10 S. Riverside Plaza
Chicago, Illinois 60606
OPTIONSHOUSE CUSTOMER AGREEMENT
This Customer Agreement (the “Agreement”) will govern all brokerage accounts (the “Account”) that you open and maintain with OM Securities, LLC doing business as OptionsHouse (“OptionsHouse”), which Apex Clearing Corporation (“Apex”) carries for you, either individually or jointly with others (“you”).
OPENING AN ACCOUNT
1. Your Legal Capacity. You represent, warrant and agree that, if you are an individual, you are of full legal age in the state in which you reside and have the capacity to enter into this Agreement. If you are a partnership, trust, corporation or any other type of entity, you represent, warrant and agree that the execution of this Agreement has been duly authorized by all necessary actions, and you have full power and authority to enter into this Agreement. You agree to identify to OptionsHouse all individuals who have an interest in the Account.
2. Information to Open the Account. To open an account, federal law requires OptionsHouse to obtain, verify and record information that identifies you, such as your name, address, date of birth and occupation. OptionsHouse may also ask you to provide identification documents, such as a copy of your driver’s license or passport. You agree that the information you provide to OptionsHouse is complete and accurate.
3. Obtaining Additional Information. You authorize OptionsHouse as it deems necessary in its sole discretion to make inquiries to consumer or credit reporting agencies, financial institutions, employers and/or other third party sources to verify your identity and the information you provide to OptionsHouse. You agree that OptionsHouse may provide information, including negative account information or unsecured debts, regarding your Account to these third parties. You understand that, upon your written request, OptionsHouse will tell you whether a credit report was requested and provide the name and address of the agency that furnished it.
4. Updating Your Information. You agree to contact OptionsHouse by contacting Customer Service at [email protected] or 1-877-598-3190, within ten (10) days after any change to the personal information you have provided to OptionsHouse, including changes to your contact information, financial circumstances, or investment objections and if you become employed, affiliated with, or registered with a broker-dealer, any securities exchange, the U.S. Securities and Exchange Commission (“SEC”), the Commodity Futures Trading Commission (“CFTC”), the Financial Industry Regulatory Authority (“FINRA”), any state securities agency, any commodities or futures contract market or association, any investment adviser, bank, trust company, or insurance company, or if you become an officer, director, ten (10) percent shareholder, control person, or affiliate of a U.S. publicly traded company. You agree that OptionsHouse can rely on the accuracy of the information that you provide. OptionsHouse reserves the right to close your Account, in its sole discretion, without providing notice or reason, upon receiving such updated information, or otherwise, and you agree not to hold it liable for closing the Account.
5. Your Account is Self Directed. You acknowledge that all decisions relating to your investments or trading activity will be made by you, your duly authorized representative, or any person authorized on the Account. OptionsHouse does not provide investment, tax or legal advice, and its representatives are not authorized to provide such advice or to solicit orders. You acknowledge that investing in securities and futures involves risk and that many variables may have a negative effect on the value of your positions. You acknowledge that OptionsHouse is under no duty to inquire as to the authority or propriety of any instructions given to it and that it shall be entitled to rely upon any such instructions without inquiry or investigation, including instructions with respect to the disbursement of funds and the transfer of securities from you, your agent, or any person authorized on the Account. You agree that OptionsHouse will not determine the validity of your agent’s status or capacity or the appropriateness of that person’s actions.
6. Review of Reports and Statements. You agree to promptly review upon receipt all Account statements, reports of the execution of orders and trade confirmations for accuracy and consistency with your instructions and investment objectives. You agree to immediately notify OptionsHouse if such documents are not received in a timely manner or are inaccurate. You acknowledge that such reports and statements shall be deemed accepted by you and shall be binding on you if OptionsHouse has not received a written objection from you within five (5) days after the statement, reports, or confirmations, where applicable, are transmitted to you or made available to you for your review. Notwithstanding the foregoing, if you are over credited with funds or securities, you agree to promptly return such funds or securities upon your discovery of the error or as requested by OptionsHouse.
7. Use of and Access to Systems. You are authorized to use materials that are made available to you by OptionsHouse for your own personal use. You agree not to reverse engineer, disassemble, modify, create derivative works from, reproduce, retransmit, disseminate, sell, distribute, publish or commercially exploit in any way OptionsHouse’s systems, software, website content, platform content, or other intellectual property. You agree that you will not delete copyright or other intellectual property rights notices from OptionsHouse materials. You agree that use of OptionsHouse’s systems will not confer any title, ownership interest, or intellectual property rights to you. You are not authorized to sell access to any such materials or to make copies of any such materials for sale to others. You agree not to use OptionsHouse’s systems for any unlawful, abusive, harassing, libelous, defamatory, obscene, or threatening purpose, to solicit OptionsHouse’s customers, or for any other improper use. You agree to comply with reasonable written requests by OptionsHouse to protect its systems and its rights.
8. Consent to Monitoring and Recording. You understand that OptionsHouse may monitor or tape record telephone conversations with all of its customers, including you, and you consent to such monitoring or recording. You agree that you will not record any telephone conversations with OptionsHouse without express written authorization of OptionsHouse and the consent from any OptionsHouse individual engaged in the conversation.
9. Orders, Executions. OptionsHouse may route for execution any transaction authorized by you to one or more exchanges, associations, electronic communications networks or other market where such business is then transacted, which routing shall be in OptionsHouse’s sole discretion. OptionsHouse may reject any order you place with it, or place restrictions on your Account in OptionsHouse’s sole discretion. You understand that OptionsHouse reserves the right to refuse or reject, and assumes no responsibility for, orders sent through the mail for the purchase or sale of securities, options, assets or other property. You also understand that if you request the transfer or registration of foreign securities, you may be responsible for any transfer fees and other fees and expenses.
