Risk Disclosure

RISK DISCLOSURE DOCUMENT

PropaTrade Education Private Limited

CIN: U85500AP2026PTC125374

Last Updated: July 23, 2026

Effective Date: July 23, 2026

RISK DISCLOSURE DOCUMENT

This Risk Disclosure Document ("Document") is issued by PropaTrade Education Private Limited, a company incorporated under the Companies Act, 2013, bearing CIN: U85500AP2026PTC125374, having its registered office at Tirupati, India ("PropaTrade," "Company," "we," "us," or "our").

This Document is intended to inform Research Contractors ("Contractors") and prospective applicants about the nature of PropaTrade's services, the risks associated with trading (even in a simulated environment), and important regulatory disclosures. Please read this Document carefully before applying to or participating in any PropaTrade program.

1. NATURE OF PROPATRADE'S SERVICES

1.1 PropaTrade is a private research and education organization that engages independent contractors to conduct simulated trading research through the Udaan platform. ALL trading on the Udaan platform is conducted in a 100% simulated/virtual environment using fictitious, Virtual Capital.

1.2 PropaTrade does NOT:

(a) Facilitate real trading in securities, derivatives, commodities, forex, or any financial instrument;

(b) Provide live or direct market access to any stock exchange, including BSE, NSE, or any international exchange;

(d) Hold, manage, pool, or invest any Contractor funds or any third-party funds;

(e) Offer investment advisory, portfolio management, or research analyst services;

(f) Guarantee any financial returns, income, or profit.

1.3 The "Allocated Research Capital" or "Virtual Capital" is entirely virtual. Contractors have no ownership, claim, or right to Virtual Capital beyond its use on the Udaan platform for simulated research activities.

1.4 PropaTrade engages Contractors under the Indian Contract Act, 1872 as independent contractors. The Consumer Protection Act, 2019 does not apply to this engagement.

2. SEBI REGULATORY STATUS

2.1 PropaTrade is NOT registered with the Securities and Exchange Board of India (SEBI) as a:

(a) Stock Broker (under SEBI (Stock Brokers) Regulations, 1992);

(b) Investment Adviser (under SEBI (Investment Advisers) Regulations, 2013);

(d) Portfolio Manager (under SEBI (Portfolio Managers) Regulations, 2020);

(e) Depository Participant;

(f) Merchant Banker;

(g) Alternative Investment Fund;

(h) Any other SEBI-regulated intermediary or entity.

2.2 SEBI does NOT endorse, regulate, or oversee PropaTrade. Any use of SEBI-related information or data on the Platform is for educational and informational purposes only.

2.3 Research Stipends are performance-based professional fees for independent contractor services, calculated as a percentage (Stipend Share) of virtual profits generated on the Consultant Account. They are NOT investment returns, real trading profits, salary, or employment income. Stipend Share tiers are:

Standard Program: 30% / 50% / 70%

Boost Program: 50% / 70% / 85%

3. SEBI RISK DISCLOSURE — EQUITY FUTURES AND OPTIONS (F&O)

3.1 As per the SEBI study dated 25 January 2023 on "Analysis of Profit and Loss of Individual Traders dealing in Equity Futures and Options (F&O) Segment":

(a) 9 out of 10 individual traders in the equity F&O segment incurred net losses;

(b) On average, loss makers registered net trading loss close to ₹50,000;

(c) Over and above the net trading losses, loss makers expended an additional 28% of net trading losses as transaction costs;

(d) Those making net trading profits incurred between 15% to 50% of such profits as transaction costs.

3.2 Source: SEBI study dated 25 January 2023 — Aggregate level findings based on annual P&L incurred by individual traders in equity F&O during FY 2021-22.

3.3 This data is presented for educational purposes. SEBI is NOT affiliated with PropaTrade and does NOT endorse the Udaan platform.

4. RISKS OF DERIVATIVES TRADING (EDUCATIONAL CONTEXT)

4.1 While PropaTrade provides a simulated environment, Contractors should understand the following risks inherent in real derivatives trading, as awareness is essential:

(a) Market Risk: Prices of securities and derivatives can fluctuate rapidly and unpredictably. Past performance is not indicative of future results.

(b) Leverage Risk: Derivatives, particularly futures and options, involve leverage. Small market movements can result in disproportionately large gains or losses.

(c) Liquidity Risk: In real markets, certain instruments may have limited liquidity, making it difficult to exit positions at desired prices.

