Rollover Swap Free Accounts

Forex trading has always charmed people, because of its high-profit margin. Traders from all parts of the world, be they belong to any country, religion or caste have always shown their interest in forex trading. Like every other field, there are some peculiarities in Forex trading with respect to traders having strong religious beliefs that need to be taken into account. For example, Muslims are not allowed to take interest as per the Islamic Shariah Law. So rollover/swap payments on positions held overnight can be a problem.

To address the issue and considering the rights of all stakeholders, brokers started offering Islamic Accounts or accounts bearing no interest.  However, some additional fee is applicable. The fee may vary from broker to broker. In other words, changing the title of interest with fee still doesn’t resolve the issue, because a fee is charged in order to cover the interest and this is what forbidden in the Shariah Law. This could be considered a swap-free account in disguise. There are some brokers offering extra perks for swap-free accounts. Muslims clients may donate a share of any profit to charity.

If positions are held overnight, a Forex swap rate paid or earned is known as overnight or rollover interest. Depending on the currency pair being traded and the interest rate of the respective individual currency, a swap fee is charged. Interest is always received or paid depending on the interest rates of both the currencies being traded in a currency pair.

Risk management analysis and market conditions also play key rule while trading currency pairs on the basis of swap charges. Types of account and available tools keep on changing and varies from broker to broker. Technology has simplified forex trading even more. Traders can now access the international Forex market from any part of the world via internet. Investing in international Forex market gives traders more freedom to invest their hard-earned money in the forex market with a suitable broker with an increased potential of making a profit, following their religious practice.

Forex Trading in view of Islam

Forex trading and its prohibition in Islam is a very contentious subject. People have different views regarding different aspects of Forex trading such as options, futures, spot or margin trading. To some schools of thought, Forex Trading complies with the Shariah Law, as far as the trading is spot based and no extra charges are involved, be it of any kind such as interest, an extra fee, commission or surcharge. The main bone of contention seems to lie with margin trading (as almost the entire Forex is based on margin trading), and hedging (often compared to futures trading). Although there has been a long debate with respect to the rules and regulations allowed by the Shariah Law, a well-grounded article has been written by Malaysian resident Dr. Mohammed Obaidullah and is often reviewed by experts. The writer tried to address almost all aspects of Forex trading and provided references to sources of Fundamental Islamic Beliefs pertaining to Forex Trading.  The article enlightens all aspects of Forex trading and gives references to the fundamental Islamic sources. Dr. Mohammed Obaidullah gives a very good argument for Forex trading to be legal for Muslims only if riba (interest) is not involved.

What Are the Options For a trader that follows the Shariah Law?

There are many Forex brokers offering Islamic, No Riba, Shariah-Friendly, or Swap-Free accounts. But before opening an account with any of them, you must be very clear that forex trading in Islam is allowed or not? Because it is not necessary that you or other people following Shariah Law may agree with Dr. Muhammad Obaidullah. Once you are clear with your reservation and have come to a conclusion that it is allowed. You will then need to find a broker that matches your needs. You must consider certain important factors before choosing a broker. The factors may include regulation of the broker, types of Islamic account being offered, applicable fee and other restrictions. Since there are many brokers offering Islamic trading account but they may involve surplus charges which again are a conflicting part as per the Shariah Law. Similarly, there are few brokers who truly offer Islamic accounts considering and incorporating all the applicable rules and regulations of Shariah Law.

The restrictions are placed after some obnoxious traders tried to benefit by using a combination of Islamic and regular accounts and manipulating the pricing differences employed by the brokers in hand. Brokers nowadays, tend to keep a good check on this kind of activity and usually shut down accounts with any unusual activity.

Why Forex Trading Is So Popular

  • The flexibility of market hours in the forex market makes it popular
  • Best risk/reward opportunities are offered in Forex Investments.
  • People find a lot of potential for trading since the Forex market has a huge trading volume, making it the most liquid market on earth.
  • It’s very hard to manipulate the forex market
  • Initial costs are minimum in terms of money and time
  • Generous leverage allow traders to take advantage of the minor move in the rates of exchange
  • A source of stable income through rollovers/swaps unless it is against religious beliefs of course
  • Novice traders are offered demo accounts to practice their own strategies without risking their real money. Charts, daily and weekly analysis and news updates are also available to assist traders in decision making.