10. Electronic Order Execution and Communication. You agree not to transmit orders to OptionsHouse using electronic communications other than those designated by OptionsHouse for the express purpose of placing orders. Any orders communicated to OptionsHouse’s platform or with your user login information will be considered to have been sent and authorized by you. You agree to notify OptionsHouse immediately if you receive a confirmation for an order that you did not place. You understand and agree that OptionsHouse may not act upon orders transmitted via electronic communications other than those orders sent via OptionsHouse’s designated trade order systems. Under certain circumstances, OptionsHouse may accept orders via telephone. OptionsHouse, in its sole discretion, may decline to execute any order for a variety of reasons, including the size of an order, market conditions, your breach of the Agreement, a violation of any applicable rules or regulations related to your orders, inadequate equity in your Account, insufficient margin, risk considerations or other matters that affect trading. You are responsible for monitoring all orders submitted to OptionsHouse until such orders are confirmed or OptionsHouse indicates the orders have been cancelled. You agree to notify OptionsHouse immediately if you fail to receive an accurate confirmation for any order you place. You acknowledge that confirmations of executions may be delayed or erroneous (e.g., due to computer system issues) or may be cancelled and/or adjusted by an exchange. You agree to be bound by the actual order execution, if consistent with your order. If OptionsHouse confirms execution in error and you delay in reporting such error, OptionsHouse reserves the right to remove the trade from your Account or require you to accept the trade, at OptionsHouse’s discretion.
11. Market Orders. You recognize that when you place a market order, the price of the security may change between the time the order is placed and the time it is executed. When you place a market order when an exchange, association, electronic communications network or market is closed, you recognize that the security may open for trading the next business day at a price substantially higher or lower. You agree that OptionsHouse will not be liable for any such market fluctuations. In addition, you recognize that a quote obtained at the time a market order is entered is not a guarantee that all or part of your order will be executed at the quoted price. Large market orders may be executed in multiple lots, at different prices. Generally, a market order is subject to immediate execution and cannot be canceled once it is entered. You agree that any attempt you may make to cancel a market order is only a “request to cancel,” and OptionsHouse cannot guarantee that an order will be cancelled.
12. Advanced Orders. OptionsHouse provides certain types of “advanced orders” as a service to its customers. Advanced orders pose unique risks that you should understand before making use of them. By choosing to use the advanced orders service, you acknowledge that you have read, understand and will abide by the following: Advanced orders are held at OptionsHouse on OptionsHouse servers and are not routed until they are triggered based on the conditions you have specified at the time you created or modified the order. All advanced orders are delivered on a “not held” basis. Advanced orders are subject to additional risk due to system failure, outages or technical difficulties, whether at OptionsHouse or at any exchange, clearing house or service provider. In addition, some advanced orders may not be eligible for execution at the time the order is triggered, such as stop orders entered above the market, orders that conflict with other open orders or existing positions or orders that are no longer supported by your approved trading level. OptionsHouse is not responsible for advanced orders that are affected by quote data irregularities. Advanced orders are at risk of data transmission errors including quote data issues. In the event of a missing quote or misquote, advanced orders may be erroneously delivered or may fail to be sent to the marketplace for execution. In addition, rapid quote movements or misquotes may trigger advanced orders or impact user-defined contingent factors. You are solely responsible for maintaining your open orders and advanced orders so as to avoid conflict or duplication. OptionsHouse neither warrants nor guarantees that conflicting orders will be prevented by the advanced order service. You will be solely responsible for the resolution of conflicting or erroneous advanced orders at your own risk and expense. At the time you place an advanced order, the buying power in the Account will be adjusted to reflect the advanced order as if it had been executed in the marketplace at either the limit price you provided or at the current market price. In the event the advance order is triggered, it will be sent directly to the marketplace without regard to any additional impact to your buying power or margin requirements. If the execution of an advance order generates a margin call, you will be responsible for meeting that call within the allotted timeframe. OptionsHouse, its affiliates, agents and data providers do not warrant or guarantee the accuracy, sequence, completeness, timeliness, merchantability or fitness for a particular purpose of this service. OptionsHouse, its affiliates, agents and data providers are not liable to Customer or to anyone else for any losses caused in whole or in part by its negligence or omission in procuring, compiling, interpreting, editing, writing, reporting or delivering any information or data through its advanced orders service. By using this service, you waive your right to any consequential, special or similar damages, including lost profits, trading losses, loss of use of this service or any other damages. OptionsHouse reserves the right to limit or discontinue this service at any time without prior notice.
13. Control or Restricted Securities. You acknowledge that there may be delays in connection with the sales or processing of any securities governed by Rules 144 or 145(d) of the Securities Act of 1933, as amended, and you will not hold OptionsHouse liable for any losses caused directly or indirectly by such delays. You agree to advise OptionsHouse of the legal status and availability of such securities prior to placing an order, and you will promptly furnish OptionsHouse with any necessary documents to effect a transfer.
14. Responsibility Regarding Certain Securities. Certain securities may grant a holder valuable rights that may expire unless a holder takes some action. Such securities include, without limitation, options, warrants, convertible securities, bonds and securities subject to a rights plan or tender or exchange offer. You acknowledge that you are responsible for knowing the rights and terms of all securities in your Account. OptionsHouse is not obligated to notify you of any corporate action or take any action on your behalf without specific instructions from you.
TOOLS & DATA
15. OptionsHouse Tools. OptionsHouse provides online tools to its customers for informational and educational purposes. Those tools may be provided on www.optionshouse.com, in the OptionsHouse platform or on third-party websites to which OptionsHouse may hyperlink or allow trading through. The tools may include financial and investment tools, market data, reports, alerts, calculators, webinars and related content. The data and analysis displayed in the tools should not be construed as a recommendation to buy, hold or sell a security or to engage in a particular trading strategy. You acknowledge that using the data and analysis contained or provided by the tools other than for informational and educational purposes will be done at your own risk. You agree that OptionsHouse will not be responsible for any losses that may occur from transactions effected based upon information or analysis contained in or provided by those tools. You acknowledge that OptionsHouse may hyperlink to other websites or have banner ads or hyperlinks on others’ websites. OptionsHouse is not responsible for the content or availability of those sites and will not be held responsible or liable for any loss in connection with or in reliance on them.
