Best OTC Trading Platforms In UAE 2022

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Are you searching for the best OTC trading platforms in UAE and don’t know which one to choose from the overwhelming offer? To make your decision easier, we used a database of 101 online brokers to compare them across 9 categories. We used our review methodology including fees, mobile trading apps, customer support, platforms, tradable assets, deposits & withdrawals, regulation, research & education, and Islamic account availability. After considering 214 variables across numerous brokers and comparing 3500 data points, these are the Best OTC Trading Platforms in UAE

Top 5 OTC Trading Platforms In UAE:

Do you want to speed thing us? Here is a quick look at our list of recommended OTC platforms in UAE:

  • Interactive Brokers – Best for penny stocks
  • Charles Schwab – Best for mutual funds
  • Ava Trade – Best for forex and CFD
  • eToro – Best for beginners and cryptoCurrency
  • TradeStation – Best for active traders and for futures
RANK BROKER GENERALRANKING BEST FOR WEBSITE
#1Interactive BrokersGreat educational content4.9 / 5Best for penny stocksOfficial website
#2Charles SchwabVery competitive trading fees4 / 5Best for mutual fundsOfficial website
#3Ava TradeGreat customer support4.8 / 5Best for forex and CFDOfficial website
#4eToroGreat social trading service4.9 / 5Best for beginners and cryptoCurrencyOfficial website
#5TradeStationGreat mobile trading platform3.7 / 5Best for active traders and for futuresOfficial website

Below is a detailed breakdown of our recommended OTC platforms, including pros, cons and key takeaways.

01. Interactive Brokers: Best For Penny Stocks

interactive-brokers-rating

Interactive Brokers finished at number one as the best brokers for penny stocks in UAE. It is a highly trusted global broker with a well-rounded offer of different stocks, great educational content and sophisticated order type configuration. Users get access to a sophisticated trading platform, a competitive fee structure and great global market coverage. Their low entry level and the Global Trader platform, which is intuitive and easy to use trading station, make this broker s great choice for beginners and advanced traders.

Professional and seasoned traders will appreciate the great selection of advanced trading tools and order type configurations available on their proprietary Trader Workstation desktop platform (TWS).

By offering access to 16,500 shares, 8,000 stock CFDs and 2,300 penny stocks, Interactive Brokers is a great choice for investors looking to trade with stocks and penny stocks. You can compare Interactive Brokers with the best stock brokers in UAE here.

Pros:

  • Great choice of OTC trading instruments (over 1 million available)
  • OTC trading instruments traded via professional trading platforms suitable for both active traders and investors
  • Competitive trading fees for OTC trading 

Cons:

  • Different trade execution for IBKR Lite and IBKR Pro clients

Key features:

  • Margin loan rates on stocks of 1.3%
  • Access to 135+ global markets
  • Advanced order types, tools and features
  • Access to frictional shares
  • Lowest commissions in the industry

02. Charles Schwab: Best for mutual funds

charles-schwab-rating

Charles Schwab is a US-based FINRA and SEC-regulated broker that has been in business since 1971 at which users can trade stocks and ETFs without paying any commissions. Charles Schwab offers high-quality trading tools like stock research and detailed fundamental data to help you generate trading ideas.

Charles Schwab offers traders and investors the Schwab Intelligent Portfolios service, which is a robo-advisory service to help you optimize your portfolio and the StreetSmart Edge advanced desktop trading platform which includes a wide range of tools and features. 

Pros:

  • Great choice of OTC trading instruments
  • Competitive trading fees for OTC trading instruments; some trade commission-free
  • Fractional share trading

Cons:

  • No Forex and a limited number of Crypto trading instruments

Key features:

  • Access to over 3,000 US stocks and thousands of other financial instruments
  • Multiple advanced order types 
  • Provides own equity ratings and reports from Morningstar and Credit Suisse
  • Integrated with Google Assistant – Ask Google any stock price or market update
  • Commissionless stock trading 
  • Suitable for both beginners and advanced traders
  • Robo-advisor and financial advisors available

03. AvaTrade: Best for forex and CFD

avatrade-rating

AVAtrade is a well trusted global online broker for forex and CFD trading. Their multi-asset trading platform and mobile trading app enable traders to access 1365+ tradable symbols overall, including 1200+ CFD’s, major currency pairs with low forex spreads and premium options.

Beside their proprietary platform AVAtradeGo and MetaTrader, AVAtrade has great selection of copy trading solutions including ZuluTrade, DupliTrade and AVAsocial.

Account opening is fast, deposits and withdrawals are free of charge. The minimum deposit is $100. 

Choose AVAtrade if you are a beginner or semi advanced forex trader, looking to trade major forex currency pairs, options or CFDs as stocks, cryptos, indices or commodities with premium services.

Check the full AVAtrade review for more information.

