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ADX and Nasdaq bring derivatives to the tableMENA

ADX and Nasdaq bring derivatives to the table

The Abu Dhabi Securities Exchange (ADX) is getting a face-lift. The Middle East’s second-largest stock exchange — where investors are able to trade in instruments like equities, bonds, indices, and ETFs — is looking to add to that roster through its recent partnership with the Nasdaq Stock Market (NASDAQ).

The inter-continental agreement will see the US-based stock exchange bring derivatives to ADX, allowing investors to trade in instruments like options, swaps, futures, and forward contracts. ADX is planning to start off with futures for single stocks and indices in Q4 2021 before expanding into other derivative products. The main value-add from Nasdaq’s end comes in the form of its proprietary Marketplace Technology. This will allow ADX investors to benefit from faster and more efficient listing, buying, and selling processes. The ADX announces this expansion in the midst of a strong year, with its General Index (a benchmark of all of its stocks’ performance) being up by 52% since the start of the year.

why it matters

This is a sign that stock exchanges across the region are increasingly becoming more sophisticated through the addition of multiple asset classes beyond the traditional single-stock trade. The Saudi Stock Exchange (TADAWUL) partnered with Nasdaq in a similar manner last year.