Sat, Oct 01, 2022

Despite a large amount of Muslim investors, not all brokers provide an Islamic Forex account. For those who have no clue what is behind it, let us give a short explanation of the requirements. Based on Islamic law, often referred to as Sharia law, Muslims are not allowed to make earning interest on their giving. This law also concerns the interest earned on any banking and investing. Hence the need for special accounts rose, resulting in various brokers providing these traders the ability to trade Forex in accordance with Sharia law by opening an Islamic Forex account where interest-free or in other words Swap free Forex trading is possible. 

Islamic Swap Free Forex Brokers

This is Forex Explore section where we expose Forex brokers with Muslim friendly features and trading conditions. here you can compare and read reviews and comments by other traders with experiences. Below you can choose Islamic Forex broker that suits your requirements the most. Here are brokers that can easily turn the traditional Forex account into an Islamic Forex account in couple of clicks and add all the features you might need for great trading experience without breaking the laws you believe in. You can choose to get a full picture by reading the complete reviews of our recommended Islamic Forex brokers.

An Islamic forex broker account, sometimes referred to as swap-free accounts, are a trading accounts for Muslim clients who are unable to earn or pay the interest due to their religious beliefs. An Islamic Forex account option is available from many of the best Islamic forex brokers that are listed in the review above.

Swap-free trading accounts do not pay or earn swaps when overnight positions are held on most markets within the forex, commodities and indices categories (keep in mind that cryptocurrencies such as bitcoin are different again). In place of overnight interest, the broker will either charge a flat rate financing charge or simply rely on the spread to make money from each trade opened and closed by you.

If your trading strategy relies on certain exotic pairs, check with each individual broker that your particular pair is covered, before opening an account.

   

