The best forex brokers for options trading for United Arab Emirates-based traders are IQ Option, Saxo Bank, Interactive Brokers, AvaTrade, and Pocket Option. In this guide, we break down the best forex options brokers in UAE and our testing methodology.
The best forex options brokers all offer great trading tools, many tradable assets, and are regulated and reliable. It is important that you trade with a trusted broker with low fees. You can trade forex options through Multilateral Trading Facilities (MTFs) and via the OTC Markets.
Best Forex Options Brokers in UAE
- IQ Option – Best Forex & Digital Options Broker for UAE Traders
- Saxo Bank – Best OTC and ETF Options Broker for UAE Traders
- Interactive Brokers – Best U.S. Forex Options Broker for UAE Traders
- AvaTrade – OTC Option Broker with the Best Options Trading App for UAE Traders
- Pocket Option – Best CFD Options Broker for UAE Traders
01. IQ Option: Best Forex & Digital Options Broker for UAE Traders
IQ Option is a regulated forex and digital options broker where you can trade forex, digital and binary options, stock CFDs, cryptocurrencies, ETFs, and commodities. On correct predictions, IQ Option pays out up to 91%. You can open an account from $10 and their minimum trade size is $1. For Muslim traders, they offer Islamic swap-free accounts. You can also practice forex options trading with a demo account first.
|Payout up to 91%||Trading platform can be difficult to understand for beginners|
|Offers Islamic and demo accounts|
|Low minimum deposit|
02. Saxo Bank: Best OTC and ETF Options Broker for UAE Traders
With Saxo Bank, you can trade options from 20 exchanges on stocks, indices, interest rates, futures, and commodities. Saxo Bank offers advanced option trading tools like option chain, strategy builder, roll option, and integrated risk data. You pay a fixed commission of $1,25 per option contract opened. Saxo Bank requires a minimum deposit of $10,000 to open an options trading account with them. You can choose to open a swap-free options trading account.
|Low fixed fee per options contract||High deposit required to open account|
|Options on multiple asset classes available|
|Offers swap-free accounts|
03. Interactive Brokers: Best Forex Options Broker for UAE Traders
Interactive Brokers is the best broker to trade U.S. forex options as a United Arab Emirates-based trader. You can trade U.S. options from $0,15 to $0,65 per contract with them globally on 30+ exchanges. Interactive Brokers offers professional trading platforms and advanced options trading tools like Options Analytics, Options Portfolio, and the Options Strategy Builder. Beginner traders have access to Interactive Brokers’ Traders’ Academy educational material.
|Low fixed fee per options contract||Trading platform overwhelming for beginners|
|Advanced options trading tools available|
|Educational material for beginners|
04. AvaTrade: OTC Options Broker with the Best Options Trading App for UAE Traders
AvaTrade is the forex options broker with the best options trading app available for UAE traders. AvaTrade is regulated by the FSRA of the Abu Dhabi Global Market and offers OTC options trading on over 40 currency pairs and gold. With their options trading app, you can trade on the go, use advanced options trading tools like volatility visualizations, risk management tools, and fully customize the trading interface. AvaTrade offers managed account services for professionals and Muslim traders can open Islamic swap-free accounts. You can practice forex options trading with the AvaTrade demo account.
|Regulated by the FSRA||Charges inactivity fees|
|Advanced trading and risk management tools|
|Demo, managed, and swap-free accounts available|
05. Pocket Option: Best CFD Options Broker for UAE Traders
Pocket Option is the best CFD options broker that offers UAE traders up to 218% payouts on correct predictions. You can trade digital and express options on forex, stocks, commodities, and crypto on their MT5 compatible trading platform. The minimum trade size is $1 and you can participate in options trading contests. Pocket Option offers its users a weekly cashback, indicators, and signals. You can practice options trading with Pocket Option’s demo account. Read the full Pocket Option review.
|High payouts||Not regulated by top-tier regulator|
|Demo account available|
What are Forex Options?
Forex options are put or call options on forex positions. With a put option, you have the right to sell the underlying asset and with a call option, you have the right to buy the underlying asset at a specified price and on or before a certain date. This specified price is called the strike price. A put option becomes profitable when the price of the underlying asset decreases. With a call option, you profit when the price of the underlying asset increases.
Forex Option Terminology
The terms you have to know when you want to start trading forex options are strike price, time value, spot price, premium, break-even level, and intrinsic value.
