Lead Machine Pink 160x1200

Lead Machine Pink 160x1200

iTWire TV 705x108

Wednesday, 25 May 2022 12:51

What are the risks of CFD trading in Dubai?

By Saxo Bank
What are the risks of CFD trading in Dubai? m. on Unsplash

GUEST OPINION: When you trade CFDs, you are essentially speculating on the price movement of an underlying asset, which means that you are effectively betting on whether the asset price will go up or down. While CFDs can be a very lucrative way to trade, it also comes with certain risks.

CFDs are popular in Dubai because they allow traders to speculate on the price movement of an asset without actually owning the asset, which means that you can trade on a wide variety of assets, including stocks, indices, commodities, and currencies. CFD trading is also leveraged, which means you can control a significant position with relatively small capital.

What is CFD Trading?

CFD trading involves the speculation of prices of underlying assets. The complete form of CFD is ‘Contract For Difference’. In simple terms, CFDs can be defined as an agreement between two parties to exchange the difference in the value of a particular asset at the closing and opening time of the contract. It is a derivative product that helps traders profit from falling and rising markets without owning the underlying asset.

For example, if you think that the price of gold will fall in the future, you can sell gold CFDs, and if your speculation turns out to be correct, you will make a profit. Similarly, if you think that gold prices will rise in the future, you can buy gold CFDs and make profits.

What are the risks associated with CFD trading?

Here are the main risks associated with CFD trading:

Risk of losing all your money

The first and perhaps most apparent risk is that you could lose money if your speculation turns incorrect. If the asset price you are trading moves in the opposite direction to what you were expecting, you will make a loss, which all traders need to be aware of, and you must never trade with money that you need for other important payments in your business or personal budget.

Counterparty risk

Another risk you are bound to encounter is the risk of losing some money if the market moves against you, also known as counterparty risk. It remains a significant factor in your overall profitability.

Risk of fraud and theft

Another risk is fraud or theft. Unfortunately, there have been several cases where unscrupulous brokers have taken advantage of unsuspecting investors. It is vital to trade with reliable and reputable firms adequately regulated by the Dubai Financial Services Authority (DFSA).

Political instability

Finally, there is also the potential for political instability in Dubai, leading to sharp market swings. While this is relatively unlikely at present, it is something that you should be aware of if you are considering trading in this region.

CFDs are leveraged

Another risk associated with CFD trading is that of leverage. When you trade CFDs, you essentially borrow money from your broker to trade, which can magnify your profits and losses, so it is essential to be aware of this before starting trading.

CFDs are not regulated in the same way as traditional investing

Finally, it is also worth noting that CFD trading is not regulated in the same way as traditional investing, which means that there is no guarantee that you will be able to recover your money if things go wrong. Make sure that you research any broker you are considering using carefully before committing to trade with them.


While there are risks associated with CFD trading in Dubai, traders can mitigate these by choosing a reputable broker and being aware of the potential political risks. You can trade safely and profitably in this exciting market with careful planning and research. Beginner traders interested in CFD trading should contact a reputable and experienced online broker from Saxo Bank and trade on their demo account before investing real money. Traders can also practice different trading strategies on the demo account.

Disclaimer: The information in this article should not be considered financial advice or a recommendation. ITWire suggests that before acting on any financial information, you should consult your qualified financial adviser, who will consider your objectives, financial situation or needs.

Read 965 times

Please join our community here and become a VIP.

Subscribe to ITWIRE UPDATE Newsletter here
JOIN our iTWireTV our YouTube Community here


The past year has seen a meteoric rise in ransomware incidents worldwide.

Over the past 12 months, SonicWall Capture Labs threat researchers have diligently tracked the meteoric rise in cyberattacks, as well as trends and activity across all threat vectors, including:

Encrypted threats
IoT malware
Zero-day attacks and more

These exclusive findings are now available via the 2022 SonicWall Cyber Threat Report, which ensures SMBs, government agencies, enterprises and other organizations have the actionable threat intelligence needed to combat the rising tide of cybercrime.

Click the button below to get the report.



It's all about Webinars.

Marketing budgets are now focused on Webinars combined with Lead Generation.

If you wish to promote a Webinar we recommend at least a 3 to 4 week campaign prior to your event.

The iTWire campaign will include extensive adverts on our News Site itwire.com and prominent Newsletter promotion https://itwire.com/itwire-update.html and Promotional News & Editorial. Plus a video interview of the key speaker on iTWire TV https://www.youtube.com/c/iTWireTV/videos which will be used in Promotional Posts on the iTWire Home Page.

Now we are coming out of Lockdown iTWire will be focussed to assisting with your webinars and campaigns and assistance via part payments and extended terms, a Webinar Business Booster Pack and other supportive programs. We can also create your adverts and written content plus coordinate your video interview.

We look forward to discussing your campaign goals with you. Please click the button below.


Share News tips for the iTWire Journalists? Your tip will be anonymous




Guest Opinion

Guest Interviews

Guest Reviews

Guest Research

Guest Research & Case Studies

Channel News