16. Market Data. OptionsHouse obtains market data from exchanges, associations, electronic communications networks, markets and from other third parties that transmit market data (collectively, the “market data providers”). The market data is provided “as is” and on an “as available” basis. You agree that OptionsHouse may correct any execution reported to you that was based on inaccurate market data provided to it by the market data providers. The market data is believed to be reliable, but OptionsHouse cannot guarantee the accuracy, completeness, timeliness or correct sequencing of the market data. Neither OptionsHouse nor the market data providers provide any warranty of merchantability, of fitness for a particular purpose, of non-infringement, or of any other kind, express or implied, regarding the market data. You agree that neither OptionsHouse nor the market data providers will be liable for interruptions in the availability of market data, your access to market data or any damages resulting from inaccurate, defective or unavailable market data. To the extent a tribunal of component jurisdiction determines that OptionsHouse should be held liable for any such losses, you agree that OptionsHouse’s liability will not exceed the amount you paid for the receipt of the market data. You understand and acknowledge that the market data providers have a proprietary interest in their market data. OptionsHouse provides market data for your personal, non-commercial use. You may not sell, market or redistribute the market data in any way. OptionsHouse may charge you for using market data, which charges may be based on your personal, non-commercial use of that data and your employment status. OptionsHouse reserves the right to charge you all or a portion of market data fees incurred as a result of you providing inaccurate employment information or failing to promptly update your employment information.
17. Money Movement. You agree that OptionsHouse may employ certain security procedures when you initiate a cash withdrawal, transfer, or ACH from your Account. Those procedures may include identifying or verifying the requestor or account owner, verifying or comparing the requestor or account owner’s signature, confirming the receiving bank and/or account designation, providing notice to you regarding the request by email, message center or phone, and monitoring the Account for future activity. You acknowledge that OptionsHouse may, from time-to-time, delay or reject a request to withdraw, transfer or otherwise move funds from your Account depending on security procedures it employs. You agree that you will not hold OptionsHouse liable for any damages that might occur as a result of such delay or rejection. You agree that it is your responsibility to ensure all instructions you provide to OptionsHouse are accurate before requesting the initiation of any money movements in your Account.
18. Fees and Commissions. You agree that you will pay OptionsHouse’s brokerage commissions, transaction, processing, other fees and taxes, as they exist from time to time and apply to your Account. OptionsHouse reserves the right to change its commissions and fees in its sole discretion and will post that information on www.optionshouse.com.
19. Minimum Deposit and Purchases and Sales. You understand that OptionsHouse may require you to make a minimum deposit when you open your Account and maintain that minimum balance. To execute purchase orders, OptionsHouse generally requires that your Account contain available funds equal to or greater than the purchase price of the securities. To execute sell orders, OptionsHouse generally requires that stock certificates be in your Account in good deliverable form. You agree that any purchase or sell order inadvertently accepted by OptionsHouse without sufficient funds or negotiable certificates, respectively, will be subject to liquidation, in the case of a purchase order, or buy, in the case of a sell order, at OptionsHouse’s discretion and your expense. In the event full funds are not available in your Account and an order is executed, you agree to promptly make payment to OptionsHouse. You agree that if such funds are not received on or before the settlement date, OptionsHouse may liquidate positions in your Account and you will be liable for any resulting losses and all associated costs incurred by OptionsHouse. Whenever you do not pay in full for any security purchased for the Account, or deliver any security sold for the Account, you authorize OptionsHouse, as legally permissible, until payment or delivery is made in full, to pledge, repledge, hypothecate or rehypothecate, on any terms, without notice, any or all securities which OptionsHouse may hold for you, separately or in common with other securities or commodities or any other property, for the amount due, or for a greater or lesser sum, and without retaining in its possession and control for delivery a like amount of similar securities or other property.
20. Sweep Program, Credit Balances and Fund Availability. You elect to have available credit balances that are eligible and meet a minimum threshold amount (as determined by OptionsHouse) automatically swept on a daily basis to the FDIC-insured deposit vehicle currently offered by Apex (“Designated Sweep Account”). You understand the proceeds of any funds deposited to your Account will be swept to the Designated Sweep Account and will begin earning dividends or interest on the next business day after such deposit. You understand that all purchases and/or redemptions of shares in the Designated Sweep Account will be reflected on your account statement and that you will not receive confirmations in connection with such activity. You understand that access to such funds may be withheld for up to ten (10) days to ensure that there are sufficient funds in your Account to cover any executed transactions. You agree that OptionsHouse may change the investment vehicle available in the Sweep Program at any time. OptionsHouse will provide you with advance written notice before (i) making changes to the terms and conditions of the Sweep Program, (ii) making changes to the terms and conditions of a product currently available through the Sweep Program, (iii) changing, adding or removing products available through the Sweep Program, or (iv) changing your investment through the Sweep Program from one product to another. You may withdraw your participation in the Sweep Program at any time by contacting Customer Service at [email protected] or 1-877-598-3190, with the understanding that available credit balances will then remain in cash held at Apex.
21. Payment of Obligations upon Demand, Interest on Debit Balances and Costs of Collection. You agree to remain liable for the payment upon demand, or upon settlement date when applicable, of any debit balance or other obligation, liability or other indebtedness (collectively, “Obligations”) owing in your Account. You further agree that you will be liable to OptionsHouse for any deficiency remaining in the Account in the event of a termination or liquidation. Debit balances in your Account may be charged interest in accordance with OptionsHouse’s then-current interest rate schedule for debit balances. The reasonable costs and expenses of enforcement or collection of any debit balance or Obligations, including attorneys’ fees and expenses, and any unpaid deficiency in your Account, shall be paid or reimbursed by you to OptionsHouse, as incurred. OptionsHouse may accept a lesser amount than due, which will not affect its right to later recover the remaining balance.