(d) Volatility Risk: Options prices are significantly affected by volatility. Sudden changes in volatility can lead to substantial losses.

(e) Time Decay Risk: Options lose value over time (theta decay), which can erode the value of positions.

(f) Assignment Risk: Option sellers face the risk of early assignment.

(g) Counterparty Risk: Risk of the counterparty defaulting on obligations.

(h) Regulatory Risk: Changes in regulations, margin requirements, or exchange rules can affect trading outcomes.

4.2 The simulated environment may NOT fully replicate these risks. Simulated trading may differ from real trading in terms of execution speed, liquidity, slippage, and market impact. Success in simulated trading does NOT guarantee success in real trading.

5. MARGIN AND REPLICABILITY RISKS

5.1 The Udaan platform uses simplified margin calculations that apply the same margin requirements for option buying and option selling. This is a deliberate simplification for training and research purposes.

5.2 Real-world brokerage margin requirements differ significantly from those used on the Udaan platform. Real brokers apply SPAN margin, Exposure margin, and broker-specific policies that may be substantially higher, particularly for option selling positions.

5.3 PropaTrade makes no guarantee of real-world replicability. Strategies that are profitable or feasible within the simulated environment may require significant adjustments to be viable in real market conditions, or may not be viable at all.

5.4 It is the Contractor's sole responsibility to understand these differences and to adjust strategies accordingly when engaging in any real-market trading independently.

6. BEHAVIOURAL RISKS

6.1 Even though PropaTrade's trading is simulated and carries no direct financial risk to the Contractor's capital, Contractors should be aware of the following behavioural risks:

(a) Overconfidence Bias: Simulated trading success may create unrealistic confidence in one's trading abilities, leading to excessive risk-taking in real markets;

(b) Gamification Effect: The evaluation structure may encourage Contractors to take excessive risks to pass the Evaluation, which is contrary to sound risk management;

(c) Compulsive Trading: Frequent engagement with trading platforms (even simulated ones) can lead to compulsive trading behaviour;

(d) Financial Commitment: Repeated Commitment Fee payments involve real money. Contractors should assess their financial capacity before paying Commitment Fees;

(e) Psychological Pressure: The pressure to meet profit targets within Evaluation deadlines (90 + 45 calendar days) may cause stress and irrational decision-making.

6.2 PropaTrade encourages responsible participation and provides educational resources to promote disciplined and responsible trading behaviour.

7. MARKET DATA ACCURACY

7.1 The Udaan platform uses market data sourced from or based on BSE (Bombay Stock Exchange) and other exchange data. However:

(a) Simulated prices may NOT always reflect real-time actual market prices;

(b) There may be delays, discrepancies, or interruptions in data feeds;

(d) Decisions made on the Udaan platform based on simulated data should NOT be used as the basis for real-money trading decisions without independent verification.

7.2 BSE data is the intellectual property of BSE. Neither BSE nor its affiliates shall be liable for any loss or damage arising from the use of BSE data on the Platform.

8. PLATFORM AVAILABILITY AND TECHNICAL RISKS

8.1 PropaTrade does NOT guarantee:

(a) Uninterrupted, error-free, or continuous availability of the Udaan platform;

(b) That the Platform will be free from bugs, viruses, or other harmful components;

8.2 Service interruptions may occur due to:

(a) Scheduled or unscheduled maintenance;

(b) Hardware or software failures;

(d) Force majeure events;

(e) Cyberattacks;

(f) Regulatory actions.

8.3 Trading Hours: Simulated trading operates during prescribed hours — 9:20 AM to 3:25 PM IST for BSE/NSE segments. Platform availability outside these hours is not guaranteed.

8.4 Contractors should maintain appropriate records of their trading activity and should not rely solely on the Platform for critical decision-making.

9. CONSULTANT ACCOUNT AND RESEARCH STIPENDS — NO GUARANTEE

9.1 Access to a Consultant Account is NOT guaranteed. Contractors must successfully complete all Evaluation phases (Phase 1: 90 calendar days, Phase 2: 45 calendar days), meet all prescribed criteria, and receive an invitation from PropaTrade at its sole discretion.

9.2 Research Stipends are NOT guaranteed income. They are performance-based professional fees contingent upon:

(a) PropaTrade's operational and financial capacity;

(b) The Contractor's adherence to all Trading Rules, risk parameters, and Terms;

(d) Continued eligibility and compliance;

(e) The Contractor generating virtual profit on the Consultant Account.

