Risk Disclosure Statement

The risk of loss in trading commodity futures contracts can be substantial. You should, therefore, carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should be aware of the following points:(1)You may sustain a total loss of the funds that you deposit with your broker to establish or maintain a position in the commodity futures market, and you may incur losses beyond these amounts. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional  margin  funds,  on  short  notice,  in  order  to  maintain  your  position.  If  you  do  not  providethe required funds within the time required by your broker, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account.(2) The  funds  you  deposit  with  a  futures  commission  merchant  for  trading  futures  positions  are  not protected by insurance in the event of the bankruptcy or insolvency of the futures commission merchant, or in the event your funds are misappropriated.(3)The  funds  you  deposit  with  a  futures  commission  merchant  for  trading  futures  positions are  not protected  by  the  Securities  Investor  Protection  Corporation  even  if  the  futures  commission  merchant  is registered with the Securities and Exchange Commission as a broker or dealer.(4)The funds you deposit with a futures commission merchant are generally not guaranteed or insured by a derivatives clearing organization in the event of the bankruptcy or insolvency of the futures commission merchant,  or  if  the  futures  commission  merchant  is  otherwise  unable  to  refund  your  funds.  Certain derivatives  clearing  organizations,  however,  may  have  programs  that  provide  limited  insurance  to customers. You should inquire of your futures commission merchant whether your funds will be insured by a  derivatives  clearing  organization  and  you  should  understand  the  benefits  and  limitations  of  such insurance programs.(5)The  funds  you  deposit  with  a  futures  commission  merchant  are  not  held  by  the  futures  commission merchant in a separate account for your individual benefit. Futures commission merchants commingle the funds received from customers in one or more accounts and you may be exposed to losses incurred by other customers if the futures commission merchant does not have sufficient capital to cover such other customers’ trading losses.(6)The funds you deposit with a futures commission merchant may be invested by the futures commission merchant  in  certain  types  of  financial  instruments  that  have  been  approved  by  the  Commission  for  the purpose of such investments. Permitted investments are listed in Commission Regulation 1.25 and include: U.S. government securities; municipal securities; money market mutual funds; and certain corporate notes and bonds. The futures commission merchant may retain the interest and other earnings realized from its investment of customer funds. You should be familiar with the types of financial instruments that a futures commission merchant may invest customer funds in.

150 S. Wacker, 12THFloor   |   Chicago, IL 60606   |   888.280.80202(7)Futures commission merchants are permitted to deposit customer funds with affiliated entities, such as affiliated banks, securities brokers or dealers, or foreign brokers. You should inquire as to whether yourfutures  commission  merchant  deposits  funds  with  affiliates  and  assess  whether  such  deposits  by  the futures commission merchant with its affiliates increases the risks to your funds.(8)You  should  consult  your  futures  commission  merchant  concerning  the  nature  of  the  protections available to safeguard funds or property deposited for your account.(9)Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market reaches a daily price fluctuation limit (“limit move”).(10)All futures positions involve risk, and a “spread” position may not be less risky than an outright “long” or “short” position.(11)The high degree of leverage (gearing) that is often obtainable in futures trading because of the small margin requirements can work against you as well as for you. Leverage (gearing) can lead to large losses as well as gains.