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Capital Securities Investment Corporation ("Capital Securities") seeks to provide you with prompt market access, and current market information. Capital Securities also wants to make clear that, under certain situations, fast market conditions will exist in the marketplace, which may result in greater market volatility.

Fast Market Conditions

Markets exhibiting unusually large trading volume and/or great price variations are known as "fast markets". High volume conditions may occur at the market opening, or intra-day, affecting trade execution and reporting. Fast market conditions may be caused by various factors. A common factor is an order imbalance - - where there are significantly greater orders of one type (such as "buys") than another type (such as "sells"). Recently fast market conditions have occurred with trading in high technology stocks, particularly companies with an Internet-related business. These companies' initial public offerings (IPO's), as well as their secondary market trading, have often been characterized by heavy volume and large price swings, resulting in significant volatility.

Risks Associated with Fast or Volatile Market Conditions

Delays in execution and trade reporting may occur in a fast market. Also, a security's price may change very rapidly, causing significant differences between the security's quoted price, and the ultimate execution price for that security. The quote "size" for a security also may change rapidly, and an entire order may not always be filled at the quoted price. As a result, there is a substantial risk that all or part of an order may be executed at a price substantially away from the market price quoted when the order was placed.

The Financial Industry Regulatory Authority (FINRA) recommends that we inform you as to certain practices by market-makers in the NASDAQ and other over-the-counter securities markets. During normal market conditions, market-makers often utilize automated execution systems or services for eligible stocks, up to certain share sizes. These executions include automated price improvement opportunities and acceptance of stop orders. However, during fast market conditions, market-makers may decide to execute orders manually, and not utilize such systems or services. This may result in possible delays in order execution, resulting in executions at less favorable prices.

A "market order" is an order to buy or sell a stock at the best available price when the order is executed on the market. Market orders are more likely to be filled, although not at a particular price

A "limit order" is an order to buy or sell a security at a particular price, or better. A limit order will allow you to set a price limit, although it will not guarantee that your order will be filled. A limit order allows you to restrict the minimum price you are willing to receive (in the case of a sell order) or the maximum price you are willing to pay (in the case of a buy order). Your order will be executed at either your limit price, or at a better price to you. However, even when the market moves to your limit price, you are not assured an execution, because there may be other limit orders ahead of your own order.

A limit order may reduce risk in a fast and/or volatile market. A market order may be executed at a higher price (in the case of a buy) or at lower price (in the case of a sell) than you had anticipated. A limit order permits you to establish a maximum buy price, or a minimum sale price. You should consider placing limit orders, instead of market orders, in a fast or volatile market. Again, however, there is no guarantee in a fast market that your limit order will be executed. During the initial day of secondary market trading in an IPO security, Capital Securities will only accept limit orders - - Capital Securities will not accept market orders.

On occasions, fast or volatile markets may effect your access to Capital Securities. Due to heavy volume, or other factors increasing system traffic, you may not be able to obtain Internet access. Additionally, due to high volume or system capacity limitations, you may encounter difficulties in obtaining portfolio status, access to on-line information, or similar services offered through Capital Securities. If you encounter difficulty in accessing Capital Securities, we urge you to contact us at 630-705-9800. Capital Securities will attempt to take your order when capital access is limited due to market conditions.

When a security is removed from on-line trading with Capital Securities you will be notified by regular mail or E-mail. Capital Securities also may raise margin requirements for particular securities trading under fast market conditions. Where warranted, Capital Securities may designate a security as not marginable, in which case you will be required to purchase the security with 100% initial margin. Increasing margin requirements helps ensure that there is adequate equity in your margin account as protection in case of a large change in a security's value, which reduces the likelihood that we will be required to liquidate your account assets to meet a margin call.

You should consider the following points before engaging in a day-trading strategy. For purposes of this notice, a "day-trading strategy" means an overall trading strategy characterized by the regular transmission by a customer of intra-day orders to effect both purchase and sale transactions in the same security or securities.

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 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. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a stock suddenly drops, or if trading is halted due to recent news events or unusual trading activity. The more volatile a stock is, the greater the likelihood that problems may be encountered in executing a transaction. 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. For instance, assuming that a trade costs $16 and an average of 29 transactions are conducted per day, an investor would need to generate an annual profit of $111,360 just to cover commission expenses.

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.

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