Abu Dhabi Securities Exchange (ADX) has approved ‘Pattern Day Trader’ or short-term trading to accelerate the market’s pace, attract more investors and raise investment volumes.
The product provides a four-fold increase on investment capital, as the return on investment increases, for up to three trading days, ADX said in a statement. The initial margin should not be less than 20 percent of the value of securities to be purchased in the short-term trading account, and it should be cash or UAE-listed securities.
The minimum trade value should be 100,000 dirhams ($27,225), and proceeds must be deposited in an account for short-term trading.
ADX issues approvals on the brokerage firm's requests, based on conditions, its controls and technical standards. The product is available through brokerage firms licensed by ADX and the securities and Commodities Authority (SCA).
“This innovation will provide a greater degree of freedom to investors of all professional orientations. The new product also adds a greater degree of variety to the suite of products available for investors,” said Khalifa Salem Al Mansouri, Chief Executive of ADX, in a statement.
“The Pattern Day Trader is based upon a modern, forward-looking and innovative global approach to finance which has high levels of transparency,” he added.
(Writing by Nada Al Rifai, editing by Seban Scaria)
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