Trading and Broker Services in the UAE

UAE is comprised of seven emirates, but the main financial centers are Dubai and Abu Dhabi. There are currently two main security exchanges: Dubai Financial Market and Abu Dhabi Securities Exchange. Both exchanges operate under the SCA where they deal with different financial products such as equities, securities, mutual funds, bonds, futures, metals, commodities, Sukuk, and derivatives. The ADX was founded in 2000 with the purpose of providing investment and fund opportunities in securities to benefit the national economy. On the other hand, DFM was just a public joint-stock company. In 2015, 20% of the shares were sold.

Other Exchanges in Dubai

Dubai also hosts seven exchanges where you can trade in various commodities, securities, and derivative products.

  • DGCX (The Dubai Gold & Commodities Exchange)
  • DME (The Dubai Mercantile Exchange)
  • DDE (The Dubai Diamond Exchange)
  • DPE (The Dubai Pearl Exchange)
  • DMCC (The Dubai Multi Commodities Center)
  • DIFC (The Dubai International Financial Center)
  • NASDAQ Dubai

AED (United Arab Emirates Dirham) is the currency of the country recognized by forex traders in UAE. From 1978, the dirham was pegged against USD. Moreover, the rate of dirham is fixed at 3.6725 to one USD. You will notice a very minor fluctuation around this rate.

It’s no secret that oil is the main driver of the UAE’s economy. In 2018, there was a 25% fall in the DSM and real estate. But still, the non-oil GDP for the same period was higher than the previous year. The overall performance of the Abu Dhabi stock index was strong this year. SCA (Securities and Commodities Authority) is the government institution and all the financial securities market operates under it. Moreover, it provides the opportunity to invest funds and savings in commodities and securities. Also, it secures the integrity and accuracy of transactions and determines fair prices to force supply and demand. It also helps in conducting research and studies to develop investment awareness.

Trading In UAE

If you are looking to do forex trading, then you should find a regulated broker who has a strong reputation. Do not deposit your money with any unknown broker. One of the trusted brokers in the UAE is ADCB Securities. When it comes to online trading, there are lots of options for you:

CFD Trading

CFD known as contract difference, allows you to make transactions in derivative instruments. Also, it allows you to speculate on the future of your underlying assets like a commodity, stock index, currency pair, etc.

Forex Trading

It is the most basic account that online trading companies offer which allows you to exchange the currency into other forms. The fluctuation of the exchange rates of the currency pair rises or falls. Forex trading has become very famous in the last few years due to online trading. That is why; online trading has become one of the largest financial markets and has a daily turnover of 5.1 trillion dollars.

Demo Account

Online trading companies also allow you to make a demo account with virtual money. Their main purpose is to provide you an account where you can practice and test your strategy. You can also use it to check the interface of the broker’s platform and services.

Islamic Accounts

Brokers in the UAE also offer Islamic accounts to people who want to trade according to Sharia law.

If you want to trade in Nasdaq Dubai or DFM, you first need to acquire a NIN investor number. After getting a NIN, you can trade on both exchanges. If you are not a UAE national, you can still apply for NIN. But before trading, you need to find a broker that you can trust and allows you to trade stocks on both exchanges. The low tax rate and political stability have made this country a home base for many traders.

Written by:
Barbara McGee