Pros:

  • MT4 platform (The best for Forex and CFD trading) is available; MT5 also 
  • Good trading fees for CFD trading
  • Social trading service (you can trade OTC trading instrument via copy trading) 

Cons:

  • Comparatively few trading instruments;  offers Forex, CFDs and Binary Options 

Key features:

  • Access to 1250 CFDs and 44 forex options
  • Excellent copy trading features
  • Advanced mobile trading app (AvaOptions)
  • Industry average pricing
  • Perfect for casual and advanced traders
  • Access to the full meta trader suite

04. eToro: Best for beginners and cryptocurrency

etoro-rating

eToro is a reputable global brand and industry leading broker for copy trading. Their robust and cutting edge copy trading platform and social trading features allow users to copy trades and portfolios from professional traders and investors.

As a CFD multi asset broker, eToro allows users to trade on over 3075 different symbols including stocks, forex, cryptos, indices and commodities. Trading spreads are wide, deposits are free and account minimum is low. There are conversion and inactivity fees. eToro provides a comprehensive list of technical tools, charts, and newsfeeds. Their customer support is available through email and live chat in Arabic and English.

eToro is a well established market maker broker with a clean history record, regulated by top tier regulators.

eToro AUS Capital Ltd ACN 612 791 803 AFSL 491139. OTC Derivatives are speculative and leveraged. Not suitable for all investors. Capital at risk. See PDS and TMD

Pros:

  • Social trading service (you can trade OTC instruments by matching popular traders trades)
  • Wide choice of Crypto trading instruments; Easily withdrawal Crypto holdings from the platform
  • Low Forex and CFD trading fees

Cons:

  • Trading platform for OTC trading is lacking some features that more experienced traders would like to have

Key features:

  • Sophisticated social-copy trading features
  • Multiple different payment options
  • Crypto exchange and brokerage services on the same dashboard
  • Super fast registration and KYC on-boarding process
  • Zero commission stock trading
  • Great ease of use level

05. TradeStation: Best for active traders and for futures

trade-station-rating

Tradestation is a reputable online broker known for its technology-leading trading platforms, great selection of tools and zero commission stock and ETF trading. Their industry leading trading platform suite combines a desktop, web and mobile version which are all performing above industry average. Tradestation offers a great selection of most popular asset classes including stocks, cryptos, options, futures, ETFs and IRAs.

Their trading fees vary based on account selection. Pricing is below industry average on the most used accounts (select and GO).  Minimum deposit is $2000 and there are no monthly charges. 

Pros:

  • Great choice of OTC trading instruments
  • Competitive trading fees for OTC trading instruments; some trade commission free
  • Professional and reliable trading platform with fast OTC trade execution

Cons:

  • Forex trading not available

Key features:

  • Access to over 20,000 stocks, ETFs, options, futures, mutual funds, bonds, and other financial instruments.
  • Early-access to newly listed securities via TradeStation’s IPO trading platform
  • Broad range of research and analysis tools for advanced traders like FuturesPlus, TSCrypto, Discover, and Insights
  • Fully paid stock lending and margin trading available
  • Low floating spreads, commissions, and other trading fees
  • Perfect for both beginner and advanced traders

How We Choose The Best OTC Trading Platforms? 

To differentiate the offers, we create a list of the best OTC platforms using 214 variables across 3500 data point and compared 101 online brokers that offer OTC trading in 8 categories. The categories include costs, withdrawal & deposit, accounts, regulation, assets available, mobile apps, platforms, and customer support. Below is a breakdown of what was considered in each category:

  • Fees:  To make profits, investors need to know how much a transaction costs. Fees range from 0.03% to 0.5% at OTC brokers, but choosing a 0% commission broker is a good idea. 
  • Trading platforms: A good trading platform offers access to historical data, breaking news, and portfolio tracking. Bonus points for APIs and swipe up gestures, which make your trading easier. 
  • Mobile Trading: Trade on the go with mobile trading platforms, and have access to the markets all the time. Mobile versions aren’t the same as the online or desktop version, so make sure the features you want are in the mobile app. 
  • Deposit & Withdrawal: Don’t pay for deposits or withdrawals, and check to see what kinds of payment methods the broker accepts. 
  • Assets: Make sure that the broker you choose offers full coverage of the OTC assets you want to trade. When analyzing and comparing brokers we considered the following OTC asset classes: Penny stocks, Bonds, Cryptocurrencies, Forex, CFDs, Options and Futures
  • Regulation: Traders in the UAE should only invest with brokers that hold top-tier licenses, and are compliant with FCA, CySEC, and ASIC regulations. 
  • Research & Education: New traders should choose a broker that offers news and research. A personal account manager will also help traders get the most from their resources. 
  • Customer support: You need to choose a broker that delivers great customer support in a language that you understand. 

*Islamic Accounts: We only consider brokers for investors in the UAE that have trading options that are in full compliance with Sharia law requirements.

The table below shows a more detailed overview of how each of the brokers performed in all of the categories category tested:

Broker NameOTC Trading instrumentsTradingPlatformCustomerSupportMobile PlatformFeesResearch & EducationDeposit & WithdrawalOverall
Interactive Brokers5.05.04.55.05.04.63.55.0
Charles Schwab5.04.64.54.45.05.03.54.9
Trade Station5.05.04.75.04.34.23.54.8
Ava Trade3.54.44.54.84.25.04.64.7
eTorro4.23.55.04.44.05.05.04.7

What is OTC (Over the Counter Trading)?

