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When you look to make money in the investing world, it pays to do your research first.
Even though many high-risk investments in Dubai can yield huge rewards, like any other investment, not all of them will pay off, and you could lose everything you put into them.
If you aren’t prepared for this possibility when investing in options trading, then they might not be the right choice for you and your financial situation at this time.
Since listed options in Dubai pay out big bucks but only offer a short window of opportunity to cash out on those earnings with a certain percentage of accuracy (i.e., strictly within the option’s expiration date), we’re going to take a look at why they are considered risky investments even though they come with a high return, so you can decide whether or not this is the suitable investment for you to make.
A Brief history
Listed options in Dubai, including those traded on the Dubai Gold and Commodities Exchange (DGCX), were first created as an easy way for people who didn’t have the money to purchase gold, silver and other precious metals outright to participate in trading them.
Since investing in these commodities could be very profitable but also quite risky and costly if the investor made a wrong move, allowing traders to buy listed options instead allowed them access to potentially high profits without any potential risks associated with owning physical metal.
Having said that, although getting into listed options does provide a way for investors to participate in the commodities market without having to purchase and store physical metal, it’s important to note that these options are still high-risk investments.
To understand why listed options are considered high-risk investments, we need to take a closer look at what they are.
Reasons they might be risky
When you buy a listed option, you’re purchasing the right, but not the obligation, to buy a certain quantity of a commodity at a predetermined price on or before a specific date. The keyword here is “right.” Unlike when you own the entity itself, if you buy a listed option, you are not required to follow through with the purchase.
This is what makes them high-risk investments – there is always the possibility that you might not be able to sell the option for a profit before it expires, which could lead to a significant loss on your part.
For this reason, it’s essential to carefully consider all of the risks and rewards associated with listed options before investing any money in them.
While they can offer substantial profits in a short amount of time, they can also lead to significant losses if you’re not careful.
So if you’re thinking about getting into listed options trading, make sure you know what you’re doing and are fully aware of the risks involved. Only then should you consider investing.
The bottom line is that while listed options can be profitable high-risk investments, they are not suitable for everyone.
However, they are something to consider, especially if you have experience in this field or with these types of investments.
Before investing any money in them, be sure you know all the risks involved and whether or not they fit into your current financial situation and investment goals.
The listed options to trade in Dubai
There are many great places to work and live in the United Arab Emirates (UAE). One of the fastest-growing cities in the world is Dubai.
There are many opportunities for employment, education, living, or travel.
One of the most popular forms of trading is trading with options contracts. The UAE has many different companies that provide access to these types of trading; here are some examples.
ADX Capital
A company that provides investment banking services and sells listed options on various commodities like oil and gold.
Algo-Trading
A company specialising in algorithmic trading and offering a wide range of tradable assets that include options contracts.
Dubai Gold & Commodities Exchange (DGCX)
This commodities exchange offers a wide variety of futures and options products that trade on Dubai’s stock market.
NASDAQ Dubai
This exchange is focused mainly on stocks but offers some options for products.
Shariah Capital
A Sharia-compliant securities trading company that specialises in derivatives trading.
Xpress Options
Provides listed options on various assets, including stocks, indices, and precious metals contracts.
Barjeel Geojit Securities Pvt Ltd
This is another commodities, futures and options brokerage company based in UAE with many different resources for traders, including access to the Dubai Commodities Market (TADAWUL).
For information, read more here.
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