This Western-Asian country is one of the most important trading ports in Asia. With a population of only 5 million and a GDP of $79 billion, the country enjoys a reasonable standard of living. The country is located in a very strategic location right next to the Indian Ocean, and it has been utilizing this advantage to a great degree, growing its free-market economy steadily and consistently.
The single biggest driver of the country’s economy is its production and exportation of crude oil, which the country possesses in huge quantities. In fact, oil represents over 2/5 of the country’s whole GDP. This is definitely a recurring theme for the countries in the region, with oil being their “golden card”.
However, Oman is a bit different in this regard, as they are fully aware of, and acknowledge, the fact that these oil reserves are limited, and won’t be lasting forever. As such, Oman has been making some serious efforts towards diversifying and thereby better preparing for the future. This, of course, has aided them in creating a much better Forex environment and opened up a lot of avenues for them to grow.
In this guide, we will be making an overview of Forex trading in Oman. The guide will be aimed at the beginners and will be discussing important factors such as Oman’s regulatory environment, how the said environment works and what are its rules and regulations, how these regulations work to create a safe and better environment, who are the legal entities in charge, what are the opportunities available, and much more. After reading this, an Omani trader will be better equipped to get started with Forex trading in a productive and manner.
List of top Forex brokers in Oman
Choosing a Forex broker correctly is one of the key pieces of having a successful, productive, and enjoyable Forex trading experience. Why? Because so much depends on it, such as your safety and security, your ability to enjoy the process, the opportunities that the broker can provide, and more. As such, you should never try to save time on making proper research.
However, the great thing is that we have already done the research, so you won’t have to! Below are the Forex brokers in Oman that we believe to be of the highest quality, both in terms of the service they provide, as well as the safety and security that they guarantee. Make sure to check out all the brokers below, and choose wisely!
BROKERS GO HERE
Forex regulation in Oman
In Oman, the regulation of the Forex environment is the responsibility of the Capital Markets Authority (CMA) of Oman. CMA was created back in 1999 and has since then been responsible for a wide array of tasks, among them mainly making sure that all the market participants are complying with the relevant rules and guidelines, which it constructs itself. Additionally, CMA is in charge of overseeing and managing the Muscat Securities Market, the only stock exchange in Oman, which lists the thirty of the most important companies in Oman.
What we commonly notice is that many people assume, that trading in Oman is unsafe, which is definitely not true. Regulators like CMA are hard at work for making sure that Oman provides a safe and reliable environment for its traders. To achieve this, MMA and other regulators have introduced all sorts of different rules, restrictions, and regulations that are all aiming to improve the market conditions as much as possible. Let’s discuss what these rules are, and how exactly they work to improve the conditions and create a safer environment for the market.
In Oman, the licensing approach is a bit different as compared to many other countries from Europe, as an example. While brokers have an option to be locally-regulated and licensed, very few brokers actually go that route. Due to the high costs associated with doing so, most brokers that operate in Oman usually are licensed from other regulators.
In general, authorities advise strictly against doing so, as in case you have some kind of a dispute with your broker, due to them being outside the jurisdiction of your country, the government will not be helping you out. As such, whenever it’s possible, it’s always preferable to go with a broker that is locally-based in your own country.
With that being said, there is absolutely nothing wrong with going with a broker that is licensed somewhere else. Tons of traders do this, and in fact, most of the great brokers you’re going to encounter in Oman will very likely be from other countries. The only thing to remember here is to always make sure that you’re only going with brokers that are licensed and regulated by only competent international authorities such as FCA, CySEC, etc.
Restrictions and practices adopted on the Omani Forex market
While as we mentioned most of the brokers that you will be dealing with in Oman will actually be licensed in other various places, and therefore the exact specifics as it regards to the law will always be a bit different, let’s discuss what the actual regulatory framework and approach of Oman look like.
- Leverage specifics: For those interested in utilizing leverage when trading in Oman, what they should remember is that limits are very different and varying, depending on the broker themselves. A broker the leverage range which is most common in the world, the 50:1 range. Alternatively, they may offer the 30:1 range that the ESMA recommends. Or, some of them may even offer leverage as high as 1000:1. It will, again, depend on your broker, so make sure you’re doing the appropriate research before you commit to using leverage. Please note, that we would recommend proceeding with great caution when using leverage. While it does open up doors to a lot of profit possibilities, it is also one of the quickest ways of losing huge amounts of money, so it’s really a double-edged sword.
- Enforcement of transparency: While, as you just saw, the restrictions on usage of leverage and risky instruments like CFDs are much more relaxed and liberal in Oman, there are still some things that the brokers are obligated to do in order to maintain safety. For every broker that offers highly leveraged products and CFDs, they are legally required to notify and inform their customers about the exact risks associated with these products. As an example, the brokers are required to put forward disclaimers and advise of the exact percentage of the customers that are losing money by trading with these instruments. This is a very necessary and useful practice, as most of the people who lose a large amount of money with leverage are beginners who don’t know what they’re actually getting into. Thus, increasing their awareness is a huge help.
- Account segregation: In Oman, like many other Forex environments in the world, your funds are given extra protection thanks to the account segregation rule. What does this mean? In a nutshell, this means that your broker is not allowed to keep your funds in the same account where they keep their own funds. Instead, the clients’ funds need to be kept separately, safely tucked away where the brokers won’t be able to misuse the funds, and also, makes it so that in case the broker goes into debt or goes bankrupt, the money of the clients will not be affected.
