Exchange Traded Options Agreement J.P.Morgan 5. Special Statement for Uncovered Options Writers (cont.) Uncovered options writing Is thus suitable only for the knowledgeable Investor who understands the risks, has the financial capacity and the willingness to incur potentially substantial losses, and has sufficient liquid assets to meet applicable margin requirements. In this regard, if the value of the underlying Instrument moves against a writer's uncovered options position, J.P. Morgan StourRies LLC may request significant additional margin payments, and J.P. Morgan Securities Lit may liquidate stock or options positions in the investors account with little or no prior notice, in accordance with the investors margin agreement. For combination and/or straddle writing, where the investor writes both a put and a call on the same underlying instrument, the potential risk Is unlimited. If a secondary market In options were to become unavailable, investors could not engage In dosing transactions, and an option writer would remain obligated until expiration assignment. The writer of an American-style option is subject to being assigned an exercise at any time after he/she has written the option until the option expires. By Contrast, the writer of a European-style option Is subject to exercise assignment only during the exercise period. C. Derivatives Approval Level Exchange Traded Options Level 1: Covered writing Level 2: Buying Options Level 3: Spreads Level 5: Uncovered Writing Level 6: Combinations/Straddles igl Date OCC booklet and supplements sent to client: EE-ELI-000E mm d d y y y r D. Pre-Dispute Arbitration and Acknowledgment By signing this Agreement, I acknowledge that: (1) I requested the options approval level as Indicated above; (2) I have received a copy of the booklet entitled, 'Characteristics and Risks of Standardized Options,' and it is expected that I will read the booklet; (3) I have reviewed the special statement for u