However, you must be aware that using leverage as part of your trading strategy means you are risking yourself of losing everything, or at the very least a large portion. Therefore you may see a disclaimer note appearing on almost every broker’s website.

Brokers Offering Rollover Swap Free Accounts

Given below is a list of brokers offering rollover swap free account;

24Option: 24Option is an online leading brokerage offering to trade in Forex, stock and CFD. The broker offers some of the highest returns of up to 88% in the industry. The website is available in multiple languages. The broker offers a leverage of 1:400. The minimum deposit amount required to open an account is $250. Besides offering EAs, the broker also gives it clients, a facility of hedging. The company is regulated by Cyprus Securities and Exchange Commission (CySEC). Islamic swap free accounts are also offered at 24Option.

Trade.com: Trade.com is one of the premier brokers offering online trading in currencies and CFDs. The broker offers state-of-art MT4 and Sirix platforms. Multilingual Customer support is available 24/5 at the company’s official website. The broker is regulated by Cyprus Securities and Exchange Commission (Cyprus). A minimum deposit of $100 is required to open an account. The broker also offers Expert Advisors. Traders can also avail hedging facility at Trade.com. Considering the needs of all stakeholders, the broker also offers rollover swap free accounts for Muslim traders. Traders having large balances can get a maximum benefit using hedging because it helps traders mitigating the risk of incurring major losses.

Avatrade: In 2006, Avatrade, was founded. It was a combined effort of financial professionals having an aim of perfecting the online experience for retail traders. The broker offers trader, reliable environment, with complete security of funds. AVA Trade EU Ltd is based in Ireland and is regulated by the Central Bank of Ireland. Considering the needs of all stakeholders, the broker also offers an Islamic Accounts with rollover swap free accounts. The broker also offers hedging facility.

Hot Forex: Hot Forex is an online brokerage offering to trade in forex and commodities. The broker is based in Ebene House, 3rd Floor, 33, Cybercity, Ebene, Mauritius. The company is regulated by Financial Services Commission (Mauritius).Hedging facility is also available at Hot Forex. Minimum deposit required to open an account is just $5 at Hot Forex. Swap free accounts for Muslims traders are also available.

XM: XM is a brand name of Trading Point Holdings Ltd which wholly owns Trading Point of Financial Instruments UK Ltd (XM UK). The broker is fully authorized and regulated by the Financial Conduct Authority (FCA). The broker offers online trading in stocks, metal, currencies, commodities and CFDs. Currently, the company has clients from all across the globe. Services like expert advisors and hedging are also available at XM. The broker also offers rollover swap free Islamic accounts for Muslim traders.

XTB: XTB UK is an FCA regulated brokerage company, founded in 2009. The broker offers to trade in currencies, stocks, indices, commodities and CFDs. Multilingual customer support is offered by the broker. The website of the broker can be accessed in multiple languages. Along with the MetaTrader4, the broker also offers EAs facility to traders. Rollover swap free accounts following Shariah Law are available for Muslim traders. To avoid big losses, traders are allowed to hedge their trading. The broker offers three types of accounts including, Standard, Basic and Pro.

LCG: London Capital Group Holdings (plc) is a company registered in England and Wales with registered number: 05497744. The broker offers to trade in shares, forex, indices and CFDs. The company is fully authorized and regulated by Financial Conduct Authority (FCA). Islamic accounts bearing no interest and swap free accounts are also offered. The broker offers services like EAs and hedging to its traders.

Plus500: Plus500 is a UK based brokerage company offering online trading in CFDs. The broker is rapidly expanding in Europe and Asia offering a portfolio of more than 1000 instruments with clients from almost all parts of the world. The broker offers Expert Advisors automated trading facility to its traders. Beside all other services, hedging is also offered by the broker. Plus500 pays special attention to the needs of all stakeholders, therefore offers Islamic swap free accounts for traders from Muslim community.

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