Best Online Trading Platform in UAE
This is our list of the best online trading platforms in UAE based on several factors: traders score, commodities you can trade, trading platforms, funding methods, islamic account enabled, minimum deposit and welcome bonus:
- IQ Option
- Olymp Trade
Our TOP Picks in Review:
To sum it up…
Best Trading Platform for Day Trading 2019
- IQ Option: Best for Binary Options Trading and CFD’s
- Best for Social, Copy Trading and for trading beginners
- Plus500: Most trusted and best forex and CFD broker overall
- Best Forex Broker for Advanced Traders
- Olymp Trade: Best for Forex and CFD trading
- FXCM: Best Technical Tools and analysis
- OandA: Best API options and Great Technical Tools
- IG: Most Trusted Broker Overall, Best for CFDs and forex
Exploring the UAE Financial Market
The UAE is a diverse landscape made up of seven uniqueemirates. Although each environment has its ownbenefits to offer, it’s safe to say that there are two financial centresof the country that lead the way for investors, Dubai and Abu Dhabi.
Before the UAE discovered oil in the 1950s, much of the country’s economy was drivenby pearl diving, fishing, nomadic farming, andeven date palm cultivation. However, since then, the economy has grown drastically. According to the 2015 Economic Report, the UAE’s GDPR was £330 billion. Today, that number has risen to 382.6 billion.
The two primary financial security exchange platforms in the UAE are the Dubai Financial Market, or the DFM, and the Abu Dhabi Securities Exchange, ADX. The two organisationsoperate under the regulation and strict rules of the Securities and Commodities Authority (SCA). Through each exchange, it’s possible to deal in a range of financial products including bonds, futures, equities, securities, commodities, metals, derivatives, stones, and more.
Located within the heart of Abu Dhabi, the ADX was initially foundedin 2000, with the aim of delivering new investment opportunities and funds to the Emirates. The DFM was also established as a public institution during the same year, but it became a Public Joint Stock company five years later in 2005, with 20% of all shares delivered into a public offering.
The DFM was a pioneering development for the UAE, because it was the first of its kind in the region, and the first market to comply with Sharia rules. The group generally deals with debt instruments, ETFs, equity instruments, and the borrowing or lending of securities. Additionally, alongside the two Emirati exchanges mentioned here, Dubai also has 7 additional exchanges where investors can explore trading opportunities, these include:
- NASDAQ Dubai
- The Dubai International Financial Centre
- The Dubai Multi Commodities Centre
- The Dubai Pearl Exchange
- The Dubai Diamond Exchange
- The Dubai Gold and Commodities Exchange
- The Dubai Mercantile Exchange
For FX traders, the dirham is the most recognisable UAE currency. Otherwise known as the “AED,”the currency has been leveraged against the dollar since 1978, with a fixed rate of 3.6725 AED to every dollar since 1997. Only minor fluctuations have ever been seen around this rate.
National property and oil prices are usually the main things moving the UAE economy. Despite a rather significant fall of approximately 25% in the Dubai stock market, and a glut within the real-estate spate for 2018, non-oil GDP remained similar to the previous year. The Abu-Dhabi stock index achieved a strong performance throughout 2018.
The financial securities market in the UAE operates underneath theregulation of the Securities and Commodities Authority (SCA). Founded during 2000, this group offers Emiratis a chance to invest funds and savings alike into commodities and securities that support the needs of the national economy. The agency also secures the integrity and accuracy of transactions that determine fair prices in the market. As a regulator, they are committed to improving investment awareness through objective studies and recommendations too.
Another regulatory group – the DFSA, or Dubai Financial Services Authority – regulates and supervises 624 entities alongside 490 authorised firms. Online brokers are generally controlled by the DFSA.
How to Trade
If you’re looking for an opportunity to trade online in the UAE, you’ll need an online broker that’s regulated, and has a strong reputation among their clients. Online brokers typically offer a wide variety of trading accounts, including:
- FX trading: This is the process of exchanging one currency for another. Because exchange rates fluctuate, it’s possible to make money off the differences in value between currency. The popularity of Forex trading has grown significantly in recent years, perhaps because the Forex market is one of the largest and most liquid in the world.
- CFD trading: Contracts for Difference or CFD trading involves making transactions in derivative financial instruments. Thisallows traders to speculate on the future of underlying assets, such as a currency pair, stock index, or stock.
- Demo accounts: Demo accounts are fundedwith virtual money rather than real finances. Usually, these accounts are used to practice trading or develop trading strategies. They can also help offeran insight into a trader’s platform.
- Islamic accounts: These accounts are specifically designedfor traders who want to use an account that conforms to the demands of Sharia law.
When it comes to stock trading, if you want to trade listed securities on the Dubai Financial Market, you will need to apply for a NIN investor number. This number will open you up to trading on the ADX and DFM exchanges. After you get your NIN number, you’ll also need to find a broker that can list stocks on either of the two exchanges. Remember that transactions for securities in the UAE are settledin AED.
The UAE can offer an exciting opportunity to investors due to a range of benefits like a supportive regulatory environment, low taxrate, andpolitical stability. What’s more, many cryptocurrency exchanges have made UAE their home, thanks to the strength of the Fintech sector in the area. The UAE is one of the countries standardisinginitial coin offerings.
Regarding the practicalities of doing business, the UAE also ranks favourably among many Middle Eastern Countries, ranked at 1stand 7thon the World Bank’s list. Additionally, the UAE is the 25thbest location for starting a business, and 15thbest for finding and protecting minority investors.
Challenges of Trading in the UAE
Of course, while there are many opportunities available when trading in the UAE, it’s worth noting that there are challenges too. One recent development in the UAE was the implementation of a new VAT of five percent which reduces consumer spending. Lower stock values and high-interestrates have led to a change in economic prospects.
Additionally, disputes between the UAE and Qatar have had a significant impact on the economies in both areas too. With the disputecontinuing for so long, there’s a chance that this issue will continue to overwhelm trades.
What’s more, the UAE isn’t necessarily the best place to apply for credit. It’s 44thin the world at applying for credit, and 98thfor trading across borders. Thismeans that it’s not the best place for businesses starting import/export firms.
Trading in the UAE can offer a range of opportunities for people who are looking to diversify their investment portfolio through real estate, stocks, derivatives and more. However, it’s worth remembering that there are challenges to any financial market.
While some people believe that there will be a rebound in the stocks in UAE as well as a change in CFD trading and binary options trading opportunities, the real potential may lie with the cryptocurrency market. As the government continues to make the UAE more attractive for crypto exchanges, now is the time to get involved.
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