September 1, 2016
Nasdaq Dubai’s equity futures market enables trading of Single Stock Futures on the shares of some of the UAE’s leading and most liquid companies. This provides a unique opportunity to international and regional investors to profit from market movements and hedge their positions.
The market opened on September 1, 2016, following collaboration between Nasdaq Dubai and leading capital markets participants including SHUAA Capital, which is providing market making services, and Al Ramz Capital, Arqaam Capital, EFG Hermes, Integrated Securities, Mena Corp Financial Services and Mubasher Financial Services as brokers.
In due course Nasdaq Dubai’s market will expand to include other derivatives products, including futures on shares listed on MENA and international markets as well as options.
Underlying Shares Contract
(shares per contract)
Currency Contract Expiry Abu Dhabi Commercial Bank ADCB 100 AED 1, 2 and 3 months Aldar Properties ALDAR 100 AED 1, 2 and 3 months Arabtec Holding ARTC 100 AED 1, 2 and 3 months Damac Properties DAMAC 100 AED 1, 2 and 3 months DP World Ltd. DPW 100 USD 1, 2 and 3 months Dubai Financial Market DFM 100 AED 1, 2 and 3 months Dubai Investments DIC 100 AED 1, 2 and 3 months Dubai Islamic Bank DIB 100 AED 1, 2 and 3 months DXB Entertainments DXBE 100 AED 1, 2 and 3 months Emaar Properties EMAAR 100 AED 1, 2 and 3 months Emirates Telecommunications Group (Etisalat) ETISLT 100 AED 1, 2 and 3 months National Bank of Abu Dhabi NBAD 100 AED 1, 2 and 3 months Union Properties UPP 100 AED 1, 2 and 3 months
** List of companies is subject to change
Underlying Security traded on a UAE stocks exchange as approved by Nasdaq Dubai and published by way of Notice Currency Same as trading currency of underlying security in its primary market Contract Size 100 underlying shares Contract Months 1 month, 2 month and 3 months expiry Minimum Price Movement (tick size) 0.001 Daily price limits 15% up and 10% down from previous closing price Settlement Type Cash Settled Expiration Settlement Price Last 30 minutes of volume weighted average price (VWAP) of the underlying security. VWAP is calculated by adding up the trade value for every transaction executed in last 30 minutes and then dividing by the total number of shares traded during that period. In the event that this price does not adequately reflect the actual market conditions, Nasdaq Dubai may re-determine the daily settlement price at its sole discretion and may use theoretical fair value for the same. Last Trading Day /Maturity Day 3rd Thursday of the expiry month. In the event of the 3rd Thursday not being a Business Day, the Last Trading Day shall normally be the Business Day prior the 3rd Thursday. Final Settlement Day Business Day following the Maturity Day Listing of New Contract Month 2nd Thursday of the expiry month i.e Thursday prior to Maturity Day Trading Hours Sunday - Thursday, 10:00 am - 2:00 pm. Please refer to the Trading manual published on Nasdaq Dubai's website for further details on trading phases.
|Al Ramz Capital LLC||Mohammad Osama Mohrat||Osama.Mohrat@alramz.ae||+971 2 611 8816|
|Arqaam Capital Ltd||Vineet Gupta
|email@example.com||+971 4 507 1700|
|EFG Hermes Brokerage UAE LLC||EFG Hermes Call Center||EFG-HermesCallCenter@EFG-HERMES.com||+971 600 50 0004|
|Naeem Shares and Bonds||Abdel-Rahman Kharmafirstname.lastname@example.org||+971 4 3824709|
|Integrated Securities LLC||Radi Ashouremail@example.com||+971 2 494 2749 / 9712 494 2666|
|Menacorp Financial Services LLC||Racha Alkhawajafirstname.lastname@example.org||+971 4 316 2600|
|Mubasher Financial Services LLC||Retail Sales - Mohammed Abu Shairah
Institutional Sales - Mihir Mehta
|+971 4 32 11167 Extension 246
+971 4 321 1167 Extension 294
How to trade Single Stock Futures
An investor opens an account for futures trading with an approved Nasdaq Dubai broker. They can then place orders in the same way as for stock trades.
The initial payment for the futures is the initial margin. Profit and losses will be settled on a daily basis (known as variation margin). Investors must keep sufficient cash balance with their broker to meet their initial margin and daily variation margin requirement. If an investor fails to meet their margin requirement within the time specified by the broker, the broker may close the investor’s positions.
Benefits of Equity Futures
Nasdaq Dubai Single Stock Futures offer many benefits for investors.
Leverage is a key feature of equity futures. The initial payment (called initial margin) that an investor must make is only between 10% and 30% of the value of the contract. This magnification of the effect of the capital, called leverage, can lead to significant gains (or losses). These gains (or losses) can be much larger than the amount invested.
Trading & Arbitrage
Investors can benefit from the out-performance of one stock price over another through pair trading, by going long on one stock and short on another stock through futures. There are also opportunities for arbitrage when futures and underlying stock prices diverge.
Profit when price falls as well as rises
Selling in advance (shorting) and buying back allows an investor to profit from a stock that is going down in price. Buying and then selling later allows an investor to profit from a stock that is going up.
Allows portfolio managers and investors to hedge their existing market exposure, either increasing or decreasing their exposure to volatility of the underlying equity.
Futures fees can be lower than fees for trading equities.
Futures contracts are always in a standardised form.
What are Derivatives?
Watch the video