9.3 Risks specific to the Stipend model:

(a) Stipend Share Percentages May Change: The Stipend Share percentages are set at PropaTrade's sole discretion and may be modified at any time with prospective effect;

(b) No Guarantee of Virtual Profitability: There is no guarantee that a Contractor will generate virtual profit or earn any Research Stipend;

(c) Evaluation Failure: Contractors may fail the Evaluation at any phase. Failure results in loss of the Commitment Fee with no refund;

(d) Account Breach for Risk Violations: Breach of daily loss limits or maximum loss limits results in trading being disabled (dashboard access remains). No refund is payable;

(e) Full Revocation for Fraud/Integrity: Engagement in Prohibited Trading Practices, fraud, or integrity violations may result in full revocation of Platform access and forfeiture of all Stipends;

(f) Past Earnings No Guarantee: Past Research Stipend earnings by any Contractor do NOT guarantee future earnings. Each payout cycle is independent;

(g) Payout Cycles: Standard Program: 25 trading days (monthly); Boost Program: 10 trading days (biweekly). Processing takes 7–14 business days after the payout period;

(h) Discretionary Payouts: PropaTrade retains sole discretion over actual payout amounts;

(i) Contractor Status: Contractors are independent contractors, NOT employees. Research Stipends are professional fees subject to TDS under Section 194J. Contractors are not entitled to employment benefits, provident fund, ESI, gratuity, or any other statutory employment benefits.

9.4 Research Stipends are NOT investment returns, trading profits, profit-sharing, dividends, salary, wages, or any form of guaranteed financial return.

10. NOT A SUBSTITUTE FOR PROFESSIONAL ADVICE

10.1 Information, content, and educational materials provided on the Platform are for educational purposes only and shall NOT be construed as:

(a) Investment advice;

(b) Financial planning advice;

(d) Legal advice;

(e) A recommendation to buy, sell, or hold any security or financial instrument.

10.2 Contractors are strongly advised to consult with qualified, SEBI-registered financial advisors, chartered accountants, and legal professionals before making any real investment or trading decisions.

11. FOREX AND CRYPTOCURRENCY — EXCLUSION

11.1 Forex: PropaTrade does NOT offer forex trading. Indian residents are subject to restrictions under the Foreign Exchange Management Act, 1999 (FEMA) and RBI circulars.

11.2 Cryptocurrency: PropaTrade does NOT deal in cryptocurrency, virtual digital assets, or blockchain-based tokens.

12. TAX AND LEGAL COMPLIANCE

12.1 Contractors are solely responsible for all tax obligations arising from their engagement, including income tax on Research Stipends and GST where applicable.

12.2 PropaTrade deducts TDS at 10% (or 20% without PAN) under Section 194J on Research Stipends and issues TDS certificates (Form 16A). Research Stipends must be declared as income from profession/business.

12.3 Contractors should consult their own tax advisors regarding tax implications.

13. LIMITATION OF LIABILITY

13.1 PropaTrade's total aggregate liability to any Contractor shall not exceed the lesser of:

(a) The total fees paid by the Contractor in the six (6) months preceding the event; or

(b) INR 10,000 (Indian Rupees Ten Thousand).

14. ACKNOWLEDGEMENT

14.1 By applying to PropaTrade programs or using the Udaan platform, you acknowledge and confirm that:

(a) You have read and understood this Risk Disclosure Document;

(b) You understand that all trading on the Udaan platform is simulated and virtual;

(c) You understand that your relationship with PropaTrade is that of an independent contractor under the Indian Contract Act, 1872;

(d) You understand that PropaTrade is NOT registered with SEBI and does not provide real trading access;

(e) You understand that there is no guarantee of a Consultant Account, Research Stipends, or any financial benefit, and that Stipend Share percentages are subject to change;

(f) You are over 18 years of age and have the legal capacity to enter into this engagement;

(g) You have assessed your financial capacity to pay Commitment Fees;

(h) You will not rely on simulated trading results as a basis for real-money trading decisions without seeking independent professional advice.

15. CONTACT INFORMATION

For any queries regarding this Risk Disclosure Document, please contact:

Grievance Officer: Sai Kalyan GP, Director

Email: [email protected]

Address: PropaTrade Education Private Limited, Tirupati, India

PropaTrade Education Private Limited

CIN: U85500AP2026PTC125374 | GSTIN: 37AAQCP9565N1Z7

Registered Office: Tirupati, India

Trading involves risk. Results shown are from a simulated environment and do not guarantee similar outcomes. Individual results may vary significantly.