22. Security for Indebtedness. All securities, options, credit balances, assets and other property whatsoever which OptionsHouse may hold, carry or maintain for any purpose, in or for your Account, whether now owned or hereafter acquired, and any proceeds or distributions therefrom (collectively, “Collateral”) shall be subject to a lien in OptionsHouse’s favor for the discharge of all Obligations. You hereby grant to OptionsHouse a continuing, perfected, first-priority security interest and right of set-off in all Collateral, both of which shall be without regard to OptionsHouse having made any advances in connection with your Account and without regard to how many accounts you may have with OptionsHouse or Apex. Subject to the provisions of any applicable statute, rule or regulation, OptionsHouse may hold Collateral as security for the payment of any Obligations, and OptionsHouse shall have the right to transfer such Collateral in your Account from or to any other account, when in OptionsHouse’s judgment such transfer may be necessary for its protection. In enforcing its lien, OptionsHouse shall have the right to sell, assign, and deliver all or any part of the Collateral in the Account to satisfy your Obligations or when OptionsHouse determines it necessary. If OptionsHouse believes there is inadequate security for your Obligations or upon any event which in OptionsHouse’s opinion jeopardizes your Account, OptionsHouse shall have the right to (i) cancel any outstanding orders for the purchase or sale of securities, options, assets or other property, (ii) close transactions in your Account, (iii) buy-in any securities, options, assets or other property of which your Account may be short, or (iv) require you to deposit additional Collateral in accordance with the rules and regulations of the Board of Governors of the Federal Reserve System, or any applicable securities agency or self-regulatory body. OptionsHouse may also require Customer to deposit such additional Collateral as OptionsHouse, in its sole discretion, determines is necessary as security for Obligations. OptionsHouse shall have all rights and remedies available to a secured party under any applicable law in addition to the rights and remedies in the Agreement. Subject to the provisions of any applicable statute, rule or regulation, OptionsHouse may take any or all of the foregoing actions without prior notice, tender, demand or call, all of which you expressly waive. You hereby appoint OptionsHouse, its true and lawful agent and attorney-in-fact, with full power to act in your name and on your behalf, with respect to the execution of all instruments and the taking of all action necessary or desirable to effectuate the rights and remedies provided in this Agreement and by applicable law.
23. Payment for Order Flow. OptionsHouse routes equity and option orders for execution to market centers (broker-dealers, primary exchanges or electronic communication networks). Routing decisions are based on a number of factors, including the opportunity for price improvement and the quality of order executions. Decisions are regularly reviewed to ensure the duty of best execution is met. OptionsHouse may receive compensation or other consideration for the placing of orders with market centers for execution. The amount of the compensation depends on the agreement reached with each venue. The source and nature of compensation relating to your transactions will be furnished upon written request. You can access additional information regarding OptionsHouse’s order routing practices on www.optionshouse.com.
24. Security of Account Credentials. You will create or be provided login information and an account number when you open an account. You are responsible for the confidentiality, protection and use of your login information and all account numbers. You agree to notify OptionsHouse immediately if your login information or any account number may have been lost, stolen or compromised, or if there has been unauthorized access of your Account.
25. Suspicious Activity. If OptionsHouse believes that your Account has been involved in any fraud, crime or violation of laws or regulations, has been accessed unlawfully or is otherwise involved in any suspicious activity, OptionsHouse may suspend or freeze the Account or any of its privileges, may freeze or liquidate funds or assets or may utilize any other remedies available in this Agreement.
26. Account Protection. You understand that OptionsHouse and Apex are members of the Securities Investor Protection Corporation (“SIPC”), which protects securities of customers of its members up to $500,000 (including $250,000 for claims for cash). You may obtain additional information about SIPC, including the SIPC brochure, by contacting SIPC as indicated below:
Apex has also purchased an additional insurance policy to supplement SIPC protection. This additional policy becomes available to customers in the event that SIPC limits are exhausted, and it provides protection for securities and cash up to an aggregate of $150 million, limited to a combined return to any customer of $37.5 million, including cash of up to $900 million. Similar to SIPC protection, this additional insurance does not protect against a loss in the market value of securities.
27. Joint Account. Each Joint Owner acknowledges that he or she is liable, jointly and severally, for all obligations incurred in the Agreement. Each Joint Owner further acknowledges that each has the authority, acting alone and without notice to the others, to deal with OptionsHouse fully and completely, including, without limitation, to (i) buy, sell or otherwise deal in securities, options, assets or other property, (ii) receive confirmations, statements and communications of every kind related to the Account, (iii) receive and dispose of money, securities, options, assets or other property and (iv) make agreements on behalf of the Account and terminate, modify or waive any Agreement provisions, without any obligation by OptionsHouse to notify any other person. OptionsHouse shall be under no obligation to inquire as to the purpose or propriety of any instruction received from any Joint Owner. In the event OptionsHouse receives conflicting or inconsistent instructions from any Joint Owner, OptionsHouse may follow any such instructions or refrain from following any such instructions until they are reconciled to OptionsHouse’s satisfaction. If OptionsHouse becomes aware of divorce proceedings between joint account holders or there is a disagreement between account holders as to the handling of the Account, OptionsHouse may, but is not obliged to, freeze the account or require joint authorizations for instructions on the Account. In the event of the death of a natural person Joint Owner, the surviving Joint Owner will immediately give OptionsHouse notice of death. OptionsHouse may take any such action, as it deems advisable to protect itself against tax, liability, penalty or loss. The estate of any deceased Joint Owner shall be liable and each surviving Joint Owner shall be liable, jointly and severally, for any obligations incurred prior to receipt of written notice of death. Unless OptionsHouse is notified otherwise, OptionsHouse may consider the Joint Owners to hold the Account as joint tenants with rights of survivorship, and, upon the death of any Joint Owner, the entire Account shall become the property of the other Joint Owner(s) equally, without in any manner releasing the deceased Joint Owner’s estate from liability.
28. E-Delivery. You agree to the electronic delivery of all Account documents, including trade confirmations, monthly statements, fund prospectuses, required fund documents, proxy materials, tax documents, Form 1099s and any other required regulatory correspondence or communications from OptionsHouse (collectively, “Regulatory Documents”) to your email, by sending an email with a hyperlink or instructions regarding how to access that information online, by delivery to your Account message center, or by posting the materials to www.optionshouse.com. You understand that such Regulatory Documents will be substantially equivalent to printed paper versions of the Regulatory Documents. You agree that you have a computer with internet access, an email address, and the ability to download and save or print Regulatory Documents for your records. You acknowledge that you are responsible for maintaining that equipment. You agree to notify OptionsHouse in the event you encounter difficulty viewing such Regulatory Documents. You agree that you will notify OptionsHouse within five (5) days of any failure to receive a Regulatory Document. You may withdraw your consent for the e-delivery of Regulatory Documents at any time and/or request to receive a paper copy by contacting Customer Service at [email protected] or 1-877-598-3190. Fees may apply for paper delivery.