OTC trading is trading any kind of security over a broker-dealer network. Instead of using a centralized exchange, securities move between counterparties on a direct basis in the OTC. 

Numerous kinds of securities trade in the OTC market including micro-cap stocks, credit swaps, and options. For investors in the UAE, the OTC markets offer investments that aren’t available in the local exchanges, such as futures, mutual funds, US-based ETFs and shares of smaller foreign companies. They also offer derivatives that track the price of commodities, forex, and cryptos

Pros and Cons of OTC Trading

The vast amount of securities that trade in the OTC markets make it attractive for investors in the UAE who want access to a range of investment options. But, many of the securities that trade in the OTC markets are risky. 

Besides large foreign companies, small companies that aren’t able to list on major exchanges trade on the OTC markets. Smaller companies offer big returns, and they also carry large risks. Liquidity also tends to be lower on the OTC markets, which may impact the ability of an investor to sell an asset. 

Pros

  • Inexpensive stocks that trade on OTC Markets earn huge returns.  
  • Investors buy companies on the OTC Markets that can’t list on larger exchanges due to regulations.
  • Companies that don’t list on exchanges in the UAE are accessible in the OTC Markets. 

Cons

  • Investing in small companies that don’t follow UAE exchange regulations is risky. 
  • Liquidity in the OTC Markets is lower, and selling a position is difficult in a low-liquidity market. 
  • With fewer regulations, less information is available, which leads investors to spend money on fraudulent companies. 

Why are OTC stocks risky?

There are many kinds of securities that trade on the OTC market. Because many of these companies aren’t subject to the same kinds of regulations that apply to companies on an exchange, the risks are higher. 

Investors will have trouble finding information about companies in the OTC market, and the data found is subject to fraud. 

When an investor wants to sell securities on the OTC markets, changes to the price happen. The market moves based on the sale, and illiquid markets are volatile. In a centralized exchange, more liquidity means selling at a given price is easy. 

Because it is easy to move the prices in the OYC markets, some fraudsters run “pump-and-dump” schemes. A small amount of money in an illiquid market makes the shares rise, and attract the interest of traders. Then the fraudster sells their shares at a higher price and leaves the investors who came late holding shares that aren’t worth a lot. 

How do beginners buy penny stocks in UAE?

Step ONE: Work with the right broker. The broker you choose should have a good reputation and offer the services you need. Make sure you understand the fees before you start trading. 

Step TWO: Do research before you buy. You need to dig into the company you want to buy before you start picking up shares. Look out for pump-and-dump operations that will hurt your portfolio. 

Step THREE: Have a trading plan. When you start trading, make sure you know where you will buy or sell your position. You can’t know what the market will do, so you have to know what you will do when the market moves. 

Step FOUR: Diversify your holdings. Don’t buy one penny stock and hope for the best. Your portfolio should have more than one company, and they should not all be small companies. Buy a range of assets, and make sure you have solid, large-cap exposure as well. 

Step FIVE: Take a long-term view. Buying small companies means being patient, and waiting for a great idea to pay off. You will never make 10x on a position if you sell it when it doubles. Learn how to have faith in a company, and let it create big returns. 

You can find a detailed listed of the best penny stock trading platforms here.

Conclusion

After analysing and comparing 101 brokers that offer OTC trading, we consider Interactive Brokers as the best OTC trading platform in UAE. It offers great OTC trading instruments, a professional grade trading platform, industry lowest fees and full time support. Investors can buy stocks, options, futures, commodities, and more with Interactive Brokers.

FAQ

Are OTC Stocks Safe?

OTC Stocks are risky because the shares issued represent smaller companies and there is far lower liquidity in the OTC Markets.

Can I Short Stocks in the OTC Market?

Investors can short stocks in the OTC, but it is dangerous because the markets are illiquid. 

Do all Brokers Allow OTC Stock Trading?

No, not every broker will allow OTC stock trading. If you want to trade OTC stocks, make sure your broker allows OTC stock trading.

What is an Illiquid Market?

A market that doesn’t have many investors is an illiquid market. Prices can move fast in an illiquid market, because a small amount of money can make the prices volatile.

Are OTC Stocks Manipulated all the Time?

The risk of manipulation in the OTC markets is much higher because the shares are cheap, and small amounts of money are used to make a big impact on prices. 


Methodology
The mission of Business24-7 is to provide comprehensive, unbiased ratings and reviews of the best online brokers. Trading platform, fees, mobile trading, payments, assets, regulation, education, and research are all part of our six-month evaluation of a broker’s trading platform. 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.

Disclaimer
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

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Braden Chase is an investor, trading specialist, and former research specialist for Forex.com who helps aspiring investors develop the confidence and habits they need to make an income from the market. Braden has served as a registered commodity futures representative for domestic and internationally-regulated brokerages and has also spoken & moderated numerous forex and finance industry panels across the globe.

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