Broker ReviewsRatingDemoLeverageIslamic Swap FreePlatformsMin DepositPayments
LiteFinance 8yes1:500islamicMetatrader 4, Metatrader 5, WebTerminal10 Skrill, Webmoney, Bitcoin, Advcash, Credit Card
XM8yes1:888islamicMetaTrader 4, Metatrader 5, XM Webtrader5Credit/Debit Card, Neteller, Skrill, WebMoney, Bank Wire Transfer
AvaTrade 7yes1:400islamicAvaTrader, MetaTrader 4, MetaTrader Floating Spread, Mac Trading, Web Trading, Mobile Trading, Automatic Trading, AvaOptions100Credit Cards, Debit Cards, Skrill, Wire Transfer, PayPal, Neteller, WebMoney
InstaForex 7yes1:1,000islamicMetaTrader 4, Metatrader 5, Webtrader1Some local Bank transfers, PayCo, AstroPay, Cryptocurrency
FxPro5yes1:500islamicFxPro cTrader, FxPro cTrader Web, MT4 Client Terminal, MT4 MultiTerminal, MT4 WebTrader, MT4 Premium 100Credit/Debit Card, Bank Wire, PayPal, Neteller, Skrill
FXCM5yes1:200islamicTrading Station II, MetaTrader 4, Active Trader, Forex System Selector 250Credit/Debit card, Online Check, Bank Wire, Paper Check
FXDD3yes1:200islamicMetaTrader4, FXDD Trader, Power Trader, FXDD Auto, MTXtreme100Wire, PayPal, Check, BPS
iFOREX3yes1:400islamicFXnet Trader100credit cards, wire transfer
Tickmill3yes1:500islamicMetaTrader 4, Webtrader100wire transfer (commission are charged), credit/debit cards, Skrill, Neteller, FasaPay, UnionPay and WebMoney
Pepperstone3yes1:500islamicMetatrader 4, Metatrader 5, cTrader, cAlgo, cMirror200bPay, credit cards, Paypal
Hotforex2yes1:1,000islamicMetatrader 4, mobile platform, rapid trader fix/api5credit cards, skrill, Unionpay, neteller, wire transfer, webmoney, fasapay
Alpari2yes1:500islamicMetaTrader 41Debit or Credit Card, Wire Transfer
Blackwell Global2yes1:200islamicMetaTrader 4, Blackwell Pro, Mobile2000redit/debit cards, Neteller, Skrill, Wire transfer
EasyMarkets2yes1:100islamicMetatrader 4, EasyMarkets web-based platform100credit cards, neteller, Skrill, Webmney, wire transfer
Markets.com2yes1:200islamicMeta Trader 4,MarketTrader, Market WebTrader, Market Java Trader, Market Mobile Trader, Market WAP Trader, Market iTrader, Market AutoTrader100Credit/Debit Cards, Wire Transfer, Webmoney, Local Payments
eToro 1yes1:30; 1:1 for Crypto CurrenciesislamiceToro Platform200Credit Cards, Debit Cards, Paypal, Neteller, Skrill, Webmoney, Wire Transfer
FXOpen1yes1:500islamicMetaTrader 41Wire, WebMoney, AlertPay, CashU, c-gold, PerfectMoney
AdmiralMarkets1yes1:200islamicMetaTrader 410Wire
FBS1yesup to 1:3,000islamicMetaTrader 4, Metatrader 5, Webtrading1credit cards, fasapay, Indonesia local banks, Neteller, okpay, perfectmoney, Skrill, Webmoney, wire transfer, Thai local banks, Exchangers, Malaysian banks and Bitcoin by Skrill
AGEA0yes1:500islamicStreamster, MetaTrader 41Credit Cards, Wire, Skrill, Webmoney, e-Dinar, Neteller, FasaPay, Perfect Money
Oinvest0yes1:200islamicMetatrader 4200Skrill, Neteller, Credit Cards
TrioMarkets0yes1:300islamicMetaTrader 4, Sirix Webtrader100Credit Card, Wire, Skrill, Neteller, Paypal and CashU
GrandCapital0yes500:1islamicMetaTrader 4, WebTrader10Credit card, Neteller, Webmoney, CashU, Fasapay, Scrill, Webmoney
FXGrow0yes200:1islamicMetaTrader 4, NetStation100Credit/Debit cards, Skrill, Neteller, OkPay, CashU, WireTransfer
Abshire-Smith0yes1:200islamicVertex fx, Metatrader 4, straticator500CashU, Neteller, Skrill, Wire Transfer
LH-Crypto0yes1:500islamicMetatrader 4, Metatrader 510Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Monero, DASH, Ripple, NEO, Visa, MasterCard, Web Money, QIWI, wire transfer
HonorFX0yes1:500islamicMetatrader 5100Credit Cards, Neteller, Skrill, Paypal, Bitpay, Fasapay, Perfect Money

What makes a Forex Islamic account halal? Forex brokers wishing to attract Islamic clients have are a few basic principles they must apply to at least segment of their offering, thus creating the Islamic account. These concepts are a bit different from what the western world might understand as traditional banking or trading. Below, we explain three of the key concepts of Islamic law most relevant to the question of an Islamic Forex account.

Riba

“Riba” means increase, excess or addition and it refers to financial interest. It is seen as a type of usury and selfishness that can lead to hoarding. The charging of usurious interest as a business practice is deemed to have an adverse effect upon the Islamic ideal of fellowship in the community and is therefore prohibited under Sharia law.

Gharar

“Gharar” refers to risk, more precisely defined as “the sale of what is not present” and is a haram (forbidden) practice in Islam, forbidden by Sharia law. Those who abide by the Sharia may not gamble, sell short (in the traditional sense commonly referred to in stock trading), or conclude agreements which might involve uncertainty or chance.

The Mudharabah Arrangement

A “Mudharabah arrangement” is an arrangement or partnership between two parts: the financial role and the management of the funds. The financial role will invest, and the other will control the money.

However, in Sharia law, the Mudarabah Agreement can be restricted. This means the investor will only allow the one who manages the funds to administer them in a certain type of business or location. If it is unrestricted, it indicates that the management of the funds have no constraint.

