Is Forex trading "Halal" or "Haram"?
The affair of the stock market in Islam rose with a part of the Muslim society and the growth of online trading. We'll review different aspects and causes to explain whether trading is halal or haram.
A thorough analysis of the Forex market and particularly the activities, and data on how to stay halal and what instruments can be traded abiding the Sharia law.
Muslim investors often ask, in matters of Forex, futures, stocks, commodities, and currencies, is spending in the stock market halal or haram?
By definition, Forex trading can be identified as halal and not against the basic principles of Islamic finance. It is more comfortable and the possibility of fast earnings is attracting more and more traders each day. At first sight, it looks like a halal investment opportunity, because it's just about purchasing and trading funds. But, there are things to consider.
Islamic Finance: Forex Riba
On the side of the ban on paying or taking an interest, things are becoming a bit difficult. When a client holds open positions after the expiration time, the broker charges a swap fee, which is similar to an interest rate.
This rate is attached to the feature that the broker provides you an unknown loan through leverage. And like any loan, it is normal for it to be advantageous for the lender, which in this case turns out to be the broker. That's why a regular trading account is a haram since its method requires interest payments. And an Islamic trading account is halal, eliminating the adjustment of these swap interests.
In fact, in Islam, it is allowed to loan money from someone to invest for income and then pay this interest-free loan to the lender.
To continue on success, the broker imposes fees and commissions, which a few may consider an unknown interest, but many researchers suggest this method to support trading. So, an Islamic trading account without swaps exceeds the riba barrier.
Read more at Islamic Forex Trading Brokers for information.