Day Trading Risk Disclosure

Day Trading Risk Disclosure.

This Day Trading Risk Disclosure Statement is being provided to you in the event you have a
margin account. Kensington Capital Corporation DOES NOT PROMOTE DAY TRADING. Investors
should consider their investment objectives and risks carefully before investing It is important that
you, as a customer of Kensington Capital, consider the following points before engaging in day trading
activities

Definition
Day trading refers to buying then selling or selling short then buying the same security on the
same day. Just purchasing a security, without selling it later that same day, would not be
considered a day trade.

Customers are generally considered to be “Pattern Day Traders” if they execute four or more
stock and/or options day trades within a five business day period.

Day trading can be extremely risky. Day trading generally is not appropriate for someone of
limited resources and limited investment or trading experience and low risk tolerance. You
should be prepared to lose all of the funds that you use for day trading. In particular, you should
not fund day-trading activities with retirement savings, student loans, second mortgages,
emergency funds, funds set aside for purposes such as education or home ownership, or funds
required to meet your living expenses. Further, certain evidence indicates that an investment of
less than $50,000 will significantly impair the ability of a day trader to make a profit. Of course,
an investment of $50,000 or more will in no way guarantee success.

Be cautious of claims of large profits from day trading. You should be wary of advertisements or
other statements that emphasize the potential for large profits in day trading. Day trading can
also lead to large and immediate financial losses.

Day trading requires knowledge of securities markets. Day trading requires in-depth knowledge
of the securities markets and trading techniques and strategies. In attempting to profit through
day trading, you must compete with professional, licensed traders employed by securities firms.
You should have appropriate experience before engaging in day trading.

Day trading requires knowledge of a firm’s operations. You should be familiar with a securities
firm’s business practices, including the operation of the firm’s order execution systems and
procedures. You should

confirm that a firm has adequate systems capacity to permit customers to engage in day -trading
activities. In addition to normal market risks, you may experience losses due to system failures.

Day trading will generate substantial commissions, even if the per trade cost is low. Day trading
involves aggressive trading, and generally you will pay commissions on each trade. The total daily
commissions that you pay on your trades will add to your losses or significantly reduce your
earnings.

Day trading on margin or short selling may result in losses beyond your initial investment. When
you day trade with funds borrowed from a firm or someone else, you can lose more than the
funds you originally placed at risk. A decline in the value of the securities that are purchased may
require you to provide additional funds to the firm to avoid the forced sale of those securities or
other securities in your account. Short selling as part of your day-trading strategy also may lead
to extraordinary losses, because you may have to purchase a stock at a very high price in order
to cover a short position.

Potential Registration Requirements. Persons pursuing day trading strategy may be required to
obtain a license or register as a trader. Persons providing investment advice for others or
managing securities accounts for others may need to register as either an “Investment Adviser”
under the Investment Advisers Act of 1940 or as a “Broker” or “Dealer” under the Securities
Exchange Act of 1934. Such activities may also trigger state registration requirements.