(12)In addition to the risks noted in the paragraphs  enumerated above, you should be familiar with the futures commission merchant you select to entrust your funds for trading futures positions. The Commodity Futures Trading Commission requires each futures commission merchant to make publicly available on its Web  site  firm  specific  disclosures  and  financial  information  to  assist  you  with  your  assessment  and selection of a futures commission merchant. Information regarding this futures commission merchant may be obtained by visitingthe Agreementssection of the secure portion of our website, www.option2pro.com.ALL  OF  THE  POINTS  NOTED  ABOVE  APPLY  TO  ALL  FUTURES  TRADING  WHETHER  FOREIGN  OR DOMESTIC.  IN  ADDITION,  IF  YOU  ARE  CONTEMPLATING  TRADING  FOREIGN  FUTURES  OR  OPTIONS CONTRACTS, YOU SHOULD BE AWARE OF THE FOLLOWING ADDITIONAL RISKS:(13)Foreign futures transactions involve executing and clearing trades on a foreign exchange. This is the case even if the foreign exchange is formally “linked” to a domestic exchange, whereby a trade executed on  one  exchange  liquidates  or  establishes  a  position  on  the  other  exchange.  No  domestic  organization regulates the activities of a foreign exchange, including the execution, delivery, and clearing of transactions on such an exchange, and no domestic regulator has the power to compel enforcement of the rules of the foreign exchange or the laws of the foreign country. Moreover, such laws or regulations will vary depending on the foreign country in which the transaction occurs. For these reasons, customers who trade on foreign exchanges may not be afforded certain of the protections which apply to domestic transactions, including the  right  to  use  domestic  alternative  dispute  resolution  procedures.  In  particular,  funds  received  from customers  to  margin  foreign  futures  transactions  may  not  be  provided  the  same  protections  as  funds received to margin futures transactions on domestic exchanges. Before you trade, you should familiarize yourself with the foreign rules which will apply to your particular transaction.(14)Finally, you should be aware that the price of any foreign futures or option contract and, therefore, the potential profit and loss resulting therefrom, may be affected by any fluctuation in the foreign exchange rate between the time the order is placed and the foreign futures contract is liquidated or the foreign option contract is liquidated or exercised.THIS  BRIEF  STATEMENT  CANNOT,  OF  COURSE,  DISCLOSE  ALL  THE  RISKS  AND  OTHER  ASPECTS  OF THE COMMODITY MARKETS.

150 S. Wacker, 12THFloor   |   Chicago, IL 60606   |   888.280.80203Options Disclosure StatementBECAUSE OF THE VOLATILE NATURE OF THE COMMODITIES MARKETS, THE PURCHASE AND GRANTING OF COMMODITY OPTIONS INVOLVE A HIGH DEGREE OF RISK. COMMODITY OPTION TRANSACTIONS ARE NOT  SUITABLE  FOR  MANY  MEMBERS  OF  THE  PUBLIC.  SUCH  TRANSACTIONS  SHOULD  BE ENTERED INTO ONLY BY  PERSONS  WHO HAVE  READ AND UNDERSTOOD  THIS  DISCLOSURE  STATEMENT AND WHO UNDERSTAND THE NATURE AND EXTENT OF THEIR RIGHTS AND OBLIGATIONS AND OF THE RISKS INVOLVED IN THE OPTION TRANSACTIONS COVERED BY THIS DISCLOSURE STATEMENT.BOTH THEPURCHASER AND THE GRANTOR SHOULD KNOW THAT THE OPTION IF EXERCISED, RESULTS IN THE ESTABLISHMENT OF A FUTURES CONTRACT (AN “OPTION ON A FUTURES CONTRACT”).BOTH THE PURCHASER AND THE GRANTOR SHOULD KNOW WHETHER THE PARTICULAR OPTION IN WHICH  THEY  CONTEMPLATE  TRADING  IS  SUBJECT  TO  A  “STOCK-STYLE”  OR  “FUTURES-STYLE” SYSTEM OF MARGINING. UNDER A STOCK-STYLE MARGINING SYSTEM, A PURCHASER IS REQUIRED TO PAY  THE  FULL  PURCHASE  PRICE  OF  THE  OPTION AT  THE  INITIATION OF  THE  TRANSACTION.  THE PURCHASER  HAS  NO  FURTHER OBLIGATION  ON  THE  OPTION  POSITION.  UNDER  A  FUTURES-STYLE MARGINING SYSTEM, THE PURCHASER DEPOSITS INITIAL MARGIN AND MAY BE REQUIRED TO DEPOSIT ADDITIONAL  MARGIN  IF  THE  MARKET  MOVES  AGAINST  THE  OPTION  POSITION.  THE  PURCHASER’S TOTAL SETTLEMENT VARIATION MARGIN OBLIGATION OVER THE LIFE OF THE OPTION, HOWEVER, WILL NOT EXCEED THE ORIGINAL OPTION PREMIUM, ALTHOUGH SOME INDIVIDUAL PAYMENT OBLIGATIONS AND/OR  RISK  MARGIN  REQUIREMENTS  MAY  AT  TIMES  EXCEED  THE  ORIGINAL  OPTION  PREMIUM.  