This document, amana’s transparency statement, is the foundational work for our collective. It lays out how amana treats each financial product in its system for pricing, risk management and revenue generation. 

amana offers a variety of exchange-traded stocks. These stocks are traded on an organized exchange, an approved alternative trading venue, or directly with specialists or market makers that provide liquidity in those stocks. The price of each transaction must meet certain regulatory requirements, and these requirements tend to differ by country.

In the U.S., for example, there’s always a nationally recognized best bid and offer, sometimes referred to as the NBBO. In practice, that means brokers are generally required to execute trades at or better than that price. All amana exchange-traded stocks are executed in a fully compliant manner determined by each country's best execution rules.

For many years, brokers who executed stocks in the U.S. stock market would charge commissions to execute their clients’ orders—a fee for the service they provided. In addition to these commissions, they’d generally structure deals to loan out their clients’ stocks to others who wanted to short stocks and earn extra money on their clients’ portfolios. They would also structure execution arrangements directly with specialists or market makers, on or off the exchange floor, to send their clients’ orders to those market makers. In return, brokers would receive a payment for their order flow (PFOF), and the client could benefit from a small price improvement and would not be filled worse than the NBBO price.

Over the recent years, some companies started to do away with commissions and just make their money on the payments they receive. There was no need to charge more commission on top, as that seemed like a double dip, so the result was a cheaper experience for many investors.

Many traditional companies couldn’t afford to cut their commissions or, more likely, didn’t want to since it cut their profit margins. Today, however, clients have succeeded in a more cost-effective investment experience, and this has helped open access to a much larger base of customers through fractional investing. We believe this is a positive development. PFOF is a hot topic, but amana believes that while the regulations regarding this practice should evolve, retail customers have benefited from lower costs and better access.

So, at this time, this is how we do things: when you give us your stock order, we send it to a market maker or an exchange. They execute your order at a better price, or at the NBBO, and give us a small payment for doing that. We take that payment and use it to pay for the technology, the people, and everything that you know as amana today. We also generate additional revenue by loaning out stock from our portfolio.

amana hails from the MENA region. Our community is for the region and built by people who understand it. How could we offer stocks without offering regional stocks? When we looked into the regional space, we were very surprised by what we saw. It’s very expensive and needs to modernize. Basically, the rates to execute a trade are all about the same, but with volume, you can get some breaks. The rates all start out high for individuals, though, and that’s not fair.

So, we decided that trading regional shares is going to be on us. We don’t make any money on this at all, and this is in writing. We take the cost that we’re charged by our clearing brokers, and we only charge you that. It’s that simple: our cost is your cost. We want to build our community in the region, and this is a symbol of that. And when we grow, these rate costs will go down even more. Then, maybe the other brokers in the space and the exchanges will get the point and make lowered rates more accessible to all.

“We take the cost that we are charged by our clearing brokers, and we only charge you that. It’s that simple: our cost is your cost.”

This is one of the most exciting parts of modern finance. Risky but also, we think, the future. Before we talk about how we trade crypto, we want to share our views on crypto assets and blockchain in general. We believe that blockchain is the future. We believe that digital assets are the future of all things with a measurable or intangible value placed on them by people. We believe they represent one of the most important evolutions in finance in the last century and that the future of financial markets is a decentralized, tokenized financial marketplace.

Now, for where we are today:

Today cryptos/digital assets are all over the place. You have blue chip coins like Bitcoin and Ethereum, up-and-coming coins like Polkadot and Avalanche, and then you have social altcoins like Doge or Shiba Inu. It is a broad and fast-moving market, and it is risky. These assets tend to move around in 5% moves quite often, and some cycles lead to huge sell-offs and rallies. For example, the value of Terra fell by 99% within a few weeks in 2022. We want our clients to be careful.

Here are some of the crypto assets we offer:

In the short term, while things evolve and mature, that kind of volatility is likely to continue. When new things like this occur, and the evolution of markets kicks off—usually in the early days—some companies will take advantage of the volatility by saying things are easier than they are, or at minimum, implying it under a “FOMO” type of marketing ploy. We think investors should approach that kind of messaging with caution. As much as we believe in the future of DeFi, blockchain and the digitization of things, we are concerned that investors don’t understand the risks of this new space, and those risks are sometimes minimized for profit. At amana, we’ll always be transparent in how we work and make sure you understand when something is risky or when we think the hype is dangerous.

How do we make money? We’re working through centralized exchanges (CEXs), decentralized exchanges (DEXs), and direct-to-market makers, who make pricing inside the CEX and DEX world to get the best price possible for our community. We make our money on the difference (markup) between the spread that we charge and the spread that we must pay when we execute. That markup is how we make our money.

Sometimes we get charged a fee by CEXs, which we pay out of our spread revenue. We pay it—we don’t pass it on to you additionally. It’s an all-in price when you trade with us. Every crypto trade goes outside of amana to the CEX, DEX or market maker. This is our model. We believe our pricing is competitive. And the more of us there are, the better our price will become.

Before we move on to derivatives, let’s talk about how we structure our crypto products. We don’t offer you a crypto wallet. We are a regulated financial firm across many regulatory jurisdictions. We have Anti-Money Laundering (AML) and Know Your Customer (KYC) rules that we must follow, so we hold all the coins in an institutional wallet with our custody providers or with the CEXs directly. You send us fiat currency, which you want to buy a digital asset with; we then buy the digital asset and hold it in our institutional wallet; when you want to sell, we sell it for you. Similarly, when you want your fiat currency back, we send it back. There are no additional fees for that process outside of the way we make money, as outlined above. We think it’s the best way for the masses to invest or trade crypto through regulated financial companies right now.

Derivatives are financial products that track another underlying thing. Generally, they use leverage so you don’t have to put up the full value of the thing you want to buy or sell, and that amplifies the loss or gain due to that leverage. You can trade derivatives on the S&P 500, gold, shares of stock like Tesla, foreign exchange like the EURUSD, and more. There are derivatives on almost everything, and you can trade them all from a single account and choose to use leverage or not.

When using leverage to make a profit, also keep in mind that it will amplify any losses. Derivatives are one of the most dangerous financial products out there. In fact, the vast majority of people that trade derivatives will lose money. Be careful. In our system, we put a big lightning bolt symbol on these products to make it clear to you that they are “electric.”

So, how does amana treat these things, and why do we even have them? We have them because they’re popular, and people ask to trade them. They are also useful because they allow people to trade the largest array of “stuff” easily, in a single account. Our never-ending job will be to educate people about leverage and the dangers of derivatives. However, if you want to trade stocks from every global exchange in a single account, along with gold, EUR/USD, oil and Bitcoin, you can do it all and more with a derivative. When using derivatives, take it slow. Don’t use a lot of leverage, or you’ll quickly become a part of the 80%.

So, what do we do? How do we make our money? For derivatives, we make our money on:

1. The spread.
2. The management of the risk on the transactions.
3. The financing for providing the leverage.