Trading is haram or not?

[tomorton]

Some consider it Haram, some not. My muslims friends trade with Islamic accounts because they are suitable for their needs and beliefs.

I don't know any Muslim traders. Apart from not paying or demanding interest I would like to understand how an Islamic trading account differs from a conventional trading account.

 

[tomorton]

We can make use of the Swap Free trading accounts.

This is just avoidance of interest payments. Apart from this, in what other ways is an Islamic account different to a conventional account?

 

[rickhobbsonce]

Interest is considered Haram, and brokers charge a swap fee, which is a sort of interest. This is against the Islaminc law. But there are Islamic accounts especially designed for traders with religious beliefs.

 

[tomorton]

Interest is considered Haram, and brokers charge a swap fee, which is a sort of interest. This is against the Islaminc law. But there are Islamic accounts especially designed for traders with religious beliefs.

Yes, an Islamic account does not pay swap fees as this is form of interest and obviously it pays no other interest either. But apart from this feature, how else is an Islamic account different to a conventional account?

 

[Rufus_Leakey]

Yes, an Islamic account does not pay swap fees as this is form of interest and obviously it pays no other interest either. But apart from this feature, how else is an Islamic account different to a conventional account?

One example:
https://pepperstone.com/en-ae/swap-free-account/

Swap-free accounts have higher spreads:

The standard spreads:

They also add extra charges for longer-term trades:

Another example:
https://www.dukascopy.com/swiss/english/forex/forex-trading-accounts/swap-free-accounts/
They make sure you pay at least what you would have paid for normal accounts.

In addition to the standard volume commission paid by clients, an additional fee of USD 5 per 1 million USD for currencies and USD 7.5 per 1 million USD for precious metals and CFDs is charged to swap-free accounts;
Dukascopy estimates its financial damage by calculating the difference between the additional commission paid by the client and the swap amount which is not applied to the account due to the swap-free conditions. If the difference is negative (the "Deficit") and the account equity does not fully cover the Deficit Dukascopy will block further trading by closing opened exposures and canceling active pending orders.

The Deficit is calculated once a day at settlement time and is applied by adjusting the minimum Stop Loss Level.
The Deficit amount will be debited from the account if:

• the swap-free rollover policy is terminated;
• a full withdrawal is made on the account;
• the account is to be charged as per maintenance fee policy.

So, it looks like a gimmick that will make swap-free accounts more expensive for traders.

 

[ackleselden]

There is a fee called "swap fee'' in trading which is against people with religious beliefs. It also makes trading haram. But it is not something to worry about. If you're muslim, you can trade with special accounts known as Islaminc accounts.

 

[tomorton]

Swap fees are haram. Private retail forex trading is the issue in the question, not swap fees.

In our trading, we do not buy or sell assets or goods. when we go long EUR/USD, we are not buying euros and we are not selling US dollars. The expressions buy and sell in trading are used because the benefits derived from a rise in the EUR/USD exchange rate are parallel with those that would occur to a person who had sold a lot of US dollars and bought a lot of euros. Buy and sell in trading relate to the effects of the exit of the trade, not the action itself.

Private retail forex trading is speculation. Call it betting if you like. We are betting an exchange rate will rise or fall, and that's how we make a profit.

I still cannot see how this can be halal. If its not halal, a great many Moslem colleagues are being scammed by brokers using a smoke screen of removing swap fees.