Equity Futures: An Exciting New Market

Nasdaq Dubai launched equity index futures on February 18, 2018. The contracts are based on the DFM General Index (DFMGI) and the ADX General Index (ADI).

The arrival of index futures is the latest phase of expansion in the exchange’s futures market, which opened in September 2016 with single stock futures on leading UAE companies and has attracted substantial trading. The index futures increase the opportunities for international and regional investors to profit from market movements and hedge their positions.

Nasdaq Dubai is the only exchange where futures on UAE equities can be traded.

The market is the outcome of collaboration between Nasdaq Dubai and leading capital markets participants including SHUAA Capital and Al Ramz Capital, which are providing market making services, and Menacorp Financial Services, Al Ramz Capital, Arqaam Capital, EFG Hermes, Integrated Securities, Al Safwa Mubasher Financial Services, Naeem Shares & Bonds and SICO UAE as brokers. 

In due course Nasdaq Dubai’s market will expand to include other derivatives products, including single stock futures and other indices tracking MENA and international markets, as well as options.

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Futures Members

Broker Contact Email Phone
Menacorp Financial Services Ahmed Waheed a.waheed@menacorpfinance.com +971 50 376 8647
Al Safwa Mubasher Call Centre uae@mubashertrade.com +971 800 567 000
Al Ramz Capital Osama Mohrat osama.Mohrat@alramz.ae +971 2 611 8816
Arqaam Capital Vineet Gupta derivatives@arqaamcapital.com +971 4 507 1854
EFG Hermes UAE Khaled Mohamed kmohamed@efg-hermes.com
EFG-HermesCallCenter@EFG-HERMES.com
+971 4 3069406
+971 600 50 0004
Naeem Shares & Bonds Abdel-Rahman Kharma abdelrahman.kharma@naeemholding.com +971 4 3824709
Integrated Securities Samir Zedan,  samir@integratedsecurities.ae  +971 2 494 2606 
Azza Swaidan, azza@integratedsecurities.ae +971 2 494 2603
SICO UAE Zaher Al Affouri Brokerage@sicouae.com +971 2 6590112
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How to trade Equity 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.

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Benefits of Equity Futures

Nasdaq Dubai Equity Futures offer many benefits for investors.


Leverage

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.

Hedging

Allows portfolio managers and investors to hedge their existing market exposure, either increasing or decreasing their exposure to volatility of the underlying equity.

Cost Effective

Futures fees can be lower than fees for trading equities.

Standardisation

Futures contracts are always in a standardised form.

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What are Derivatives?

Watch the video