Top Brokers that offer you a Forex Islamic Account

Is forex halal or haraam? Amna Anwaar Tuesday November 07, Why is this x-ray look into the industry important from a Shariah perspective? Islamically, you are not allowed such a contract where what is actually happening is you have two contracts in one. Everyone is trading on margin and nets out at the end.

Islamic forex trading will increasingly be in demand. Before we understand Islamic forex trading we need to acquaint ourselves, albeit briefly, with Islamic finance. Islamic finance. The theory and practice of finance according to Islamic principles is called Islamic finance.

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Gharar is generally prohibited under Islam, which explicitly forbids trades that are considered to have excessive risk due to uncertainty.

Designed to support long term — reliable trading. The result has been what is referred to as an Islamic, No-Riba, or Shariah forex account. The broker handles the delicate issue of covering his interest related costs by modifying the spreads offered on these accounts to provide the margin he needs.

There may also be additional fees or restrictions placed on these accounts to prevent abuse. As a result, typical overnight interest-swap fees, other interest type charges, or commissions that appear like interest are not present. As traders know, they never have to worry about taking possession of foreign currency. They only speculate on a position and then on its possible direction going forward. The reason no real currency ever changes hands, as it typically would after a 24 to hour cycle, is that a forex broker actually closes all accounts at midnight, and then quickly re-opens them.

These fees are waived on Islamic accounts, but there may be a restriction on how many nights the open position may exist. Once again, religious issues may dictate a different approach, but you can be assured that the broker will recover his costs through some mechanism. All forex trading involves speculating in a volatile market where returns and outcomes are highly suspect. What do I mean when I say Islamic Forex broker? To understand the meaning of an Islamic Forex account, you need to know some basic laws of Islam, also known as Sharia law.

Among many other laws, one of the most fundamental laws when it comes to doing business with Muslims is the prohibition for a Muslim to take interest of any kind. The Islamic religion believes that anything given or taken should be free of interest, which would indicate that the reasons behind the transaction were not pure.

What this means when it comes to an Islamic Forex account is that rollover fees, for example, are strictly prohibited. What are rollover fees? Forex trades, in theory, are supposed to be closed at the end of every trading day. If a trader leaves his positions open overnight, they need to pay rollover fees, which are interest payments that are generated when a position is left open overnight.

Based on Sharia law, this type of payment is forbidden, and therefore Islamic Forex accounts are free of rollover fees. Log into your account. Register for an account. Top Brokers that offer you a Forex Islamic Account. Benefits of an Islamic broker. Islamic Forex brokers will provide interest-free leverage. If a person sells Libyan currency for American or Egyptian or whatever currency hand to hand, there is nothing wrong with that, such as if he buys dollars for Libyan currency hand to hand, exchanging it in one sitting, or he buys Egyptian or English currency etc for the Libyan or whatever currency hand to hand, there is nothing wrong with that.

But if there is a delay, then it is not permissible, and if the exchange is not done in the same sitting, it is not permissible, because in that case it is regarded as a kind of riba-based transaction. So the exchange must take place in the same sitting, hand to hand, if the currencies are different. But if they are of the same kind, two conditions must be met: The ruling on currency is as mentioned above; if they are different then it is permissible for the amounts exchanged to be different, so long as the exchange takes place in the same sitting.

If they are of the same kind, such as dollars for dollars, or dinars for dinars, then the exchange must take place in the same sitting and they should be of the same amount. And Allaah is the source of strength. By continuing to browse this site you are accepting to our use of cookies and that information provided is not warranted. Join the conversation at IslamicFinance and Sukuk 03 Jan Islamic Development Bank 15th March Sharjah 8th March

Why is Gharar so important?

Islamic Forex Trading. Islamic finance is the practice of finance according to the principles of Islam. Similarly, Islamic Forex trading complies with Islamic principles. Two striking features of Islamic finance are: It proposes a risk-sharing philosophy wherein the lender must share in the borrower’s risk. Forex trading is, in the simplest of terms, currency trading. It is a globally decentralized market where businesses, investors, banks, governments and traders come to exchange currencies. Being the largest and the most liquid market in today’s world, forex trading has reached stupendous levels of popularity, resulting in an average daily turnover exceeding approximately $5 trillion. I would like to know about investment in currency (FOREX Market). Like now a days, its very common that people invest in Euro to earn profits. One broker keeps on calling me to invest USD in Euro. Is trade in currency halal? Praise be to Allaah. Dealing in currencies is permissible so long as the.