Is Forex Trading Halal?

Introduction

The Quran generally prohibits Muslims from indulging in any form of business dealings that charge interest. For instance, charging interest in the form of swaps for holding overnight positions in the market could be considered “Haram” or Forbidden for Muslim traders. To suit the permissible standards for conducting business that does not contradict the Quran, a special type of forex trading account known as the “Islamic account” has been created by brokers and made available on their platforms for Muslim traders to trade with. This type of account is completely swap-free and charges no interest for holding positions overnight.

By using this type of account, forex trading could be considered Halal for Muslim traders the Muslim traders. The Halal account is made available to any trader who requests it and is not restricted to Muslim traders only.  Without the Islamic account, it will be difficult for Muslims to partake in Forex trading in Saudi Arabia and other Muslims countries. 

Hence, all brokers operating in these regions always provided Islamic accounts for traders to choose from. 

This work will therefore help you understand the account type permissible for Muslims to trade with – best known as the Forex trading Halal account. You will also learn from this work how to create the Forex trading Halal account and the list of brokers offering Islamic accounts for trading today.

Is Forex trading Halal?

Forex trading could be considered Halal for Islamic traders only when there is no interest charged for trading and holding overnight positions. Islamic practices forbids carrying out businesses with interest. And to suit the standards of Islamic practices, a special type of account called the “Islamic account” has been provided for trading which charges no interest for holding overnight positions in the market. The Islamic account is a Halal account for Muslims who wish to trade forex. It is a swap-free account. 

What is an Islamic forex trading account?

An Islamic forex trading account is a swap-free account that charges no interest for holding overnight positions in the market. It is a special type of account created by brokers to suit Muslim standards for conducting financial activities. 

How to create an Islamic forex trading account 

Creating an Islamic forex trading account is similar to creating other accounts types for trading. The major difference here is the trader will need to select the “Islamic account” as the account type while filling out the registration form. We have therefore provided some useful guides on how to create Islamic accounts below. 

Guide on how to create an Islamic account

• Fill out the registration form on the broker’s website: To create an account with a broker, the trader needs to fill out the registration form provided by the broker on their website. Here, he will be required to supply his full name, email, and contact details. 
• Select the Islamic account as account type: While filling out the registration form,  a column is usually provided for the trader to select the account type he wants to create. He needs to select “Islamic account” as the account type while filling out the registration form on the broker’s website. 
• Upload your identity verification documents: Some brokers still require their traders to upload their Passports and proof of address before their account will be verified. 
• Fund your account and begin trading: This is the last step after the registration process has been completed. Broker’s often provided multiple options for funding to make it easy for traders to do so. 

Best Forex Brokers providing Islamic Accounts for trading 

• FBS
• Vantage
• Forex.com
• Hantec Markets
• IC Markets 
• Capital.com
• eToro 
• AvaTrade 
• FXTM 
• XTB

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