- Strike Price – The price at which an option contract can be concluded
- Time Value – The premium on the option related to the time remaining before it expires
- Spot Price – The current price of the underlying asset of the option contract
- Premium – The value of the time remaining on an option contract plus any profit made between the spot and strike price
- Break-Even Level – The difference between the spot price and the time value of an option contract
- Intrinsic Value – The positive difference between the strike price and spot price of an options contract
- Extrinsic Value – The negative difference between the strike price and spot price of an options contract
Forex Options Types
Apart from standard options, there are average rate options, barrier options, swaptions, currency warrants, binary options, and countdowns. These are called exotic forex options.
- Average Rate Options (ARO) – With these options, the strike price is set at expiry by taking the average spot rates during the lifespan of the option contract.
- Barrier Options – are options of which the payout depends on if the underlying asset breaches a certain price barrier during the lifespan of the option contract.
- Swaptions – are options that can be converted to a swap in return for premium.
- Currency Warrants – are long-term call options that allow you to open a forex position at a certain strike price.
- Binary Options – are options that payout when the underlying asset reaches or doesn’t reach a predetermined price. These are all-or-nothing options that either pay a high premium or become worthless. Check out best platforms for options trading
- Countdowns – are similar to binary options, but become profitable when the mid-price of an underlying asset reaches or stays below the expiry price.
Why You Should Trade Forex Options
You should trade forex options because they have a pre-defined risk, cannot be liquidated and are cash-settled, you cannot receive a margin call, you can hedge existing positions, and they have a pre-defined expiry time. It can be risky to sell options with undefined risks and you should know how options trading works before doing it.
The Four Different Levels of Forex Options Trading
The four different levels of forex options trading are default level, which includes protective puts and covered calls, level 2, which is buying put and call options, level 3, which are credit and debit spreads, and level 4, which is naked options trading.
What are the Best Forex Options Trading Strategies?
Some of the best forex options trading strategies are opening combination positions, straddles, and spread positions. A combination position is a series of options in a single options contract. A straddle or strangle is when you buy a call and put option at the same strike price and expiration date. A spread position is when you buy and sell the same option contract, but when the strike price and expiry dates differ.
How do Forex Options Differ Between Brokers?
Forex Options differ between brokers in execution policies, contract sizes, type of options, and trading symbols for the underlying currency.
Exotic Forex Options
Exotic forex options lose value when the underlying currency’s spot price touches, falls below, or increases above a certain price level.
Can I Trade Forex Options?
Most brokers offer forex options trading to professional clients only, but the ones mentioned in this guide also offer forex options trading to retail clients.
The mission of Business24-7 is to provide comprehensive, unbiased ratings and reviews of the best forex brokers. Trading platform, fees, mobile trading, payments, assets, regulation,
education and research are all part of our six-month evaluation of a broker’s account.The rating scale was based on thousands of data points that have been weighted into the scoring system. Brokerages were required to fill out a multi-point survey regarding every aspect of their platform. In-person demonstrations and evaluations were provided by the majority of the online brokers we reviewed. Stefan Grasic, along with our team of industry experts, conducted our reviews and developed this methodology for ranking what form is used in online investing.
All trading involves risk. More than 80% of investors lose in spread bet and CFD trading. As these complex instruments allow for the use of leverage, there is a high risk of losing more money than you have deposited. Before attempting to participate in spread bets and CFDs, consider how well you understand them and if you can afford to lose your money.
- 1 Best Forex Options Brokers in UAE
- 1.0.1 01. IQ Option: Best Forex & Digital Options Broker for UAE Traders
- 1.0.2 02. Saxo Bank: Best OTC and ETF Options Broker for UAE Traders
- 1.0.3 03. Interactive Brokers: Best Forex Options Broker for UAE Traders
- 1.0.4 04. AvaTrade: OTC Options Broker with the Best Options Trading App for UAE Traders
- 1.0.5 05. Pocket Option: Best CFD Options Broker for UAE Traders
- 1.1 What are Forex Options?
- 1.2 Forex Option Terminology
- 1.3 Forex Options Types
- 1.4 Why You Should Trade Forex Options
- 1.5 The Four Different Levels of Forex Options Trading
- 1.6 What are the Best Forex Options Trading Strategies?
- 1.7 How do Forex Options Differ Between Brokers?
- 1.8 Exotic Forex Options
- 1.9 Can I Trade Forex Options?