terms outlined in this policy andaccept full responsibility for all associated risks.