Best Islamic trading Broker
You are interested in Forex trading, but you have doubts that prevent you from trading according to Islamic laws? Are you interested in a broker that offers Halal Islamic accounts for trading? Do you want an Islamic account without interest or usurious transactions? Pipso FX has evaluated the best Islamic brokerage firms in the global forex trading. Therefore, if you are looking for an only Forex broker who provides full Islamic trading without any hidden condition.
open an Islamic Account now!
What is an Islamic Forex Account?
What is the meaning of “Forex Halal”? What is the meaning of “Islamic trading account”? Islamic currency trading and Halal forex accounts are those that do not have any usurious interest, and all kinds of their monetary transactions have no “rollover operations”, whatever the length of the time of the transaction is.
How The Forex Market Works:
Trading currencies and minerals in the forex market, generally speaking, happens during the day, i.e., 24-hour. At 5 p.m., EST, the transactions are rolled over for the next day, so there is an interest on the regular accounts the investor should pay for the period. The brokerage firm, then, pays this interest and takes that from the traders’ wallet. This happens only if the transaction is not closed before 5 p.m., EST. Any open contract after that time, would be automatically placed for the next day, which – in turn – is considered “the most problematic issue in the law of Islam”. Because of that issue, forex trading was forbidden. Many people believe that this commission is usurious interest due to the benefit of currency rate involved within the calculation of this commission. Others see it as only a commission that is paid in order to extend the life of the deal or in exchange for the service.
How can you get rid of that usurious interest?
- The investor should ensure that his Forex brokerage, which he deals with, closes all open trades before 5 p.m., Then, reopen them in the next day (in order to prevent the investor from paying that interest); therefore, his trade becomes in consistence with the Islamic Sharia laws.
- The client should neither collect nor pay any usurious interest, and that every purchasing or selling operation should be done immediately with no delays.
- Traders, who do not have the full-contract price, can trade through speculative trading strategy using the leverage method, provided by the broker, to provide the largest speculative money from the capital within the portfolio of the client to prevent them from paying any interest or usurious commission.
Forex brokers who observe the terms and provisions of the Islamic Sharia approach, do they provide trading through Islamic accounts?
During our evaluation of Forex brokerages, one of the things that drew the attention of our staff, in Pipso FX website, was Islamic transactions and accounts. Many forex brokers offer Islamic trading services, and some offered them incorrectly in a way that can trick the traders. Some of the major companies that offer Islamic trading properly, according to the Islamic standards, are: CMStrader, XM, FXCC.
It is widely known that trading currencies are one of the most difficult financial transactions, according to Islamic rules. Some of those rules are that those transactions should be made “in the Council”, according to the Prophet (peace be upon him) narration: “hand-to-hand transaction”. The contemporary scholars have considered registering the money in the bank account as the required condition stated by the Prophet. The most important terms for dealing with currencies are:
• The transactions must occur immediately without any delay.
• The currency pair should be either in the account of the seller or the buyer and they should be registered under his name.
• The price of the transaction should be paid completely as one payment without any delay.
• There should be no usurious interest or transactions within the account or any current transactions. If any, all Islamic terms become void.
The only way to avoid breaking the Islamic laws is one of two things:
First: either the investor trades with as much money as he has,
Second: or he gets interest-free loan from the brokerage firm, as well as not taking any usurious interest on his money.
You should be careful when dealing with brokerage firms and ensure that all terms and conditions are in accordance with the Islamic law, and make sure that they provide all methods of Forex trading in the markets to be free from all suspicion