IF THE  PURCHASER  OR  GRANTOR  DOES  NOT  UNDERSTAND  HOW  OPTIONS  ARE  MARGINED  UNDER  A STOCK-STYLE   OR   FUTURES-STYLE   MARGINING   SYSTEM,   HE   OR   SHE   SHOULD   REQUEST   AN EXPLANATION  FROM  THE  FUTURES  COMMISSION  MERCHANT  (“FCM”)  OR  INTRODUCING  BROKER (“IB”).A  PERSON  SHOULD  NOT  PURCHASE  ANY  COMMODITY  OPTION  UNLESS  HE  OR  SHE  IS  ABLE  TO SUSTAIN A TOTAL LOSS OF THE PREMIUM AND TRANSACTION COSTS OF PURCHASING THE OPTION. A  PERSON  SHOULD  NOT  GRANT  ANY  COMMODITY  OPTION  UNLESS  HE  OR  SHE  IS  ABLE  TO  MEET ADDITIONAL CALLS FOR MARGIN WHEN THE MARKET MOVES AGAINST HIS OR HER POSITION AND, IN SUCH CIRCUMSTANCES, TO SUSTAIN A VERY LARGE FINANCIAL LOSS.A PERSON WHO PURCHASES AN OPTION SUBJECT TO STOCK-STYLE MARGINING SHOULD BE AWARE THAT, IN ORDER TO REALIZE ANY VALUE FROM THE OPTION, IT WILL BE NECESSARY EITHER TO OFFSET THE  OPTION  POSITION  OR  TO  EXERCISE  THE  OPTION.  OPTIONS  SUBJECTTO  FUTURES-STYLE MARGINING ARE MARKED TO MARKET, AND GAINS AND LOSSES ARE PAID AND COLLECTED DAILY. IF AN  OPTION  PURCHASER  DOES  NOT  UNDERSTAND  HOW  TO  OFFSET  OR  EXERCISE  AN  OPTION,  THE PURCHASER  SHOULD  REQUEST  AN  EXPLANATION  FROM  THE  FCM  OR  IB.  CUSTOMERS  SHOULD  BE AWARE  THAT  IN  A  NUMBER  OF  CIRCUMSTANCES,  SOME  OF  WHICH  WILL  BE  DESCRIBED  IN  THIS DISCLOSURE  STATEMENT,  IT  MAY  BE  DIFFICULT  OR  IMPOSSIBLE  TO  OFFSET  AN  EXISTING  OPTION POSITION ON AN EXCHANGE.THE GRANTOR OF AN OPTION SHOULD BE AWARE THAT, IN MOST CASES, A COMMODITY OPTION MAY BE EXERCISED AT ANY TIME FROM THE TIME IT IS GRANTED UNTIL IT EXPIRES. THE PURCHASER OF AN OPTION SHOULD BE AWARE THAT SOME OPTION CONTRACTS MAY PROVIDE ONLY A LIMITED PERIOD OF TIME FOR EXERCISE OF THE OPTION.

150 S. Wacker, 12THFloor   |   Chicago, IL 60606   |   888.280.80204THE PURCHASER OF A PUT OR CALL SUBJECT TO STOCK-STYLE OR FUTURES-STYLE MARGINING IS SUBJECT  TO  THE  RISK  OF  LOSING  THE  ENTIRE  PURCHASE  PRICE  OF  THE  OPTION—THAT  IS,  THE PREMIUM CHARGED FOR THE OPTION PLUS ALL TRANSACTION COSTS.THE  COMMODITY  FUTURES TRADING  COMMISSION  REQUIRES THAT ALL  CUSTOMERS RECEIVE  AND ACKNOWLEDGE RECEIPT OF A COPY OF THIS DISCLOSURE STATEMENT BUT DOES NOT INTEND THIS STATEMENT  AS  A  RECOMMENDATION  OR  ENDORSEMENT  OF  EXCHANGE-TRADED  COMMODITY OPTIONS.(1)Some of the risks of option trading.Specific market movements of the underlying future cannot be predicted accurately.The grantor of a call option who does not have a long position in the underlying futures contract is subject to  risk  of  loss  should  the  price  of  the  underlying  futures  contract  be  higher  than  the  strike  price  upon exercise or expiration of the option by an amount greater than the premium received for granting the call option.The grantor of a call option who has a longposition in the underlying futures contract is subject to the full risk of a decline in price of the underlying position reduced by the premium received for granting the call. In  exchange  for  the  premium  received  for  granting  a  call  option,  the  option  grantor  gives  up  all  of  the potential gain resulting from an increase in the price of the underlying futures contract above the option strike price upon exercise or expiration of the option.The grantor of a put option who does not have a short position in the underlying futures contract is subject to  risk  of  loss  should  the  price  of  the  underlying  futures  contract  decrease  below  the  strike  price  upon exercise or expiration of the option by an amount in excess of the premium received for granting the put option.The grantor of a put option on a futures contract who has a short position in the underlying futures contract is subject to the full risk of a rise in the price in the underlying position reduced by the premium received for granting the put. In exchangefor the premium received for granting a put option on a futures contract, the option grantor gives up all of the potential gain resulting from a decrease in the price of the underlying futures contract below the option strike price upon exercise or expiration of the option.(2)Description of commodity options.Prior  to  entering  into  any  transaction  involving  a  commodity  option,  an  individual  should  thoroughly understand  the  nature  and  type  of  option  involved  and  the  underlying  futures  contract.  The  futures commission  merchant  or  introducing  broker  is  required  to  provide,  and  the  individual  contemplating  an option transaction should obtain:(i)An identification of the futures contract underlying the option and which may be purchased or sold upon exercise of the option or, if applicable, whether exercise of the option will be settled in cash;(ii)The procedure for exercise of the option contract, including the expiration date and latest time on that date  for  exercise.  (The  latest  time  on  an  expiration  datewhen  an  option  may  be  exercised  may  vary; therefore,  option  market  participants  should  ascertain  from  their  futures  commission  merchant  or  their introducing  broker  the  latest  time  the  firm  accepts  exercise  instructions  with  respect  to  a  particular option.);

