The United Arab Emirates (UAE) has a multicultural society and a vastly growing economy. The United Arab Emirates are located in the Middle East with the capital Abu Dhabi, the official language is Arabic and extends for over 83,600 km with a population of over 8,200,000 inhabitants. Its economy depends on oil, raking in 981 billion dirhams relative to GDP (gross domestic product). it is a nation that is truly blessed with riches that come in the form of oil and precious metals. the fact that it is a major hub that attracts people's attention provides it with a huge pool of investors and one of the financial instruments that investors engage in are derivatives (UAE Government, 2009)..'A derivative is a financial instrument that is a contract between two parties that derives its price from an underlying asset". Usually, the value of the main asset changes continuously as time passes. These underlying assets could be bonds, stocks or even rates of interest. Derivatives are used to hedge and mitigate risks arising from foreign exchange and commodity transactions. They ensure buyers are protected regardless of whether the value of the type of derivative increases or decreases over the time specified in the contract (Dubai Islamic Bank, 2013). a derivative as an asset, and before the creation of derivatives, a considerable number of people and organizations suffered financial losses due to the transaction of uncontrolled assets such as money. The UAE began introducing derivatives into the nation with gold and silver futures, then currency and then oil futures which are no longer traded on financial markets. those currently used in the UAE exist in the form of energy, metals, stocks, futures contracts and currency....... middle of paper...... f banks, your own private bank, Dubai Islamic Bank adheres to Shari'ah banking laws. These banking laws specify that derivatives must be tailored to clients' hedging objectives and no further. Therefore, no profits are made through the use of derivatives, but the interests of clients are protected. The expansion of the derivatives market by the UAE shows that it represents a huge part of its market and would lead to the further development and growth of the country. Although the nation is very much intertwined with the global market due to its tourism and trade reputation, this would lead to further integration of the regional market with the international market which would open up more space for future advancements and untapped benefits for the UAE. These derivatives have stimulated investment and development across the UAE and will continue to do so in the future.