Musharakah Arrangement

“Musharakah” means “to share”, and it is another type of partnership permitted by the Sharia law where both parties will benefit from earnings in a trade. In this way, the financial part will earn without having to go against the rule against Riba.

Losses must also be shared by those in a Musharakah Arrangement, but the amount of such will depend upon the amount of invested capital. On the other hand, the divided profit is previously set according to the agreement on the contract.

Islamic Prohibitions

According to Sharia law, there are a number of prohibitions applicable to Islamic traders. These reflect Islamic guidelines aimed at ensuring a prosperous and peaceful community. The major prohibitions are outlined below:

Overnight Rollovers

Overnight rollover is the interest that a trader is charged (or sometimes paid) for holding a position overnight. As an Islamic trader you will probably be charged a fixed commission per trade instead to make up for not being charged a commission. It is important to note that in most cases, each currency will have a different interest rate and therefore most likely differential commission rates, so it might be a good idea to look at the applicable fee before opening a position in a particular Forex currency pair or cross.

Interest on Margin Deposits

A margin deposit is an interest based on the cash deposit made with a Forex broker, which a few brokers offer to larger clients. Since margin trading involves a higher risk, the trader must present an initial amount before opening a leveraged position. Interest on margin deposits is not permitted in an Islamic Forex account since it goes against the “no Riba” principle.

Loans

Those who are compliant with Sharia law may not receive or give loans with interest.

Margin Trading

The Riba principle is broken by any trading on margin because margin involves the loan of money at interest given out by a lender who seeks benefit. Even if it has 0% interest, it still arguably may be a loan where the broker seeks benefit (an end profit made by the exchange).

Short Sales

Short sales (in the sense of shorting an equity) go against the Gharar principle because a true short seller is selling something they do not own. The Gharar principle is against “the sale of what is not present”.

Forward Sales

A forward sale is an agreement between two parties to buy or sell an asset at a specified price at a future date. Again, it is contrary to the Gharar principle.

What is Islamic Broker?

Islamic Broker is Broker with Islamic Account designed for traders following Islamic Finance, which is a specific method of financing and banking operations based and compliant with the principles of the Islamic or Sharia laws, while guided by Islamic economics.

Islamic laws applied rules to the trading industry, since by its nature Forex in Islamic perspective might be a forbidden type of investment, and created specialized Islamic Account to enable worldwide traders of the Islamic religion to join international trading of global markets. Read about Islamic Trading via Wikipedia.

  • The primary principle in the Islamic trading process regulation is to avoid any harmful activities, mainly avoid investments interest, restrict high-risk transactions which prohibit margin and derivatives trading. Also, the Islamic Broker Account should not apply swap or rollover commissions, or interest on overnight positions.
  • Every broker that offers an Islamic Account must ensure that all rules are followed and risks are minimized. Recently, the increasing demand brings a wide range of respected Brokers offering Islamic Account, however Islamic worlds and mainly the Middle East still remains highly operated by the offshore and non-regulated companies which we recommend to avoid due to highest risk of scams.

Best Islamic Brokers – Conclusion

To conclude, this guide has taken an in-depth look at the best Islamic brokers on the market, highlighting their fees, features, and trading tools. More brokers than ever now offer an Islamic account that complies with Sharia law – ensuring Muslim traders can obtain the same trading experience whilst abiding by their faith.

For those interested in halal trading, we recommend partnering with Capital.com. Although Capital.com doesn’t yet offer a dedicated Islamic account, it does provide day trading services that are halal if certain conditions are followed. What’s more, Capital.com charges no commissions and allows positions to be opened from as little as $1. 

What are the advantages of an Islamic account? 

Obviously the main attraction of the Islamic account is that it allows those who follow Sharia Law to trade on the markets without breaking with their faith. It also allows traders to stay true to their morals and ethics. Islamic accounts are founded on the principles of fairness and transparency in financial markets. 

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