Phase 2: Control · 8 min
Compare product structure, leverage, expiry, pricing and regulation before deciding whether a chart is even relevant.
By the end, you can:
- Ask the same safety questions for every product.
- Distinguish open-ended price exposure from fixed-expiry contracts.
- Treat OTC labels and platform schedules as product-specific.
The product determines the risk
Two screens can show the same reference price while offering very different contracts. One may use leverage and remain open until you close it. Another may settle at a fixed time using a stated payout rule. The chart alone does not tell you how profit, loss or settlement is calculated.
| Product family | Key questions | Important risk |
|---|---|---|
| Shares or cash assets | Do you own the asset? Are custody, spread or transaction fees charged? | Market value can fall; access and ownership depend on the service. |
| Leveraged products such as CFDs | What leverage, margin, spread, financing and close-out rules apply? | Leverage magnifies both gains and losses; costs can accumulate. |
| Fixed-expiry or binary-style contracts | What is the expiry, settlement source, payout and maximum loss? | An incorrect outcome can lose the committed amount; retail sale is restricted or banned in some places. |
| Platform-labelled OTC products | Who provides the price, when is it available and how is it settled? | It may not represent the same market, liquidity or price formation as the weekday underlying instrument. |
Seven questions to ask every time
- What exactly is the legal and economic contract?
- What is the maximum possible loss, including fees?
- Is leverage or margin involved?
- Is there an expiry, forced close or overnight cost?
- Which price source and settlement rule are used?
- When is the product available, and can that schedule change?
- Is this product allowed for retail clients where I live?
Binary options and fixed-expiry products
These contracts use an all-or-nothing or fixed-payout settlement at expiry. A high percentage of winning outcomes can still lose money if losses are larger than wins. More importantly, regulators in several jurisdictions have prohibited or restricted their sale to retail consumers. Never assume that availability on a website means the product is authorized in your country.
What “OTC” does—and does not—tell you
OTC means over the counter, but a platform label by itself does not explain the price source or contract. Weekend or off-hours products may use different pricing and settlement arrangements from the underlying weekday market. Test and journal them separately. Do not transfer a result from one product to another as if they were interchangeable.
This lesson teaches comparison questions, not a current product list. Use the instrument information, terms and regulatory disclosures shown to your own account at the time.
Demo exercise
Practice: make a one-page product card
In demo mode, choose one available product and record: contract type, reference asset, price source if disclosed, leverage or payout rule, expiry or exit method, all visible costs, maximum loss and trading hours. Leave any unknown field marked “unknown”—that is a reason to pause, not to guess.
Knowledge check
Answer two questions
Choose an answer and feedback appears immediately. Both answers mark this lesson complete in this browser.