Clearing of digital asset contracts involves several risks that are important to understand before entering into orders, trades or positions related to these contracts, and before depositing funds to the clearinghouse. Specifically, customer digital asset balances held at the clearinghouse - whether or not they are backing orders, trades or positions - can be stolen, hacked, or lost. Thus, customer funds may become non-recoverable and irretrievably lost.

To reduce these risks, MIAXdx uses industry-standard digital asset custody practices, including:

Insurance: Hot and Warm Wallets
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MIAXdx maintains a primary crime insurance policy through Lloyd’s of London in the amount of $5MM USD. This policy covers funds stored in multi-signature hot and warm wallets. The policy covers certain but not all instances of theft, loss on premises, loss in transit, and third party computer and funds transfer fraud.

The exclusions listed in the policy include theft by a director or partner of MIAXdx, a theft discovered by an employee but not disclosed to MIAXdx, loss due to the giving of property in exchange or purchase, loss claimed solely due to inventory computation or accounting errors, loss due to breach of contract, loss due to war or acts of foreign enemies or terrorism, loss due to radioactive contamination of property, any loss arising out of or in connection with, any circumstances or occurrences which occurred prior to the inception of this policy, loss resulting from the non-payment or default of any loan, loss resulting from payments or withdrawals involving items received by MIAXdx that are not finally paid for, any loss resulting solely from the network failure of a digital currency or digital asset cryptographic protocol, and certain other exclusions.

Insurance: Cold Wallets
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MIAXdx stores the majority of customer digital assets at BitGo Trust. Information on BitGo's $250MM USD insurance policy, which applies to all BitGo Trust balances where keys are 100% held by BitGo Trust and not just MIAXdx customer balances, is available here.

BitGo's policy covers only copying or theft of private keys, insider theft or dishonest acts by BitGo employees or executives, or destruction of private keys due to certain physical perils. The physical perils listed in BitGo's policy include physical loss or physical damage caused by or resulting from certain natural events (such as fire, flood, earthquake, lightning, or volcanic action) as well as certain other events and objects (such as riots, vandalism, sprinkler leakage, aircraft, or vehicles).
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MIAXdx has obtained excess specie coverage, through Woodruff-Sawyer & Co., on top of this BitGo insurance policy. The excess declared customer limit applicable to MIAX Derivatives Exchange as a dedicated Loss Payee is $10MM USD. This means that $10MM of insurance exists specifically for MIAXdx customer balances in BitGo Trust cold wallets, after the $250MM described above has been used.

General Risk Disclosures

‍THE RISK OF LOSS IN TRADING INSTRUMENTS ON THE MIAXDX PLATFORM CAN BE SUBSTANTIAL.  YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, EXPERIENCE, OBJECTIVES, AND FINANCIAL RESOURCES.  In particular, you should be aware of the following points:

‍-You may sustain a total loss of your funds deposited with MIAXdx. 
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-All derivatives positions involve risk.  You should only trade on the MIAXdx Platform if you understand the nature of the transactions you are entering into and your risk exposure.  Please review the description of Products and Contract Specifications on MIAXdx.com for information related to the terms and conditions of each Contract.  
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-MIAXdx only clears fully collateralized positions. That means MIAXdx holds, at all times, funds sufficient to cover the maximum possible loss a counterparty could incur upon liquidation or expiration of the contract, in the form of the requirement payment.  Because MIAXdx clears only fully collateralized positions, it does not maintain a financial resource package that could be used in the event of a Participant or Customer default.  
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-MIAXdx offers cash-settled binary option contracts.  A binary option is a type of options contract in which the payout depends on the outcome of a yes/no proposition.  If you purchase and hold a “yes” (or “no”) position in a binary option contract, and at expiration the outcome is determined to be “no” (or “yes”),  then you will receive no payment and lose all of your original investment with respect to that contract.  
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-Cash-settled options contracts referencing the price of digital currencies settle to the price of a reference index. The Settlement Price of the reference index may not be reflective of spot prices on other spot exchanges generally or the prices of privately-negotiated transactions.  See the contract specifications for further details.
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-MIAXdx does not guarantee the participation of professional traders in its markets who are dedicated to ensuring there are always competitive offers to buy and sell Contracts.  As a result, there may be a lack of liquidity for certain Contracts offered and traded on MIAXdx, or at certain times.  Under certain market conditions, you may find it difficult or impossible to liquidate a position that you no longer want to hold.  
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-There may be a material change in the nature of the Underlying of a Contract.  For example, there may be a change to the relevant rules, protocols, processes or standards applicable to a Digital Currency underlying a Contract.  In the event a material change in the nature of the Underlying occurs, MIAXdx may adjust the terms of outstanding Contracts as appropriate in its discretion. The decision reached by MIAXdx could be different than you anticipated when you first took the position in the affected Contract and, as a result, you could suffer significant losses.  
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-A Contract may not settle as expected.  For example, MIAXdx may determine, in its sole discretion, that the value of a reference index used to determine the settlement outcome of a particular Contract cannot be relied upon or otherwise should not be used to settle a particular expiration of a Contract.  Under such circumstances, MIAXdx has the right to determine the Settlement Price pertaining to that expiration of the Contract.  The Settlement Price determined by MIAXdx could be different than you anticipated and, as a result, you could suffer significant losses.  
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-The changes in a Contract’s price are unpredictable.  For example, the price of a Digital Asset referenced by a Contract you purchase could change suddenly as a result of unforeseeable circumstances, or market conditions could cause MIAXdx to halt trading or otherwise adjust the settlement price.  Any such circumstances could result in you experiencing significant losses.  
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-MIAXdx may make available a broad range of financial information that we obtain from third-party service providers, including financial market data, spot market data, quotes, news, analyst opinions, links to other third-party sites and research reports (hereinafter, “Market Information”).  MIAXdx does not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of Market Information, or (2) warrant any results from the use or reliance on Market Information.

Risks of Electronic Trading

MIAXdx does not guarantee electronic access to the Platform if your internet service is down or disconnected, and MIAXdx is not responsible for any losses due to your inability to connect to the Platform when your internet service is impaired, down, or disconnected.  During any time you are unable to access the Platform for whatever reason, you will not be able to enter, cancel, or modify orders.  

MIAXdx takes precautions to ensure its Platform is reliable and resilient; however, the Platform may experience failures that prevent you from accessing it.  If the Platform experiences such a failure, there is a chance your orders and their priority in the order queue could be lost.  MIAXdx is not responsible or liable for any effect on your ability to trade caused by any malfunction of the internet, computing systems, or their related components. 
    
THIS RISK DISCLOSURE CANNOT DISCLOSE ALL OF THE RISKS OF TRADING ON THE MIAXDX PLATFORM.