“O believers, take not doubled and redoubled interest, and fear God so that you may prosper”. This quote from the Quran is the very essence of Islamic finance. Those who are Muslim by religion must abide by the rules of Islamic finance with all due respect. All people who identify themselves as Muslim by religion are expected to follow these rules while engaging in any kind of financial activity. Forex trading is not an exception to the rule. The activities that are permissible for believers of Islam are referred to as ‘halal’. And today we will be decoding the concept of Halal forex trading along with a list of Halal forex brokers, so that you can explore the forex market in accordance with your faith by choosing one of the best Islamic forex brokers for yourself.
How Forex Trading Becomes Haram for Religious Traders?
Many of you may already know how forex trading becomes haram or prohibited activity as per the laws of Islam. But for those who are new to the market, we will explain it for a better understanding. The trading instruments in the forex market are international currency pairs where the price of one currency will be quoted against another. Traders make profits out of favourable exchange rate fluctuations that happen in the pairs they trade with. Quite simple right? But what makes it complex for Muslim traders is the fact that every overnight trade position that is opened in the forex market will be subject to swap or rollover fee, which is a kind of interest that you pay or earn to keep the trade running.
And as per Sharia law, any financial activity that involves the element of interest in any form is not permissible. Hence, the rollover fee or swap that comes with forex trading makes it haram for Muslim traders. But since forex brokers are trying their best to make their platforms inclusive for all types of traders from all over the world, they came up with the idea of halal forex trading. The idea was brought to life by the introduction of swap-free trading accounts for Muslim traders. Traders can freely open overnight positions in these accounts without worrying about interest charges being applied. But the brokers may compensate for this with other charges which is somewhat fine as long as it is not applied as interest or ‘riba’.
Now let’s have a look at the 7 best Islamic forex brokers and their features in detail, so that you can choose the best one for your Islamic trading account in the year 2023.
Fxview
The first place in our list of best brokers for halal forex trading has been secured by Fxview. This leading broker with a growing client base as they meet the requirements of all types of traders including Muslim traders. They are regulated by some top authorities like CySEC which makes them a reliable forex trading platform.
Highlights
- Minimum deposit is $200 for EU users and $50 for global users.
- Pure ECN accounts with tight spreads starting from 0.2 pips.
- Low commission of $1/100k per side.
- Up to 500x leverage.
- Negative balance protection.
- EA trading and hedging are allowed.
- Islamic accounts can be operated on the MT4 platform only.
- No extra charges for trades that get closed within 3 days.
- From 4th day onwards, charges will be applied based on the instrument.
IC Markets
The second spot in our list of brokers with best Islamic trading accounts is secured by IC Markets. This well-known broker is regulated by some reputed authorities like ASIC and CySEC. They offer different account types to meet the requirements of different traders which also include Islamic accounts for Muslim traders.
Highlights
- Provides 3 trading platforms: MT4, MT5 and cTrader.
- ECN pricing model.
- Minimum deposit requirement is $200.
- Raw spread account has spreads starting from 0.2 pips and standard account spreads start from 0.6 pips.
- Standard accounts are commission free and a commission of $3.5/100k per side is charged for raw spread accounts.
- Leverage up to 1000x.
- A flat rate financing charge will be applied to trades on certain instruments when they are kept open for more than a day.
- The rates and holding period are subject to modification based on market conditions.
Fxpro
The third broker on our list of best Islamic forex brokers is secured by Fxpro. This popular broker has multiple regulations from trusted authorities including FCA and CySEC. They cater to the needs of all types of traders around the world including religious traders looking for swap-free accounts.
Highlights
- Provides their own exclusive trading platform along with popular ones like MT4, MT5 and cTrader.
- Can fund your account starting from $100 but recommended initial capital is $1000.
- No dealing desk execution with fixed and floating spreads from 0.9 pips.
- Commission free accounts with marked up spreads and raw spread account with commission of $3.5/100k per side.
- Available leverage varies depending on your jurisdiction.
- Fees will be applied to trades that are kept open for a specified number of days based on the instrument.
- Have to send an email to the back office department for switching to Islamic trading account.
Pepperstone
The fourth best Islamic forex broker in our list is Pepperstone. This trusted broker is regulated by a number of authorities including CySEC and FCA. They are serving many traders around the world by offering different account types including a forex swap free account for religious traders.
Highlights
- Provides 3 trading platforms: MT4, MT5 and cTrader, which can be connected to Tradingview as well.
- Minimum deposit requirement is A$200.
- Spreads on Islamic accounts is from 0 – 1.2 pips.
- No commission charged for Islamic accounts.
- Leverage up to 500x.
- Usage of EAs and hedging are allowed.
- Only traders from specific locations can apply for an Islamic forex trading account.
- No extra charges for overnight positions that are closed within 10 days.
- Admin charges will be deducted from your balance from 11th day onwards based on the instrument.
FXTM
The fifth position in our list of best halal forex brokers is taken by FXTM. It is an established broker regulated by multiple authorities including FSC. They allow their users to sign up for a swap-free account for Islamic trading.
Highlights
- They provide MT4 and MT5 as trading platforms.
- Provide 3 different account types; Micro, advantage and advantage plus.
- Minimum deposit for a micro account is $10 and for $500 for other account types.
- Spreads on advantage accounts start from 0.1 pips and for other 2 account types, spreads start from 1.5 pips.
- Commission is applied only to advantage accounts and it can be $0.4 to $2 based on volume.
- Max leverage for micro accounts is 1000x and for other accounts, it is 2000x.
- A swap-free fee will be charged when you open several positions exceeding the specified swap-free day allowance.
- Exotic pairs are not available for swap-free accounts.
- Only clients from selected regions are eligible for swap-free accounts.
FXCM
The sixth broker in our list for Islamic forex trading accounts is FXCM. This reputed broker is regulated by multiple authorities including ASIC. They are providing interest free Islamic trading accounts for Muslim traders.
Highlights
- Provide MT4, Trading station, Trading view pro, and Capitalise AI as trading platforms.
- Minimum deposit requirement is $50.
- Spreads starting from 0.8 pips and no commission.
- Leverage up to 400x.
- ECN execution.
- Mark up on spreads and commission will be charged based on primary account type and instruments traded.
AvaTrade
The seventh and last one on our list of halal forex brokers is Avatrade. This popular broker is regulated by multiple regulators ASIC.
Highlights
- Provides their own trading platform along with MT4 and MT5.
- Minimum deposit requirement is $100.
- Spreads from 0.9 pips and no commission.
- Have to fund your account before applying for swap-free status.
- Swap will be applied for trades that are kept open for more than 5 days.
- Will have increased spread on forex pairs and certain forex pairs and cryptocurrencies are not available for Islamic accounts.
So that was our list of best Halal forex brokers that you can consider for opening an Islamic trading account. As you can see each of these brokers are vastly different from one another but each of them can be an option for a Muslim trader to engage in Islamic forex trading. And, there are many detail guides on Islamic forex accounts that muslim traders can go through to find about the do’s and don’ts of trading in such an account. We hope that this list will come in handy for people with Islamic beliefs who want to trade currencies, but don’t know if it is permissible or not. Feel free to leave your feedback and let us know your thoughts on the concept of Halal forex trading in the comment section below.
Forex Currency Stock API is able to provide real-time exchange rate data for global currencies. This API comes with multiple endpoints, each serving a different usage state. Endpoint functionality includes getting the latest exchange rate data for all currencies or a specific set of currencies, converting currency from one currency to another, restoring time series data for a currency or multiple currencies, and querying the daily volatility data API.