Forex trading and Islam in Oman
Oman is a predominantly Muslim country. If you know a bit about Forex trading in general, you will likely be aware, that Forex trading and Islam “do not mix well”, so to say. Or, at least, this was the case for many years. Essentially, the way Forex works and more specifically the way brokers themselves make a profit, is in contradiction with the values and teachings of Islam, specifically the Shariah Law. In Shariah Law, Usury is considered to be Haram, which basically means that it’s strictly prohibited, and is in direct contradiction with the main values and teachings of the religion.
For many years, this has been a serious problem for the brokers and traders alike. Considering how much potential the majority-Muslim countries had as Forex markets, the brokers had to come up with some kind of a different approach to circumvent this issue. The requirement was to come up with a system that would make it so that the brokers were not charging interest, which was the issue in the first place. Long story short, the brokers came up with swap-free accounts, which would not be charging overnight interest, but charging the customers in some other way, which is more conducive to the Muslim ways. These are now known as “Islamic Accounts”, and are offered by pretty much every major international broker.
If you are an Omani citizen practicing the Muslim faith and were hesitant about getting started due to this issue, then rest assured, that you can trade without any issues at all, thanks to the amazing option of Islamic accounts. Check out the brokers from our list, and you will be able to see what kind of trading options there are available for Islamic traders in Oman.
What is the Omani economy like, and what should you trade with Omani Forex brokers?
As you can see, the trading environment in Oman, and specifically in its safety and security aspects, is not all too shabby as many people may have initially thought. The truth is, there was a lot of effort that went into it, and the progress has definitely been appropriate. Now, let’s take a look at what you can actually expect as a trader in Oman, meaning what is the economy like, what are the challenges and opportunities that the market has, and much more.
Oman’s national currency
The country’s currency is called the Omani Rial and has been for many decades now. The Omani Rial is quite a strong currency, with one Rial equaling around $2.60 as of this writing. As mentioned, one of the biggest reasons for this being the case is the country’s large reserves of oil, as well as many economic reforms that it has passed with an effort of reinventing itself into a better economic and political force.
The main authority that is behind managing the country’s currency is the Central Bank of Oman (CBO), which itself was founded back in 1974, replacing the Oman Currency Board. Expectedly, the main function and responsibility of this body are to maintain the stability, prosperity, and best interests of the country’s currency and its state.
What about trading the Omani Rial? Is it possible? The answer is that it is for sure possible, but it is generally not advised for beginner traders. OMR is considered to be an “exotic” currency, which is much more of a risky endeavor as compared to going for the major currency pairs such as USD/EUR.
Oman’s main commodities and trading opportunities
As we have already mentioned before, oil is Oman’s most crucial commodity, and it hugely depends on it. When you look at the export numbers of the country, this becomes even more apparent. Obviously, the biggest export of the country is mineral fuels and oil, with the total export number of $27.7 billion, representing a share of more than 77.2% of all the export of the country.
When you compare the rest of the country’s exports to oil exports, the numbers are not so impressive anymore. Its next biggest export would be organic chemicals, with only a $1.7 billion total and a 4.8% share of the market. That’s a $26 billion drop from the export numbers of oil, and obviously, the difference in numbers is extremely high. The third biggest export of the country is iron and steel at $1.4 billion (4%), which would be the last one of its exports to cross over a billion-dollar mark. The list of the remainder of its major exports consists of fertilizers ($841.5 million, 2.3%), plastics and plastic articles ($765.2 million, 2.1%), ships & boats ($754.6 million, 2.1%), aluminum ($640.4 million, 1.8%), ores, slag and ash ($352.3 million, 1%), gems and precious metals ($231.6 million, 0.6%) and salt, sulfur, stone, and cement ($204 million, 0.6%).
As you can probably see, the export numbers lack a lot in balance. While Oman provides some great oil-trading opportunities, it severely lacks in other sectors, and while there still are a lot of opportunities for profit this way, it does put you at a disadvantage of having to rely too much on one single asset. In investing, it is always a prudent strategy to never put your eggs in one basket, so this should definitely be a point of consideration for anyone interested in Forex trading in Oman.
This was an overview of the economic environment and trading opportunities available in Oman. There is obviously a lot more to it, but it comes with the experience. For a beginner, the main thing to remember is to always make appropriate and necessary research before engaging in any trading activities, and seek out and use all the guidance you can possibly get. In this market, the room for improvement and increasing knowledge is limitless.
So, what’s the verdict on the Omani Forex trading market?
Oman is often not considered a safe and viable Forex environment. However, as we have learned from this guide, this is definitely not the case, and the Forex market is growing in popularity and capability decently well, and will likely continue to do so as the country becomes more and more involved in international trade and makes bigger and bigger efforts towards diversifying its economy and exploring new avenues.
If you are an Omani citizen interested in Forex trading but are still on the fence, then we can say with full certainty, that there are tons of opportunities to have a safe, constructive and positive trading experience in Oman. If you feel that you’re ready to put your new-found knowledge to good use and begin your trading journey as an Omani trader, make sure to check out our list of top Forex brokers in Oman, so you can get started with the broker that can give you the biggest opportunities and chances for success.