How to do stock trading in Dubai?

Trading stocks in the United Arab Emirates is a straightforward process, reflecting the government’s commitment to fostering a highly favorable business environment. To embark on your trading journey in Dubai, follow these uncomplicated steps: 

Step 1: Obtain Your NIN (National Investor Number) 

The NIN, or National Investor Number, serves as both your identity and a regulatory prerequisite for trading in Dubai. You can acquire this number through one of three straightforward methods: 

• Option 1: Utilize the DFM App (the Easiest and Fastest Approach) 

The DFM (Dubai Financial Market) recently enhanced its mobile app, making it the most efficient way to apply for your NIN. Using the app, you can initiate the application process, submit the necessary documentation, and swiftly obtain regulatory approval.

The entire application can be completed in as little as three minutes, and your NIN will be sent to you via SMS. During the process, you’ll need to upload a scanned copy of your Emirates ID and take a selfie within the DFM app. Additionally, you’ll need to specify whether you prefer to receive dividends through an investor card or a bank account.  

• Option 2: Visit the Dubai CSD Investor Affairs Help Desk

If you prefer a more traditional approach or lack extensive tech expertise, the Dubai CSD Investor Affairs Help Desk at the Dubai World Trade Centre, Sheikh Rashid Tower, provides excellent services. You can either complete a paper-based or electronic application form, sign it, and submit it in person. The authority will expedite the verification process and notify you of your NIN via SMS.  

• Option 3: Engage a Registered Broker

The third option is to open an account with a broker authorized to act on your behalf. Ensure that the brokerage firm you select is listed on the DFM’s roster of authorized brokerage firms. The application procedure and document requirements remain consistent. You’ll need to complete the official NIN request form and submit it through your chosen broker. 

Step 2: Establish a Trading Account with a Broker

With your NIN in hand, the next step is to select a registered broker. Ensure you conduct comprehensive research before making your choice. 

How to Choose the Best Broker in Dubai for Trading

DFM publishes and regularly updates a list of authorized brokers for Dubai Stock Trading. DFM requires every trading member to possess a bank guarantee of at least AED 1 million (USD 272,000) and paid capital of at least AED 30 million (USD 8,168,000). 

Consider the following factors when choosing your broker: 

• List of Services: Brokers offer a diverse array of services, including equities trading, margin trading, and online trading, among others. Some may even provide advanced options such as margin trading, direct market access (DPA), and derivative trading. Select a broker based on the level of service that aligns with your needs.
• Technology: Not all brokers offer online trading platforms equipped with real-time and historical pricing data or well-designed mobile applications. If you intend to trade independently without appointing someone to manage your portfolio, it’s essential to have access to these technological features.
• Fee Structure: Brokerage fees vary and can encompass transaction fees, account opening fees, account maintenance fees, and portfolio management fees. Prior to opening a trading account, thoroughly review their respective websites to ensure you comprehend all associated fees.

Step 3: Commence Your Dubai Trading Journey

Once you’ve successfully opened an account with a regulated broker, it’s time to embark on your trading adventure. Utilize either the DFM app or the DFM e-services portal to enroll for real-time data updates from DFM and receive pricing information. This data encompasses instruments listed on Nasdaq Dubai, as well as DFM.

Upon enrollment, you’ll gain access to the following trading options: 

• Listed Equities: You can currently choose from a selection of 116 listed stocks on DFM and Nasdaq Dubai. Explore and trade these stocks on the DFM website, where you’ll find comprehensive market profiles and pricing details for each stock.
• Derivatives: Seasoned investors can diversify their portfolios and hedge against price fluctuations by engaging in derivative or futures trading with DFM. DFM collaborates with eight brokers, three market makers, and four technology partners as derivative trading members. Contracts with 1-, 2-, or 3-month expiration dates are available for purchase on DFM.
• Market-Traded Funds (ETFs): DFM also offers the opportunity to trade commodities, ETFs, and trading instruments with underlying assets. Trading ETFs boasts advantages such as low management costs, lower minimum investment requirements compared to mutual funds, and excellent liquidity.
• Sukuk and Bonds: For those seeking secure and low-risk investment returns, bonds and Sukuk are excellent choices. Sukuk and bonds can yield returns ranging from 3% to 7%. At the time of this writing, DFM had 175 Sukuk or Islamic bonds and 97 conventional bonds listed for trading.

Step 4: Monitor Your Investment Portfolio While Trading Stocks in the UAE

Having grasped the process of utilizing your trading account and an approved broker to engage in stock trading and manage other investment instruments in Dubai, your ongoing responsibility is to diligently oversee your investment portfolio.