29. Foreign Jurisdictions. Due to differing tax implications and foreign securities regulations, OptionsHouse may only maintain accounts for customers residing outside of the United States in certain foreign jurisdictions. The list of approved foreign jurisdictions is provided on www.optionshouse.com and updated from time to time at OptionsHouse’s sole discretion. OptionsHouse does not promote itself or hold itself out as doing business outside the United States. This Agreement will be considered to be a contract made in the United States and all services performed for the Account will be consider performed solely in the United States. OptionsHouse’s website should not be considered a solicitation for or offering of any investment product or service outside of the United States. You agree that if OptionsHouse determines that it cannot maintain the Account based on your residence in a foreign jurisdiction, OptionsHouse may close your account without prior notice.
30. Presumption of Receipt of Communications. Communications may be sent to you at the address you have provided in any account application or at such other address as you may give to OptionsHouse. All communications shall be considered delivered to you personally, whether or not actually received. You agree and understand that all communications sent by OptionsHouse will be provided in English.
31. SEC Rule 14b-1(c)-Communication between Companies and Shareholders. Pursuant to Rule 14b-1(c) under the Securities Exchange Act of 1934, as amended, OptionsHouse will release your name, address and security positions to requesting companies in which you own shares in the Account, unless you notify OptionsHouse in writing that you object to it providing that information.
32. Electronic Signature. You may be permitted to open your Account by electronically signing this Agreement. By doing so, you agree that you have read, understand and agree to be bound by the Agreement. You acknowledge that affixing your electronic signature has the same legal affect as if you had signed the Agreement in writing. By electronically signing the Agreement, you further agree that you have the hardware and software to view, download and print the Agreement and to retain a copy for your records.
33. Applicable Rules and Regulations. Your Account with OptionsHouse and any transactions you effect in the Account are subject to OptionsHouse’s and Apex’s policies and procedures. You acknowledge that this Agreement and all orders and transactions executed in your Account hereby incorporate and shall be subject to all applicable federal and state laws and regulations, and the constitution, rules, regulations, customs, usages, rulings and interpretations of the exchange, association, electronic communications network or market and clearinghouse (if any) where the transactions are executed. You agree to abide by all such federal and state laws and regulations, constitutions, rules, regulations, customs, usages, rulings and interpretations.
34. Third Party Beneficiary; Instructions. As a condition to OptionsHouse opening and maintaining the Account, you agree that Apex shall be the beneficiary of each of your representations, warranties, acknowledgments and covenants in this Agreement to the same extent as if such representations, warranties, acknowledgments and covenants were made directly by you to Apex. You further agree that Apex, in its own name and for its own benefit, shall be entitled to take any action as stated herein as allowed to be made by OptionsHouse and that Apex may enforce the Agreement and all rights granted to OptionsHouse directly against you. You further agree that, until receipt of written notice to the contrary, Apex may accept instructions for your Account from OptionsHouse, without inquiry or investigation by Apex, including, without limitation, instructions with respect to the disbursement of funds and the transfer of securities.
35. Indemnification. You hereby agree to hold harmless, defend and indemnify OptionsHouse and its officers, directors, employees, agents and affiliates from any liability, financial or otherwise, or expense (including attorneys’ fees and disbursements), (a) as a result of your acts or omissions and (b)(i) as a result of any losses or damages you may suffer with respect to your Account, (ii) as a result of any breach by you of any of the Agreement’s covenants, obligations, representations, acknowledgments or warranties, or (iii) as a result of the provision of any services provided to you or any actions taken by OptionsHouse as allowed by this Agreement.
36. Limitation of Liability. In no event will OptionsHouse, its officers, directors, employees or affiliates be liable to you or anyone else for any loss incurred with respect to the Account, including consequential, incidental, lost profits, trading losses or special or indirect damages, that result from inconvenience, delay or loss of the use of any of OptionsHouse’s systems, including failure of electronic or mechanical equipment or communication lines, telephone or other interconnect problems, bugs, errors, configuration problems or incompatibility of computer hardware or software, failure or unavailability of internet access, problems with data transmission facilities or your telephone service, or damage to your computer, software, modem, telephone or other property resulting from your use of OptionsHouse’s systems. You agree and understand that there may be delays or interruptions in the use of OptionsHouse’s systems. You agree and understand that OptionsHouse’s systems are being provided “as is” and there is no warranty, implied or express, including implied warranties of merchantability or fitness for a particular purpose, regarding OptionsHouse’s systems. Nothing in this Agreement shall in any way constitute a waiver or limitation of any rights which you may have under federal or state securities laws.
37. Losses Due to Extraordinary Events. OptionsHouse shall not be liable for loss caused directly or indirectly by war, strikes, natural disasters, government restrictions, exchange or market rulings, suspensions of trading, computer or communications line failures or delays in the transmission of orders due to a breakdown or failure of transmission facilities or other conditions beyond OptionsHouse’s reasonable control. OptionsHouse shall not be liable in connection with the execution, clearing, handling, purchasing or selling of securities, options, assets or other property, or other action, except for willful misconduct and gross negligence on its part.
38. Events of Default. The following shall constitute an “Event of Default”: (i) you fail to make payment to OptionsHouse as and when required, (ii) you fail to meet margin calls as and when required or to perform any other obligations under this Agreement, (iii) you make a materially untrue representation to OptionsHouse, (iv) you state that you will not perform an obligation under this Agreement, (v) you default in the performance of any obligation to OptionsHouse, (vi) you default in the payment of any indebtedness for borrowed money or any guaranty of such indebtedness upon the maturity (including any accelerated maturity) thereof, (vii) you apply for, consent to or are the subject of an application or petition for the appointment of or the taking of possession by, a receiver, custodian, trustee, liquidator or similar person of all or a substantial part of your property, admit in writing to your inability, or become unable to pay you debts generally as such debts become due, make a general assignment for the benefit of creditors, file or become the subject of the filing or entry of a petition or order for relief under Title 11 of the U.S. Code or any similar law of any jurisdiction regarding reorganization, liquidation, dissolution, insolvency, or relief of debtors or of an application for a protective decree under the Securities Investor Protection Act of 1970, or (viii) OptionsHouse believes that it may be unable to apply without delay, property that it is holding or expects to receive from you against any obligations to OptionsHouse under this Agreement or in connection with any transactions executed by OptionsHouse on your behalf.
39. Remedies. In the Event of Default, you authorize OptionsHouse, in its sole discretion, to (i) cancel or otherwise liquidate your Account and any transactions executed by OptionsHouse on your behalf, (ii) set-off any obligation owing by OptionsHouse to you against any of your obligations or against any Collateral, (iii) satisfy any of your obligations to OptionsHouse from any Collateral, (iv) sell, or be deemed to have sold, any securities, instruments, commodities or other property in your Account, (v) purchase, or be deemed to have purchased, any securities, instruments, commodities or other property, in which you have a short position, and (vi) restrict your Account from further activity (including transactions, deposits, disbursements, etc.). All purchases or sales pursuant to this Section may be effected in public or private purchases or sales in which OptionsHouse may be the purchaser or seller, in each case as OptionsHouse may deem appropriate in its sole discretion and at such price or prices as OptionsHouse may deem satisfactory in its sole discretion. Any grace or notice period required by agreement or custom prior to exercise of such remedies may be shortened or eliminated by OptionsHouse if it determines, in its sole discretion, that it is reasonable to do so under the circumstances. You shall be liable for all costs and expenses, including attorney’s fees and expenses, as incurred in connection with the enforcement or collection by OptionsHouse of its rights or claims against you.
40. AGREEMENT TO ARBITRATE CONTROVERSIES. THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE. THE FOLLOWING ARBITRATION AGREEMENT SHOULD BE READ IN CONJUNCTION WITH THESE DISCLOSURES:
a. ALL PARTIES TO THIS AGREEMENT ARE GIVING UP THE RIGHT TO SUE EACH OTHER IN COURT, INCLUDING THE RIGHT TO A TRIAL BY JURY EXCEPT AS PROVIDED BY THE RULES OF THE ARBITRATION FORUM IN WHICH A CLAIM IS FILED;
b. ARBITRATION AWARDS ARE GENERALLY FINAL AND BINDING;
c. A PARTY’S ABILITY TO HAVE A COURT REVERSE OR MODIFY AN ARBITRATION AWARD IS VERY LIMITED;
d. THE ABILITY OF THE PARTIES TO OBTAIN DOCUMENTS, WITNESS STATEMENTS AND OTHER DISCOVERY IS GENERALLY MORE LIMITED IN ARBITRATION THAN IN COURT PROCEEDINGS;
e. THE ARBITRATORS DO NOT HAVE TO EXPLAIN THE REASON(S) FOR THEIR AWARD UNLESS A REQUEST FOR AN EXPLAINED DECISION IS SUBMITTED BY ALL PARTIES AT LEAST 20 DAYS PRIOR TO THE FIRST SCHEDULED HEARING DATE;
f. WHERE A PANEL OF ARBITRATORS IS CONVENED, THE PANEL MAY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY;
g. THE RULES OF THE CHOSEN ARBITRATION FORUM IMPOSE TIME LIMITS FOR BRINGING A CLAIM IN ARBITRATION;
h. NO PERSON CAN BRING A PUTATIVE OR CERTIFIED CLASS ACTION IN ARBITRATION, NOR CAN A PARTY SEEK TO ENFORCE A PREDISPUTE ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS INTITIATED IN COURT A PUTATIVE CLASS ACTION OR WHO IS A MEMBER OF A PUTATIVE CLASS ACTION WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO CLAIMS ENCOMPASSED BY THE CLASS ACTION UNTIL CLASS CERTIFICATION IS DENIED, THE CLASS IS DECERTIFIED, OR THE CLIENT IS EXCLUDED FROM THE CLASS BY THE COURT;
i. THE RULES OF THE ARBITRATION FORUM IN WHICH THE CLAIM IS FILED, AND ANY AMENDMENTS THERETO, SHALL BE INCORPORATED INTO THIS AGREEMENT.
ANY AND ALL CONTROVERSIES, DISPUTES OR CLAIMS BETWEEN YOU, OPTIONSHOUSE, APEX, OR THEIR RESPECTIVE AGENTS, REPRESENTATIVES, EMPLOYEES, DIRECTORS, OFFICERS OR CONTROL PERSONS ARISING OUT OF, IN CONNECTION WITH, FROM OR WITH RESPECT TO (a) ANY PROVISIONS OF OR THE VALIDITY OF THIS AGREEMENT OR ANY RELATED AGREEMENTS, (b) THE RELATIONSHIP OF THE PARTIES UNDER THIS AGREEMENT, OR (c) ANY CONTROVERSY ARISING OUT OF YOUR ACCOUNT, OPTIONSHOUSE’S BUSINESS OR APEX’S BUSINESS, SHALL BE CONDUCTED ACCORDING TO THE FINRA CODE OF ARBITRATION PROCEDURE. ARBITRATION MUST BE COMMENCED ACCORDING TO FINRA DISPUTE RESOLUTION RULES. THE PARTIES AGREE THAT THE DECISION AND AWARD RENDERED IN ARBITRATION SHALL BE CONCLUSIVE AND BINDING UPON ALL PARTIES, AND ANY JUDGMENT UPON ANY AWARD RENDERED MAY BE ENTERED IN A COURT HAVING JURISDICTION THEREOF, AND NEITHER PARTY SHALL OPPOSE SUCH ENTRY. IF ANY PARTY RESISTS CONFIRMATION OR ENFORCEMENT OF THE ARBITRATION AWARD, THAT PARTY SHALL PAY ALL COSTS, ATTORNEYS’ FEES AND EXPENSES INCURRED BY THE OTHER PARTY.
CONTENTS OF THE AGREEMENT
41. Headings. The headings contained in this Agreement are for descriptive purposes only and shall not be deemed to modify or qualify any of the rights or obligations set forth in the Agreement.
42. Incorporating Disclosures. OptionsHouse must make certain risk statements and disclosures, including regarding Options Clearing Corporation (“OCC”) Characteristics and Risks of Standardized Options, the Expiration Process and Risks, Naked Options Risk, Low Priced Securities, Unique Risks of Stop Limit Orders, Risks of Shorting Stock, Extended Hours Trading Risk and Privacy Statement & Notice (the “Disclosures”). The Disclosures are incorporated into this Agreement as if they were fully stated in it. The Disclosures can be found at www.optionshouse.com. OptionsHouse may update the Disclosures from time-to-time. You agree that you will consult the website regularly to be familiar with those Disclosures and understand them. You agree to be bound by all of the terms contained in the Disclosures. You agree that your continued use of OptionsHouse services after any modification of the Disclosures will be deemed to constitute your acceptance of and agreement to the Disclosures.
43. Severability. If any provision or condition of this Agreement shall be held to be invalid or unenforceable by any court, regulatory or self-regulating agency or body, such provision shall be deemed modified, or, if necessary, rescinded in order to comply with the relevant court, or regulatory or self-regulatory agency or body. The validity of the remaining provisions and conditions shall not be affected, and this Agreement shall be carried out as if such invalid or unenforceable provision or condition was not contained in the Agreement.
44. Modification. You acknowledge that OptionsHouse may modify the terms of this Agreement, or any addendum or related documentation, from time to time, and the revised documents will be made available at www.optionshouse.com. You agree that your continued use of OptionsHouse services after any modification will be deemed to constitute your acceptance of and agreement to the revised agreement.
45. Binding Notice of Agreement. You agree that OptionsHouse shall not be bound by any representation or agreement made by any of its employees or agents that purports to modify, affect or diminish OptionsHouse’s rights under this Agreement.
46. Governing Law and Assignment. This Agreement and its enforcement shall be governed by the laws of the State of Illinois (without regard to its conflict of law provisions) for all other disputes; shall inure to the benefit of OptionsHouse’s successors and assigns, whether by merger, consolidation or otherwise; and shall be binding upon your heirs, executors, administrators, successors and personal representatives. You may not assign your rights and duties without first obtaining OptionsHouse’s written consent. OptionsHouse may assign its rights and duties under this Agreement and may transfer your Account and this Agreement to its successors and any affiliated assigns without notice or to any other entity with prior notice.
47. Termination. You may terminate this Agreement or your Account at any time upon written notice. OptionsHouse may terminate this Agreement or your Account at any time for any reason. You shall remain responsible for all Obligations initiated or authorized by you, including, without limitation, any transactions, whether arising before or after termination of the Agreement.
You hereby represent, warrant and agree that, with respect to trading options in your Account(s) (the “Options Account”):
48. Risk Factors. Options trading involves a high degree of risk and is not suitable for all investors. You are fully aware of the risks inherent in options trading, and you have determined that options trading is suitable for you in light of a number of variables, including your particular investment objectives, financial circumstances, investment experience and knowledge. You are prepared financially to undertake the risks associated with options trading, which may include a total loss of premium and transaction costs.
49. OCC Disclosure. You agree not to enter into any purchase or sale of any options contract without having received, read and fully understood the terms, conditions and risks of options trading as set forth in the current disclosure document issued by the OCC entitled the Characteristics and Risks of Standardized Options Brochure.
50. Applicable Rules and Regulations. Each options transaction is subject to the rules and regulations of the OCC, the exchange or market where such transaction is executed, FINRA and various other state and federal regulatory and self-regulatory entities (collectively, the “Rules and Regulations”). You agree to comply with all such Rules and Regulations, as well as any of OptionsHouse’s and Apex’s policies and procedures.
51. Limitations. Acting alone or in concert with others, you shall not exceed the lesser of the position and exercise limits imposed by (i) the OCC or other regulatory or self-regulatory entities having jurisdiction over the exchange or markets in which option transactions are executed, and (ii) OptionsHouse, in its sole discretion, may modify or amend any house position or exercise limits in its sole discretion and without prior notice.
52. Cleared Funds; Customer Responsibilities. In order to process options orders, OptionsHouse requires that your Options Account contain “cleared funds” equal to or greater than the purchase price of the options. Notwithstanding the foregoing, you are responsible for all of your orders, including, without limitation, any orders OptionsHouse executes to purchase options in your Options Account even if the Options Account does not contain cleared funds which exceed available funds.
53. Option Exercise and Expiration. You must give notice to exercise or to not exercise options by 3:00 p.m. Central Time. If you exercise a call option, you must meet the Obligations of purchasing the underlying security. If you exercise a put option, you agree to release the underlying security to OptionsHouse. The failure to follow these procedures may result in the option expiring worthless, even though it might have a monetary value on the expiration date. When you own an option that is about to expire in the money, OptionsHouse may, in its sole discretion or in accordance with the Rules and Regulations, and without notification to you, close out the option. OptionsHouse may take this action in order to prevent an exercise that would require the purchase or sale of the underlying security for which you do not have sufficient funds. This is in no way to be construed as an obligation on OptionsHouse’s part to sell or exercise any options on your behalf.
54. Prohibited Options Transactions; Position Limits. Unless you receive prior authorization from OptionsHouse, you shall not place trades that are not permissible under the option level for which you are approved. Furthermore, you agree that you will not violate, either acting by yourself (through OptionsHouse or otherwise) or in concert with others, directly or indirectly, applicable option position limits, and you hereby expressly authorize OptionsHouse, in its sole and absolute discretion, if and when your open option positions exceed applicable limits, to liquidate or close-out any positions so as to reduce them to a level that is in compliance with such limits. You shall bear and be solely responsible for any losses and costs associated with such a reduction or liquidation.
55. Uncovered Options Positions. If any option position in your Options Account becomes uncovered, OptionsHouse may, without prior notice to you, take immediate action to cover your position, and you shall be responsible for any resulting losses or costs.
