How to Fund a Deriv Account in Nigeria

Free Demo Account

Practice your trading skills by creating a free demo account. It offers a risk-free environment to test strategies, become acquainted with the platform functionality and observe market prices changing in real time. Furthermore, it serves as an excellent opportunity to evaluate risk management parameters such as leverage and profit targets. Since these funds are virtual, profits from this type of account will be lower than from a Live account. Deriv accepts various cryptocurrencies for deposits and withdrawals on Demo accounts; simply select your desired currency below and follow instructions accordingly.

Access to the market

Up until recently, Nigeria had no specific rules regarding derivatives taxation. However, recent changes have necessitated a reconsideration of how derivatives transactions should be taxed in the country.

In Nigeria, the derivatives market has been propelled forward by regulatory initiatives from both the Securities and Exchange Commission (SEC) and self-regulatory organizations. As a result, derivative trading in the country has seen steady growth over recent years.

In 2019, the SEC issued a set of rules to govern the activities of exchange-traded and over-the-counter (OTC) derivatives markets in Nigeria. These regulations established risk management protocols and back-office operations for exchanges and central counterparties (CCP). This has created the conditions for further expansion within this space.

Derivatives refer to a wide range of financial instruments that can be traded on the market. These include forward contracts, swaps and options. Derivatives provide investors with an opportunity to hedge or speculate on the future value of certain assets.

For instance, a derivative contract could be utilized to secure foreign currency against the Nigerian currency and protect investors against inflation or interest rate risk.

Derivatives are an alternative investment that allows investors to diversify their portfolio by investing in various assets. Companies may find these instruments beneficial as a way to boost profitability without risking too much with capital.

However, there are some essential aspects of derivatives that must be understood when it comes to taxation. First and foremost, one must determine if a derivative is taxable under the Capital Gains Tax Act (CGTA).

Second, it is essential to determine the location of underlying assets in a derivative contract. Under CGTA, gains from sales of chargeable assets like fixed assets, debts, options and incorporeal assets are generally taxable in Nigeria; on the other hand, gains realized from selling an instrument that isn't located here will not be subject to Nigerian taxation.

Recent changes in the derivatives space include a revision of the valuation reference rate for NSOFF products, which took effect on December 1st 2021. This adjustment has been made to guarantee NSOFFs are valued according to global best practices, helping boost investor confidence and the market's growth potential.