Valentin Cote
Hello, today I want to explain swap-free trading as well as swap-free brokers that offer such 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 the swapping operations is against Islam according to the majority of Muslims. That’s where the name comes from. In fact, some Islamic forex brokers may ask you to prove your religious beliefs to open an account. However, there are many Islamic Forex brokers who let every client benefit from this method of trading. Here I prepared an infographic for you.
What is swap-free trading? Why do people ask for interest-free accounts? Which Islamic forex brokers offer swap-free accounts? Can non-muslims open Islamic accounts? Sharia-compliant Forex trading… Halal Forex accounts… You can find adequate information on all of these in this blog post.
Islamic Forex trading come into question since the beginning of Forex. People who are sensitive to their religion asked Islamic 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?’.
In Forex trading, Rollover Rate is the net amount of interest return from the current position taken by the Islamic forex brokers. A rollover means the trading operation isn’t settled and the position is extended to another day. We can dive into details by giving an example. Assume that a trader took a long position with 1,000,000 EUR/USD with a rate of 1.15. The daily interest rate of EUR is 0.0054% and the daily interest rate of USD is 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 = – $31.05. Also, we can calculate the cost by dividing it by 1.000.000 and 0.00003105 or 0.3105 pips.
In Foreign Exchange, traders get either paying or earning interests. This is valid for every day of the week. But, since the trading operations are closed at weekend, the interest of these two days should be added to another day. That’s why you pay three days of interest on Wednesdays. This daily interest is called swap.
Swap-free trading can be very tricky. Although you won’t pay any money during the night, the swap-free brokers may charge you hidden fees or/and some limitations to your account. Some Islamic Forex brokers close all the open positions at night and re-open in the morning so that you pay spreads twice. To learn everything about swap-free trading, continue reading!
The number of Islamic Forex brokers with swap-free accounts is enormous. There are countless of them. For example, XM Forex is one of the famous swap-free brokers in the market. However, because of the cautions I made above, you have to be careful. Also for you, it’s probably one of the features you have to consider. So if you want to get a comprehensive idea about Islamic Forex brokers, please click on the ‘read the review’ button. Otherwise, you may be convinced to trade with the broker. In this case, you just need to click the ‘open an account’ button.
- Strong regulation with 5 different regulator include FCA
- Negative Balance Protection
- Tight spreads
- Multiple trading platforms offered
- 50+ awards
- Minimum deposit is 100$
- Regulated by FCA and ASIC
- Tight Spreads
- Trading at Cryptocurrencies
- Deep Liquidity
- Award-winning Customer Service
- No Stock CFDs
- Commodity Trade Pricing
- Regulated by CySec and FCA
- Competetive spreads and fixed spread option
- Account types for Auto&Copy trading systems
- Strong regulations (FCA,, CYSEC)
- Account type variety
- Negative Balance Protection
- Low max order size of 30 standard lots per trade
- Strong regulations (ASIC, CYSEC, IFSC)
- Tight spreads
- 400+ trading instruments
- Bonuses and promotions
- Fast execution speed
- Single-stock CFDs only available on MT5
- Strong regulation
- Low ECN Spreads
- Segeregates client funds
- Supports copy trading platforms
- Not avaliable fixed spreads
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 are 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 the customer service of Islamic forex brokers for details. You have to be sure that they won’t charge you additionally. Otherwise, you may end up in a disadvantageous position.
