What's Inside
How Does TSE Work?
I've been trading on the Tehran Stock Exchange (TSE) for over a decade, and I can tell you it's not as mysterious as it sounds. The TSE is the largest stock exchange in Iran, founded in 1967. It operates Sunday to Wednesday (yes, the weekend is Thursday and Friday here), with sessions running from 9:00 AM to 12:30 PM Tehran time. Pre-market orders start at 8:30.
One thing that catches most beginners: the TSE uses a continuous auction system mixed with call auctions for opening and closing. No after-hours trading. And unlike NYSE, there's no designated market maker – orders match directly. The minimum tick size is 1 Rial, but most stocks trade in multiples of 100 shares. Liquidity is concentrated in the first hour and last 30 minutes.
Top Indexes and Sectors
The main benchmark is the TEDPIX (Tehran Stock Exchange Dividend and Price Index), which tracks all listed companies. But smart investors watch the Top 50 Index (market cap weighted) and the Industry Index. In 2023, the auto sector (IKCO, Saipa) and petrochemicals (Persian Gulf Petrochemical) dominated trading volume.
Here's a quick snapshot of the heaviest sectors as of my last trading session:
| Sector | Weight in TEDPIX | Top Stock | Dividend Yield |
|---|---|---|---|
| Petrochemicals | 22% | Persian Gulf | 4.5% |
| Automotive | 15% | IKCO | 2.1% |
| Banks | 12% | Mellat | 3.8% |
| Metals & Mining | 10% | Mobarakeh Steel | 5.2% |
Don't chase the hot sectors blindly – I've seen the automotive sector drop 20% in a week after subsidy cuts. Dig into each company's financials. TSE publishes them in Persian on Codal (the official disclosure portal). Pro tip: use Google Translate plugin on Chrome; it works well enough.
How to Start Investing
First, you need a Brokerage Account. As a foreigner, the process is similar but with extra paperwork. You'll need a valid passport, a residency permit (if you're in Iran), and a tax ID. For non-residents, some brokers like Omid Brokerage and Novin Brokerage accept online applications.
Steps I've taken myself:
- Choose a broker – check the Securities and Exchange Organization's list of licensed brokers. Avoid the ones with bad liquidity in their own stock.
- Open a trading account – you'll get a unique code (called 'code borse') linked to your national ID or passport.
- Deposit funds – in Iranian Rials. Most brokers accept bank transfers or checks. Minimum initial deposit: around 5 million Rials (roughly $10 at free market rates, but official rates differ).
- Start trading – use the broker's web platform or mobile app. I prefer the desktop version for complex orders.
One annoying thing: many brokers require you to attend a brief in-person training session (in Persian). If you don't speak the language, bring a translator. Alternatively, some online brokers like Kara Brokerage have English interfaces.
Practical Trading Tips
After hundreds of trades, here's what I wish I knew from day one:
- Bid-ask spreads can be huge – especially for small-cap stocks. On thin days, the spread might be 2-3% of the price. Use limit orders always.
- Watch the rial exchange rate – the Iranian rial's value against the dollar directly impacts market sentiment. When the rial weakens, export-oriented stocks (petrochemicals, metals) often rally.
- Dividend season – most companies pay annual dividends in the summer (July-August). Prices drop after ex-dividend date, but you can capture the dividend if you buy before.
- Circuit breakers – TSE has daily price limits of 5% for most stocks and 10% for ETFs. If a stock hits the limit, trading halts for 15 minutes. This can trap you in a falling market.
Personal pain point: I once placed a market order for a small mining stock, and the execution price was 4% worse than the last trade. Since then, I only use limit orders.
Risks and Common Mistakes
Let's be honest – investing in TSE is not for the faint-hearted. Currency risk is the biggest. Your returns in rial might look great, but when you convert to dollars, they can evaporate due to the rial's depreciation. For example, if the TSE gains 30% in a year but the rial loses 40% against the dollar, you're net negative. Hedging is almost impossible for retail investors.
Another trap: illiquidity. Many stocks trade only a few thousand shares per day. You might not be able to sell your position when you want. I always check the average daily volume before buying.
Insider trading is illegal but still common. You'll sometimes see a stock surge before a major news announcement. Don't chase those moves – you're likely the exit liquidity.
Finally, tax. The Iranian tax authority charges 0.5% on each stock sale (not on purchase). For foreigners, double taxation agreements are rare – consult a tax advisor.
FAQ
Can I trade TSE stocks without visiting Iran?
Yes, many brokers now offer online account opening for non-residents. You'll need to upload notarized copies of your passport, a bank reference letter, and sometimes a power of attorney. Some brokers require you to be physically present for the initial verification – check with Omid Brokerage or Kara Brokerage; they have remote options.
What's the minimum investment for a foreigner?
There's no legal minimum for trading, but brokers often set a threshold of around 10 million Rials (about $20 at open market rates). Keep in mind that transaction fees (brokerage + tax) are about 0.5% each way, so small trades eat into profits.
How do I repatriate profits from TSE?
This is the tricky part. The Central Bank of Iran allows foreign investors to repatriate capital and dividends, but the process is bureaucratic. You'll need to register your investment with the Foreign Investment Promotion and Protection Center. Approval can take 3-6 months. Most investors reinvest within Iran rather than repatriate. I keep my profits in rial and use them for local expenses, then move only the original capital out.
Which sectors perform best during high inflation?
Historically, commodity exporters (petrochemicals, metals) and consumer staples (food, pharma) outperform. Banks often lag because interest rate controls squeeze margins. I personally overweight petrochemicals because they benefit from both inflation (rising product prices) and rial depreciation (higher export revenue).
This article was fact-checked against current TSE regulations as of the time of writing. Always verify with official sources before investing.
