Bull Market Securities, Inc (“BMS” or the “Firm”) works with its registered representatives and associated persons to ensure clients have access to full, fair and clear disclosure necessary to properly assess their portfolio and investment alternatives. As part of that effort, this page contains documents and/or links that provide regulatory and educational information related to specific product types, which may be provided to the Firm customers in hardcopy and/or electronic format. The following items are a representative sample of the types of disclosure information BMS will provide investors in relation to specific products and investments. Additional product specific disclosure requirements are outlined in the Firm’s written supervisory procedures under each product type.
Prior to investing in bonds investors should consider the following:
For more information related to these questions, as well as further details related to bond products and associated risks should be directed to a BMS registered representative. Additionally, the Firm has provided links to various product brochures that describe the unique risks and characteristics associated with Corporate Bonds, and Treasury Securities. BMS has provided this information for informational purposes and encourages all investors to review such documents prior to making an investment decision in these securities.
Money Market Instruments Money Market Instruments are debt instruments issued by private organizations, governments and government agencies. The money market is a highly liquid professional dealer market that facilitates the transfer of funds (generally in very large denominations) between borrowers and lenders. It generally relates to those instruments that allow for borrowing and lending periods ranging from one day to one year. Although money market instruments carry less risk than long-term debt they are not completely without risk. Different instruments carry varying degrees of risk depending on the nature of the lending agreement and the identity of the lender. Potential investors should be aware of such details prior to entering into any money market transactions. Common money market instruments include: Exchequer Notes, Commercial Paper, Treasury Bills, Repurchase Agreements and Bankers Acceptances. In general other than the cost of acquiring money market instruments, investors are not subject to any margin requirements or financial commitments/liabilities. The value of money market instruments may fall as well as rise and therefore when investing in such instruments there is a risk that you may lose some or all of your original investment.
Investment companies include open-end and closed-end investment companies commonly referred to as “mutual funds”. Shares in investment companies represent interests in professionally managed portfolios. These investments involve substantially the same risks as investing directly in the underlying instruments; in addition, the return from such an investment will be reduced by the operating expenses and fees of the investment company, including applicable advisory fees. Certain types of investment companies, such as closed-end funds, issue a fixed number of shares that trade on a stock exchange or over-the-counter at a premium or discount to their net asset value (“NAV”) per share. This premium or discount may change from time to time. Other investment companies are continuously offered at NAV, but are also traded in the secondary market.
Mutual funds that have front-end sales charges may offer discounts for larger investments; the amounts at which these discounts become available are called "breakpoints." In order to research eligibility for a breakpoint discount, FINRA has created the Mutual Fund Breakpoint Search Tool. This tool allows you to look up breakpoint schedules and linkage rules for mutual funds with sales charges to ensure discounts are given where applicable. Tool to help you compare how sales loads, fees, commissions, and other fund expenses can reduce returns on mutual fund investments. Even small differences in expenses can make a big difference in your return over time.
In an effort to provide further information related to mutual fund characteristics and risks, Bull Market has also provided links to the following regulatory related information and disclosures:
Equity securities include common stocks, preferred stocks, convertible securities and mutual funds that invest in these securities. Equity markets can be volatile and involve varying degrees of risks. Stock prices rise and fall based on changes in an individual company’s financial condition and overall market conditions amongst other factors. Stock prices can decline significantly in response to adverse market conditions, company-specific events, and other domestic and international political and economic developments. For further general information related to this product class and risks associated with trading strategies, Bull Market Securities is providing the following regulatory links:
Transactions in options carry a high degree of risk. Purchasers and sellers of options should familiarize themselves with the type of option (i.e. put or call) which they contemplate trading and the associated risks. You should calculate the extent to which the value of options must increase for your position to become profitable, taking into account the premium and all transaction costs. The purchaser of options may offset or exercise the options or allow the options to expire. The exercise of an option results either in a cash settlement or in the purchaser acquiring or delivering the underlying interest. If the option is on a future, the purchase will acquire a futures position with associated liabilities for margin (see the section on Futures above). If the purchase options expire worthless, you will suffer a total loss of your investment, which will consist of the option premium plus transaction costs. If you are contemplating purchasing deep-out-of-the-money options, you should be aware that the chance of such options becoming profitable ordinarily is remote. Selling (“writing“ or “granting“) an option generally entails considerably greater risk than purchasing options. Although the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will be liable for additional margin to maintain the position if the market moves unfavorably. The seller will also be exposed to the risk of the purchaser exercising the option and the seller will be obligated to either settle the option in cash or to acquire or deliver the underlying interest. If the option is on a future, the seller will acquire a position in a future with associated liabilities for margin (see the section on Futures above). If the position is “covered” by the seller holding a corresponding position in the underlying interest or a future or another option, the risk may be reduced. If the option is not covered, the risk of loss can be unlimited. Certain exchanges in some jurisdictions permit deferred payment of the option premium, exposing the purchaser to liability for margin payments not exceeding the amount of the premium. The purchaser is still subject to the risk of losing the premium and transaction costs. When the option is exercised or expires, the purchaser is responsible for any unpaid premium outstanding at that time.
Options are not suitable for all investors. There are risks involved in any option strategy. Individuals should not enter into option transactions until they have read and understood the option disclosure document titled "Characteristics and Risks of Standardized Options," which outlines the purposes and risks of option transactions. This booklet is available from your Bull Market Securities registered representative or at OCC - Characteristics & Risks of Standardized Options. Supporting documentation of claims will be supplied upon request. Further information and tools to assist in analyzing options risks are also available via the following regulatory links:
Investments in foreign securities involve certain risks that differ from the risks of investing in domestic securities. Adverse political, economic, social or other conditions in a foreign country may make the stocks of that country difficult or impossible to sell. It is more difficult to obtain reliable information about some foreign securities. The costs of investing in some foreign markets may be higher than investing in domestic markets. Investments in foreign securities also are subject to currency fluctuations.
We seek to reduce these risks by investing in foreign securities typically through ADRs. ADRs are certificates deposited with a U.S. bank that represent the right to own a foreign security. Since ADRs are traded in U.S. markets and the issuers are subject to the same auditing, accounting and financial reporting standards as domestic securities, owning ADRs has advantages over owning other foreign securities. For further information and other risk considerations related to international investing please review Bull Market Securities Risks of International Investing disclosure.
Purchasing structured products involves derivatives and a higher degree of risk factors that may not be suitable for all investors. Such risks include, but are not limited to risk of adverse or unanticipated market developments/conditions, issuer credit quality risk, risk of counterparty or issuer default, risk of lack of uniform standard pricing, risk of adverse events involving any underlying reference obligations, entity or other measure, risk of high volatility, and risk of illiquidity/ little to no secondary market, amongst other items. In certain transactions, investors may lose their entire investment, i.e., incur an unlimited loss. As such prior to investing in any structured product investors should ensure they have received, reviewed and understood the term sheets for official details on all offerings, including risks involved, before investing in structured products. For further risk details and other considerations related to structured products please review Bull Market Securities – Structured Product Risk Disclosure and Considerations.
Bull Market Securities – Structured Product Risk Disclosure and Considerations
The Financial Industry Regulatory Authority (FINRA) Rule 2341 requires Applicants to post this document on a public section of their website. The document contains some basic information about the facts and risk associated with a margin account.
Additional information regarding margin characteristics and risk are available via the following link: