Margin Disclosure

We are furnishing this document to you to provide some basic facts about purchasing securities on margin, and to alert you to the risks involved with trading securities in a margin account. Before trading stocks in a margin account, you should review the margin agreement provided by ChoiceTrade and its clearing firm, Penson Financial Services (“Penson”). Consult ChoiceTrade with any questions or concerns you may have with your margin accounts. When you purchase securities, you may pay for the securities in full or you may borrow part of the purchase price from ChoiceTrade/Penson. If you choose to borrow funds from ChoiceTrade/Penson, you will open a margin account with ChoiceTrade. The securities purchased are collateral for the loan to you. If the securities in your account decline in value, so does the value of the collateral supporting your loan, and as a result, ChoiceTrade/Penson can take action, such as issue a margin call and/or sell securities in your account without notice, in order to maintain the required equity in the account. Please refer to ChoiceTrade’s margin schedule for details. Additionally, please note the following: You can lose more funds than deposited in the margin account. A decline in the value of the securities you purchase on margin may require you to provide additional funds to avoid the forced sale of those securities or other securities in your account.

ChoiceTrade/Penson can force the sale of securities in your account. If the equity in your account falls below our house maintenance requirements, we can sell the securities in your account to cover the margin deficiency. You will also be responsible for any shortfall in the account after such a sale.

ChoiceTrade/Penson can sell your securities without contacting you. Some customers mistakenly believe that they must be contacted for a margin call to be valid, and that securities cannot be liquidated in their accounts to meet the call unless they are contacted first. This is not the case. As a matter of good customer relations, we will attempt to notify our customers of margin calls, but are not required to do so. However, even if we have contacted you and provided a specific date by which you can meet a margin call, we can still take necessary steps to protect our financial interests, including immediately selling the securities without notice to you. You are not entitled to choose which securities or other assets in your account(s) are liquidated or sold to meet a margin call. Because the securities are collateral for the margin loan, we have the right to decide which security to sell in order to protect our interests.

We can increase our "house" maintenance margin requirements at any time and are not required to provide you advance written notice. These changes in our policy often take effect immediately and may result in the issuance of a maintenance margin call. Your failure to satisfy the call may cause us to liquidate or sell securities in your account(s). You are not entitled to an extension of time on a margin call. While an extension of time to meet initial margin requirements may be available to customers under certain conditions, a customer does not have a right to the extension. In addition, a customer does not have a right to an extension of time to meet a maintenance margin call. At ChoiceTrade/Penson, it is policy not to take extensions of time.

The IRS requires Broker Dealers to treat dividend payments on loaned securities positions as in-lieu dividends for 1099 tax reporting purposes. Taxation of substitute dividend payments may be greater than ordinary on qualified dividends.