Dubai has historically been an international hub for the physical trade of not only gold, but also many other commodities. However, until 2005, Dubai did not have an exchange where commodity players could hedge their exposure to commodity and currency prices. The establishment of a derivatives trading marketplace in Dubai was therefore a key logical step for enhancing the growth and development of the local economy. When launched in 2005, the Dubai Gold and Commodities Exchange (DGCX) was the Middle East's first ever derivatives exchange.The introduction of DGCX was a strategic move by Dubai not only to strengthen the commodities
and forex market by providing hedging tools that help manage risk but also to diversify investment opportunities for regional investors. DGCX is a subsidiary of Dubai Multi Commodities Centre (DMCC with a mandate to enhance commodity trade flows through the Emirate by providing the appropriate physical, market, financial infrastructure and services required. Over the last years, the Exchange has pioneered several futures and options contracts in the metals, energy and currency sectors that not only transformed the region's derivatives market but also provided exciting new opportunities for investors.
Benefits of Trading on DGCX
- Guaranteed settlement and reduced counterparty risk provided by Dubai Commodities Clearing Corporation (DCCC), a subsidiary 100% owned by DGCX
- A simple fee structure – one fee for all participants. All participants also pay the same margin, whether commercial or non-commercial entities
- An opening to both regional and international liquidity pools
- Robust risk management and surveillance systems
- Uninterrupted trading hours from 7:00am – 11:30pm (GMT +4)
- Regulated by the Securities & Commodities Authority (SCA)
The UAE enjoys an ideal location between the time zones of Europe and the Far East and DGCX offers a range of products from the precious metal, base metal, energy and currency sectors.
Gateway to Markets in the East
Dubai's location in a time zone midway between the Far East and Europe has traditionally made it an attractive hub for accessing the larger market surrounding it. The city's strategic geographic location has allowed DGCX to offer extended trading hours to global traders and integrate regional and international trading. In fact, DGCX is increasingly serving as a bridge between the time zones of the Far East and Europe, contributing to the smooth flow of the global trading cycle, especially during the gap between the closing of the Far East markets and the opening of European markets.
DGCX recently extended its trading hours by an hour and a half to provide market participants a 30 minute window before the opening of derivatives exchanges in South Asia, which allow them to take positions based on overnight indicators, putting them ahead of the momentum curve.
New Technology Infrastructure
Following a strategic partnership with Cinnober, DGCX activated its trading platform, the EOS Trader Platform in March 2013. Greater efficiency and liquidity facilitated by the new platform will support the launch of new DGCX products.
The platform gives DGCX the ability to offer contracts in multiple currencies including UAE dirhams. The new platform will also allow DGCX to provide multi-currency settlement facilities and 24-hour market support. By virtue of an advanced collateral valuation facility, the new platform also gives Members the option of providing different kinds of collateral, in addition to cash and bank guarantees, including government bonds and Dubai Gold Receipts. The platform also facilitates new revenue opportunities by allowing DGCX to extend clearing house facilities to other exchanges and institutions.
EOS, the new DGCX technology platform, will give the Exchange the ability to offer contracts in multiple currencies including UAE dirhams. Going forward, the new platform will also allow DCCC, fully owned clearing corporation of DGCX, to provide multi-currency settlement facilities.
With its state-of-the-art matching engine, EOS is geared to the needs of high-frequency traders, who require ultra-low latency platforms to trade productively and probably.
The core trading and clearing applications are built on Cinnober’s TRADExpress and Real Time Clearing platform, Scila Surveillance System, a leading market surveillance system. This will provide a multi-asset solution that delivers market-leading functionality, speed and throughput capacity.
- FOW Most Innovative New Contract in the Currency category 2016 Awards Asia
- Regional Exchange of the Year 2016’ by Global Investor on the 26th October 2016
- FOW Exchange of the Year 2014 (MEA)
- FOW Emerging Exchange of the Year 2014
- FOW World Second-Fastest Growing Exchange 2012
- The “Best Global Commodities Exchange 2013” Award by MENAFX
- JFEX Best Middle East FX Exchange 2013 FOW
- Contract of the Year 2012 – INR Options JFEX Best Middle East FX Exchange 2012
- Global Banking & Finance Review – the world’s ‘Best Global Commodities Exchange 2012’
- FOW First Relationship management & fee structure 2008
- FOW Fourth Overall Exchange 2008
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