150 S. Wacker, 12THFloor   |   Chicago, IL 60606   |   888.280.80205(iii)A description of the purchase price of the option including the premium, commissions, costs, fees and other  charges.  (Since  commissions  and  other  charges  may  vary  widely  among  futures  commission merchants and among introducing brokers, option customers may find it advisable to consult more than one firm when opening an option account.);(iv)A description of all costs in addition to  the purchase price which  may be incurred  if the commodity option  is  exercised,  including  the  amount  of  commissions  (whether  termed  sales  commissions  or otherwise), storage, interest, and all similar fees and charges which may be incurred;(v)An explanation and understanding of the option margining system;(vi)A clear explanation and understanding of any clauses in the option contract and of any items included in the option contract explicitly or by reference which might affect the customer’s obligations under the contract. This would include any policy of the futures commission merchant or the introducing broker or ruleof  the  exchange  on  which  the  option  is  traded  that  might  affect  the customer’s  ability  to  fulfill  the option  contract  or  to  offset  the  option  position  in  a  closing  purchase  or closing  sale  transaction  (for example, due to unforeseen circumstances that require suspension or termination of trading); and(vii)If applicable, a description of the effect upon the value of the option position that could result from limit moves in the underlying futures contract.(3)The mechanics of option trading.Before entering into any exchange-traded option transaction, an individual should obtain a description of how commodity options are traded.Option customers should clearly understand that there is no guarantee that option positions may be offset by  either  a  closing  purchase  or  closing  sale  transaction  on  an  exchange.  In  this  circumstance,  option grantors  could  be  subject  to  the  full  risk  of  their  positions  until  the  option  position  expires,  and  the purchaser of a profitable option might have to exercise the option to realize a profit.For  an  option  on  a  futures  contract,  an  individual  should  clearly  understand  the  relationship  between exchange  rules  governing  option  transactions  and  exchange  rules  governing  the  underlying  futures contract. For example, an individual should understand what action, if any, the exchange will take in the option market if trading in the underlying futures market is restricted or the futures prices have made a “limit move.”The individual should understand that the option may not be subject todaily price fluctuation limits while the underlying futures may have such limits, and, as a result, normal pricing relationships between options and the underlying future may not exist when the future is trading at its price limit. Also, underlying futures positions resulting from exercise of options may not be capable of being offset if the underlying future is at a price limit.(4)Margin requirements. An individual should know and understand whether the option he or she is contemplating trading is subject to a stock-style or futures-style system of margining. Stock-style margining requires the purchaser to pay the full option premium at the time of purchase. The purchaser has no further financial obligations, and the risk  of  loss  is  limited  to  the  purchase  price  and  transaction  costs.  Futures-style  margining  requires  the purchaser to pay initial margin only at the time of purchase. The option position is marked to market, and gains and losses are collected and paid daily. The purchaser’s risk of loss is limited to the initial option premium and transaction costs.

