Swap-Free Forex Trading | Islamic Accounts

Hello, today I want to explain swap free trading to my beloved Forex enthusiasts. The trading method is also known as Islamic and there is a good reason for calling it this way. The profit of swapping operation is against Islam according to majority of Muslims. That’s where the name comes from. In fact some of brokers may ask you to prove your religious beliefs to open an account. However, there are many brokers who let every client to benefit from this method of trading. Here I prepared an infographic for you.

islamic forex account - swap-free forex accountWhat is swap-free trading? Why do people ask for interest free accounts? Which Forex brokers offer swap free accounts? Can non-muslims open Islamic accountsSharia compliant Forex tradingHalal Forex accounts… You can find adequate information to all of these in this blog post.

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Islamic Forex trading come into question since the beginning of Forex. People who are sensitive with their religion asked Forex brokers for swap free accounts or trading without Rollover interest. In this part of the article, I feel that I need to explain ‘What is Rollover Rate?’.

Rollover Rate

In Forex trading, Rollover Rate is the net amount of interest return from currency position taken by Forex trader. Rollover means the trading operation isn’t settled and the position extended to other day. We can dive into details by giving an example. Assume that a trader took long position with 1,000,000 EUR/USD with the rate of 1.15. The daily interest rate of EUR is 0.0054% and daily interest rate of USD 0.0081%. Thus, the interest of EUR is €54 and the USD cost is $93.15 . If we convert €54 to USD, we get $62.1. So with this position, the trader lost $62.1 – $93.15 = – $31.05 . Also we can calculate the cost by dividing it with 1.000.000 and 0.00003105 or 0.3105 pips.

In Foreign Exchange, traders get either paying or earning interests. This is valid for the everyday of the week. But, since the trading operations are closed at weekend, the interest of these two days should be added to another day. That’s why you pay three days of interest on Wednesdays. This daily interest called swap.

Swap free trading can be very tricky. Although you won’t pay any money during the night, the broker may charge you with hidden fees or/and some limitations to your account. Some brokers close all the open positions at night and re-open at morning, so that you pay spreads twice. To learn everything about swap free trading, continue reading!

Forex Brokers with Swap Free Accounts

The number of brokers with swap free accounts are enormous. There are countless of them. Fore example XM Forex is one of them. However because of the cautions I made above, you have to be careful. Also for you it’s probably one of the feature you have to consider. So if you want to get a comprehensive idea about the broker, please click on ‘read the review’ button. Otherwise, you may be convinced to trade with the broker. In this case, you just need to click ‘open an account’ button.

Brokers with Islamic Accounts

Islamic Clients Only

Note

My Score

Action

FXTM

No, for everyone

-

8.7

XM Forex

Yes

No-Additional Fee

8.7

Pepperstone

Yes

After a trade held for 2 days, Admin Charges applied

8.3

IC Markets

Yes

After a trade held for 1 day, Financing Charge applied

7.9

FxPro

Yes

-

7.6

HotForex

Yes

A Carry Charge applied after 7-day period

7.5

eToro

Yes

A Carry Charge applied after overnight positions of 7-day period

7.4

Dukascopy

Yes

Minimum $1000 account instead of $100 for regular account


No additional commission

7.3

Swissquote

?

In case of abuse, the bank will invoke the right of returning it to regular account

7.3

easyMarkets

Yes

-

7.2

Tickmill

Yes

No Additional Fees

7.1

fbs

FBS

Yes

FBS may charge a fixed fee

7

Conclusion

Foreign exchange operations are one of the most controversial topics in the Jurisprudence of Islam also known as ‘Fiqh’. But if you follow Islam and sensitive about the topic, you can try these accounts. Some of the accounts claim that they are 100% Sharia compliant. But it’s up to you whether you make further questioning or not.

Also i want to say some final words for non-Islamic clients. You should consider that, just like Islamic clients, you won’t earn from swap returns. So you have to research carefully and contact with the customer service of brokers for details. You have to be sure that they won’t charge you additionally. Otherwise, you may end up in a disadvantageous position.

 

 

 

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