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ISLAMIC ACCOUNT
Islamic accounts are increasingly used and sought after by Muslim traders, because they are created and designed in compliance with the rules of Islamic law. FXOROFXORO offers Islamic Forex Accounts designed for all investors who, for religious reasons, cannot receive or pay interest. This is why they are also referred swap-free accounts.
WHAT IS THE ISLAMIC ACCOUNT AND HOW DOES IT WORK?
The Islamic account is a solution designed by brokers to allow Muslim customers to trade in full compliance with Islamic law. The general trading rules remain identical to normal trading accounts, with the same assets, the same platforms and so on.
To distinguish Islamic accounts from other types of accounts there is a rule that characterizes the dictates of Islamic law in the area of loans and finance, that is, the impediment to carry out activities that are aimed at collecting interest. The reason? Again according to Islamic law this would coincide with usury.
It is clear that this fence imposed by the Islamic faith could prevent billions of traders around the world from making investments. This is the reason why some of the world’s leading brokers have foreseen the creation of the Islamic account.
CHARACTERISTICS OF THE ISLAMIC ACCOUNT
The first and main characteristic of the Islamic account is that it is an interest-free account.
What interests are we referring to?
- the first is the swap, or the commission that is charged by the broker when opening an intraday transaction;
- then there are the Riba, which indicate the interests strictly connected to the trading activity;
- finally, we find the rollover, or overnight, those that accrue when a position is kept open for more than one day.
It is obviously clear that interest and swap are the main pillars in the broker’s earnings, which cannot allow the Islamic trader to operate completely free of charge. The initial spread is the broker’s source of profit, and he absolutely cannot do without it.
This is why in Islamic accounts, which by definition have zero spreads, brokers most often impose a fixed commission per open trading volume.
ADVANTAGES AND RISKS OF THE ISLAMIC ACCOUNT
The Islamic account, like any trading account, has a number of pros and cons that you should carefully analyze before moving on to opening.
On the one hand it is true that the Islamic account is swap-free, but it is equally true that the impossibility of accruing interest can limit the use of interesting tools for trading.
An important clarification to make concerns, again according to Islamic law, the markets and indices where a Muslim can and cannot operate. Specifically, it is right to underline how an Islamic account prevents you from operating and speculating on some listed companies operating in the following sectors:
- Pornography industry
- Sector related to the marketing and production of pork
- Alcohol production sector
- Arms manufacturing sector
- Gambling sector
To understand more about the benefits and risks of an Islamic account, here is a quick review of the main Pros and Cons of this type of account.
Advantages of the Islamic Account
Here are the advantages of the Islamic Account:
- There is no swap interest
- There is no overnight fee
- No interest is expected
- Trading on financial markets without spread
Disadvantages of the Islamic Account
Here are the disadvantages associated with opening an Islamic Account:
- Inability to invest in cryptocurrencies
- Inability to invest in secondary currency pairs
- Inability to take advantage of the leverage tool (unless the broker provides for interest-free leverage).
- Inability to trade in certain sectors (weapons, alcohol, pork, etc)
THE CHARACTERISTICS OF THE ISLAMIC ACCOUNT
| Instrument | Admin Charge per lot (USD) |
|---|---|
| AUDNZD, CADCHF, CADJPY, CHFJPY, EURCAD, EURCHF, EURGBP, EURJPY, EURUSD, GBPCAD, GBPCHF, GBPJPY, GBPUSD, NZDCAD, USDCAD, USDCHF, USDJPY | 10 |
| COFFEE, SUGAR, WHEAT, SOYBEAN, CORN, COCOA, COTTON | 15 |
| AUDCAD, AUDCHF, AUDJPY, AUDUSD, EURAUD, EURNZD, GBPNZD, NZDCHF, NZDJPY, NZDUSD, USDDKK, NGAS | 20 |
| EURNOK, EURPLN, GBPAUD, USDNOK, USDPLN, USDSGD, GOLD, SILVER, PLATINUM, COPP | 30 |
| EURHUF, EURSEK, USDHUF, USDSEK, EURZAR, USDZAR, EURILS, USDILS, USDMXN, USDRUB, OIL, BRENT | 40 |
| POL20, FRA40, GER40, US30, EUR50, UK100, IT40, SPA35, NAS100, JPN225, US2000, US500, SWI20, USDX, AUS200, US STOCKS, EUROPE STOCKS, CANNABISDX, GAMINGDX, AIIDX, MAGSIDX, LATAMIDX | 50 |
| EURTRY, USDTRY | 100 |
HOW TO OPEN AN ISLAMIC ACCOUNT
The FXORO Islamic Account has been designed for all traders who, for reasons related to the Islamic faith, cannot receive or pay swaps. Our Islamic accounts are therefore denominated swap-free and fully comply with the dictates of the Sharia, as they do not provide for the charge of interest or swap on overnight positions and the increase in spread.
People of Muslim faith who decide to open an Islamic account with FXORO have three types of accounts to choose from: Fix, Floating or ECN.
Before opening an Islamic account with FXORO, however, it is good to make some clarifications. First of all that the accepted currency for the Islamic account is only USD. Secondly, if you want to change your account type to Swap-Free, you will not receive swap charges, but you will pay administration costs for open positions.
Here is in detail how to open an Islamic account with FXORO:
.Log in to the Members area and validate your account.
.Apply for an Islamic account.
.FXORO will analyze your request, once your trading account is accepted it will get swap-free status and you will be notified by email.
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