150 S. Wacker, 12THFloor   |   Chicago, IL 60606   |   888.280.80206An  individual  granting  options  under  either  a  stock-style  or  futures-style  system  of  margining  should understand  that  he  or  she  may  be  required  to  pay  additional  margin  in  the  case  of  adverse  market movements.(5)Profit potential of an option position. An option customer should carefully calculate the price which the underlying futures contract would have to  reach  for  the  option  position  to  become  profitable.  Under  a  stock-style  margining  system,  this  price would include the amount by which the underlying futures contract would have to rise above or fall below the strike price to cover the sum of the premium and all other costs incurred in entering into and exercising or  closing  (offsetting)  the commodity  option  position.  Under  a  future-style  margining  system,  option positions  would  be  marked  to  market,  and  gains  and  losses  would  be  paid  and  collected  daily,  and  an option position would become profitable once the variation margin collected exceeded the cost of entering the contract position.Also, an option customer should be aware of the risk that the futures price prevailing at the opening of the next trading day may be substantially different from the futures price which prevailed when the option was exercised.(6)Deep-out-of-the-money options.A person contemplating purchasing a deep-out-of-the-money option (that is, an option with a strike price significantly above, in the case of a call, or significantly below, in the case of a put, the current price of the underlying  futures  contract)  should  be  aware  that  the  chance  of  such  an  option  becoming  profitable  is ordinarily remote.On  the  other  hand,  a  potential  grantor  of  a  deep-out-of-the-money  option  should  be  aware  that  such options normally provide small premiums while exposing the grantor to all of the potential losses described in section (1) of this disclosure statement.(7)Glossary of terms(i)Contract market.Any board of trade (exchange) located in the United States which has been designated by the Commodity Futures Trading Commission to list a futures contract or commodity option for trading.(ii)Exchange-traded option; put option; call option.The options discussed in this disclosure statement are limited to those which may be traded on a contract market. These options (subject to certain exceptions) give an option purchaser the right to buy in the case of a call option, or to sell in the case of a put option, a futures contract underlying the option at the stated strike price prior tothe expiration date of the option. Each exchange-traded option is distinguished by the underlying futures contract, strike price, expiration date, and whether the option is a put or a call.(iii)Underlying futures contract.The futures contract which maybe purchased or sold upon the exercise of an option on a futures contract.(iv)[Reserved](v)Class of options.A put or a call covering the same underlying futures contract.(vi)Series of options.Options of the same class having the same strike price and expiration date.(vii)Exercise price. Seestrike price.(viii)Expiration date.The last day when an option may be exercised.

150 S. Wacker, 12THFloor   |   Chicago, IL 60606   |   888.280.80207(ix)Premium.The  amount  agreed  upon  between  the  purchaser  and  seller  for  the  purchase  or  sale  of  a commodity option.(x)Strike  price.The  price  at  which  a  person  may  purchase  or  sell  the  underlying  futures  contract  upon exercise of a commodity option. This term has the same meaning as the term “exercise price.”(xi)Short option position. Seeopening sale transaction.(xii)Long option position. Seeopening purchase transaction.(xiii)Types of options transactions—(A)Opening purchase transaction.A transaction in which an individual purchases an option and thereby obtains a long option position.(B)Opening sale transaction.A transaction in which an individual grants an option and thereby obtains a short option position.(C)Closing  purchase  transaction.A  transaction  in  which  an  individual  with  a  short  option  position liquidates the position. This is accomplished by a closing purchase transaction for an option of the same series as the option previously granted. Such a transaction may be referred to as an offset transaction.(D)Closing sale transaction.A transaction in which an individual with a long option position liquidates the position. This is accomplished by a closing sale transaction for an option of the same series as the option previously purchased. Such a transaction may be referred to as an offset transaction.(xiv)Purchase price.The total actual cost paid or to be paid, directly or indirectly, by a person to acquire a commodity option. This price includes all commissions and other fees, in addition to the option premium.(xv)Grantor, writer, seller.An individual who sells an option. Such a person is said to have a short position.(xvi)Purchaser.An individual who buys an option. Such a person is said to have a long positionCopyright © 2020Charles Option2Pro., Inc. All rights reserved. MemberSIPC