It is an unregulated market with absolutely no control over who uses it or what they use it for. This means there are no consumer rights or protection at all, which is something Americans know very well how to fight for.
Another enormous factor is pricing. Since it’s unregulated, many cryptocurrency traders abuse the system just like they did when Bitcoin Futures launched into unregulated exchanges.
What to avoid
The last thing you want as a US citizen is to trade CFDs on an unregulated exchange. It can lead to your money getting seized or even frozen because that’s precisely the type of thing the United States forces control over, and there’s nothing you can do about it.
Using complex mathematical formulas is another reason CFD trading happens offshore, but they’re challenging for novice traders to understand and often lose everything before they know what happened. Don’t worry, though, as this is another significant benefit as experienced traders can take advantage of novices which makes them money with every loss those new to CFD trading suffer.
So if it’s illegal in the US, it can’t be that great, right? Well, yes, and no. Let’s talk about the benefits available to US citizens who still want to take advantage of CFD trading while staying in compliance with their government’s laws, after all. That should matter more than anything else, right?
Low-cost premium accounts
Many brokers offer very basic free trials, which allow you just enough time to learn the ropes at a reduced risk level before committing any real money to your trades. Of course, they’re going to tell you about how they have this fantastic platform fully equipped with all the bells and whistles, but in reality, most people will never use them or understand them frankly because it gets too technical. Therefore, we suggest getting a premium account, so you can be one of those people who use the platform and fully understand it because if you’re going to put your money on the line, why not be as prepared as possible?
So now that we’ve gone over a bit of background information and hopefully educated you a bit more about CFD trading, let’s look at what brokers offer Americans today, especially if you find yourself living in Dubai. Saxo Bank Dubai is truly an elite brokerage, catering to those looking for quality service and groundbreaking technology, which is why they’re the only CFD provider recommended for expanding your options in unregulated markets around the world legally.
Trading CFDs in Dubai
Many people ask me: “What is a CFD?” and “How can I trade Dubai shares?“. So here’s what you should know before you start.
CFDs, or contracts for difference, enable investors to make gains on price movements without buying or selling anything.
CFD trading enables you to trade Dubai shares without owning the underlying security. For example, if you wanted to buy a standard lot (100 units) of stock in Emaar but didn’t have 30,000 AED laying around, you could still invest by simply buying one CFD contract for 100 lots.
The benefit is that you’ll only need to deposit a small percentage of the purchase price (typically around 5%), and you can trade on leverage. For example, if one standard lot of Emaar was worth 4,950 AED per share and you wanted to speculate on a price rise, you could buy 1 CFD for 100 lots (AED99,500). If the price rose 5% to 5,250 AED per share and you closed your position at that point, you’d make a tidy profit of 2250 AED (5% of 49950)
The nice thing about trading Dubai shares this way is that you don’t have to worry about the logistics or getting involved with the physical shares. If you want to sell, you simply close your position and receive the total purchase price back.