56. Special Risks Associated With Uncovered Option Writing. In the event that you receive authorization from OptionsHouse for uncovered option writing, there are special risks associated with uncovered option writing. You acknowledge that you understand uncovered option writing can expose you to potentially significant and unlimited losses, including that a writer of an uncovered call may incur large losses if the value of the underlying security exceeds the exercise price and that a writer of an uncovered put may incur large losses if the value of the underlying security declines below the exercise price. You understand that uncovered option writing is not suitable for everyone. The strategy is only for a knowledgeable investor who understands the risks, has the financial capacity and willingness to incur potentially substantial and unlimited losses, and has sufficient liquid assets to meet applicable margin requirements. If the value of the underlying instrument moves against an uncovered options writer, OptionsHouse may request additional margin payments. If you do not make such margin payments, OptionsHouse may liquidate stock or options positions in your OptionsHouse accounts at its sole discretion and without prior notice.
57. Random Automated Allocation Method. Exercise assignment notices for option contracts are allocated among short option positions in accordance with a random automated method of allocation. A more detailed description of the allocation method is available upon request.
58. Margin Account. By opening a margin account (“Margin Account”) you acknowledge that you understand that trading securities on margin involves a variety of risks, including the following:
- Loss of Funds: You could lose more money than you deposit in the Margin Account. A decline in the value of securities that you purchase on margin may require you to provide additional funds to avoid a forced sale of securities or other assets in the Margin Account.
- Loss of Positions: If the equity in the Margin Account falls below the margin requirements, OptionsHouse can sell securities in the Margin Account, without contacting you, to cover the deficiency. You will be responsible for any shortfall in the Account after the sale. The positions that are sold may not be the positions of your choosing.
- Changing Margin Requirements: OptionsHouse or Apex can increase its margin requirements at any time without providing you advance notice of the change. Any changes can take effect immediately and result in a margin call in the Margin Account, subjecting you to the loss of funds and loss of positions discussed above.
59. Initial Margin and Margin Maintenance Requirements. You shall at all times maintain such securities and other property in your Margin Account for margin purposes as required from time to time by OptionsHouse or Apex in their sole discretion and/or pursuant to applicable laws, rules or regulations, whichever is greater. You agree to promptly satisfy all margin and maintenance calls. You acknowledge that OptionsHouse and Apex are not obligated to (i) request additional securities or other property for margin purposes in the event the Margin Account falls below minimum margin requirements, (ii) notify you of any such deficiency, or (iii) allow you time to deposit additional securities or other property. OptionsHouse and Apex reserve the right to increase margin maintenance requirements at any time in their sole discretion and without prior notice.
60. Interest Charges on Debit Balances. You agree to pay interest on all debit balances on a non-aggregated basis in your Margin Account. Interest shall be computed and charged in accordance with OptionsHouse’s and Apex’s standard methods and procedures in effect from time to time. In no event, however, shall such interest rate exceed the maximum rate permitted by applicable law. You understand that the interest charge made to your Margin Account at the close of a charge period will be added to the opening balance for the next charge period unless paid.
61. Pledge of Securities, Options and Other Property. All securities and other property now or hereafter held, carried or maintained by Apex or OptionsHouse in or for any Margin Account may, from time to time and without notice to you, be pledged, repledged, hypothecated or re-hypothecated by Apex, either separately or in common with other securities and other property, for any amount due in any Margin Account, and Apex or OptionsHouse may do so without retaining in its possession or under its control for delivery a like amount of similar securities or other property.
62. Short Sales. You agree that any “short” sale by you shall be so designated to OptionsHouse at the time such order is placed, and you hereby authorize OptionsHouse to mark any such order as being “short.” You agree that all short sale transactions shall be executed in a Margin Account. You understand that to facilitate a short sale, OptionsHouse must borrow the securities that you sell short. You agree that if (i) market conditions change, (ii) Apex or OptionsHouse are unable to borrow the securities, (iii) the lender recalls the securities, or (iv) FINRA or SEC regulations regarding the mandatory close out of short stock positions become applicable, OptionsHouse may attempt to reborrow the securities. You understand that OptionsHouse may need to cover the short position in the Margin Account on the open market at the then-current market price and market conditions. You understand that you will be responsible for any resulting loss or associated costs incurred by OptionsHouse in connection with “short” transactions.
63. Loan of Securities. Apex is authorized to lend to itself, as principal or otherwise, or to others any securities held by Apex in any Margin Account, and Apex shall have no obligation to retain in its possession and control a like amount of such securities. In connection with such loans, Apex may receive and retain certain benefits (including interest on collateral posted for such loans) to which you shall not be entitled. In certain circumstances, such loans may limit, in whole or in part, your ability to exercise voting rights of the securities lent.
64. Margin Loans. From time to time Apex may, at its sole discretion, make loans to you for the purpose of purchasing, carrying or trading in securities, options or other property (“Margin Loans”). Margin Loans will be made in a Margin Account. The minimum and maximum amount of any particular Margin Loan may be established by Apex in its sole discretion regardless of the amount of Collateral delivered to Apex, and Apex may change such minimum and maximum amounts from time to time without notice to you.
65. Ownership of Certain Securities. With respect to securities against which margin credit is extended to you: (i) you are not, and will not be, the beneficial owner of greater than three percent (3%) of the number of outstanding shares of any class of equity securities, and (ii) you do not and will not control, are not and will not be controlled by, and are not and will not be under common control with, the issuer of any such securities. You will notify OptionsHouse immediately if the foregoing representation is or becomes inaccurate.
66. Credit Statement Policy. You acknowledge that you have received, read and understand the disclosure statement explaining the conditions under which interest will be charged to the Margin Account, how rates of interest are determined, how debit balances are determined, and the methods of computing interest.
67. Margin Requirements Relating to Day Trading. Required disclosures for margin applicable to day trading can be found at www.optionshouse.com. You agree that you will review and be familiar with those disclosures before you engage in day trading.
THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE. YOU ACKNOWLEDGE THAT YOU HAVE READ AND UNDERSTAND, AND AGREE TO BE BOUND BY, SUCH PREDISPUTE ARBITRATION CLAUSE.
You understand that any alteration to this Agreement shall be ineffective to relieve you of your obligations. This Agreement and the opening of any account shall not be effective until the Account is approved by OptionsHouse.
Updated June 1, 2015