Online stock trading in UAE is growing at a pace every year. Here are some important points that you need to know before you start Trading in the UAE. Click here to know more!
How to Start Stock Trading in UAE? 4-Step Guide
Have you considered investing in the UAE stock markets? This post lists all the steps that you need to take to start stock market trading in the UAE. Keep reading.
The UAE is an emerging stage for stock investment throughout the world. Only recently, the pace of new entrants has started growing. There are 3 major stock exchanges in the UAE, namely,
- Abu Dhabi Securities Exchange (ADX)
- Dubai Financial Market (DFM)
- Nasdaq Dubai
Securities and Commodities Authority (SCA) governs the online stock trading in UAE. Here are the steps that you can follow to get started as a trader in the UAE.
Step-1: Obtain a National Investor Number (NIN)
It is mandatory to open a Demat Account with the local depository of UAE, i.e., the Clearing and Depository System (CDS). The role of this depository is to hold the securities that you have purchased in your account. To keep this record, a unique identification number called NIN is issued to you. You can apply for this number through the online portal of the DFM.
|Type of Residents||Identification Documents||Documents for Bank Transfers|
|UAE Nationals||● Emirates National ID||● Bank Statement
● Certified Bank Letter with bank account details
● Bank Account must be in the name of the investor
|● Emirates National ID
● Residential VISA
|Minors below 21 Years||● Guardian’s National ID
● Guardian’s Passport
● Guardian’s Signature
Step-2: Appoint a Financial Consultant
It is recommended to take help from a financial consultant. Hence, appointing a financial consultant who has the license to trade with your target UAE stock exchanges should be your top priority.
Step-3: Invest Your Money Wisely
Stock markets carry market risks and can be a scary gimmick for a newbie. Hence, it is essential to know about the basics of stock market investments. The following cautions can help you get started:
- Identify the stocks that you want to invest in based on your investment objective and risk profile.
- Put only 10% of your total investments in high-risk stocks.
- If you have less time to devote to the market study, then you should choose investment funds.
- Try to build a diversified portfolio by investing across asset classes.
- Avoid intraday trading and derivatives stocks as they are known to be riskier.
Step-4: Monitor Your Investments
While they carry high return potential, stock markets are highly volatile due to trade fluctuations. Hence, it is important to keep regular track of the new developments and the performance of your stocks. You can make regular changes to your portfolio so that your investments match the market scenarios and your investments help you achieve your financial goals while keeping your risk level under check.