Swap Free Islamic Forex Brokers

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Company
Rating
Min. position (lot)
Min. account ($) Payments
Max. leverage
Regula-tion
Bonus
1
XM
950
0.0001
5$ MasterCard NETELLER Skrill VISA ...
1:888
TRADING PLATFORMS

МТ4 iPhone, МТ4 Android , МТ4 Windows Mobile, WebTrader, MetaTrader 4 (MT4), MetaTrader 5 (MT5)

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Trading accounts

Demo accounts (with a time limit), Standard Accounts, Swap free accounts, Micro accounts

Regulators

ASIC (Australia) license №443670 IFSC (Belize) license №000261/158 CySEC (Cyprus) license №120/10

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2
940
0.01
100 $ VISA MasterCard Webmoney Skrill ...
1:400
TRADING PLATFORMS

Metatrader 4/5, AvaTradeGo, AvaOptions

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Trading accounts

Demo accounts (with a time limit), Standard Accounts, Segregated accounts

Regulators

ASIC (Australia) license №No.406684, CBI (Ireland) license №No.C53877, FSA (Japan) license №No.1662, FFAJ (Japan) license №No.1574, ISA (Israel) license №514666577, FSCA (South Africa) №45984, B.V.I. FSC № SIBA/L/13/1049

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3
901
0.01
10 USD / 10 EUR NETELLER Webmoney Qiwi Skrill ...
1:2000
TRADING PLATFORMS

MetaTrader 4, MetaTrader 5, Ctrader, R trader, Webtrader

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Trading accounts

Unlimited Demo Accounts, Standard Accounts, ECN accounts, STP accounts, Cent accounts, Swap free accounts, VIP accounts, Micro accounts, Segregated accounts

Regulators

RoboForex Ltd has a special brokerage license IFSC Belize "Trading in financial and commodity-based derivative instruments and other securities" under the number 000138/210.

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4
835
0.01
0 Qiwi Webmoney MasterCard NETELLER ...
1:3000
TRADING PLATFORMS

MetaTrader 4, MetaTrader 5, Meta Trader 4 Mobile, MetaTrader 5 Mobile, MetaTrader 4 MultiTerminal

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Trading accounts

Unlimited Demo Accounts, Standard Accounts, ECN accounts, Cent accounts, VIP accounts

Regulators

IFSC (Belize) license №IFSC/60/301/TS/17 NAFD (Russia) FSA (Saint Vincent and the Grenadines) license №20389 IBC 2012 AFD (Russia)

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5
780
0.01
$100/€100/₽5000 MasterCard NETELLER Qiwi Skrill ...
1:1000
TRADING PLATFORMS

MetaTrader 4, MetaTrader 5, MetaTrader Mobile, Web-terminal

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Trading accounts

Unlimited Demo accounts, Demo accounts (with time limit), Standard accounts, ECN accounts, Free swap accounts

Regulators

FC (Hong Kong), FCA (UK)

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6
701
0.0001
1$ MasterCard NETELLER Qiwi Skrill ...
1:1000
TRADING PLATFORMS

MetaTrader 4, MetaTrader 5, Meta Trader 4 Mobile, MetaTrader 5 Mobile, MetaTrader 4 MultiTerminal, Web Tarder, TickTrader

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Trading accounts

Unlimited Demo Accounts, Standard Accounts, Cent accounts, Swap free accounts, Segregated accounts

Regulators

BVI FSC, License Number SIBA/L/14/1082, FSC Saint Vincent, Reg. Number IBC22945, Saint Vincent, IBC24321

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7
635
0.0001
0$ NETELLER Skrill Webmoney VISA ...
1:1000
TRADING PLATFORMS

MetaTrader 4, Meta Trader 4 Mobile, Forex4you Webtraer, Forex4you Desktop

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Regulators

FSC (British Virgin Islands) license №SIBA/L/12/1027

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8
631
0.01
0$ MasterCard NETELLER Skrill VISA ...
1:2000
TRADING PLATFORMS

MetaTrader 4, MetaTrader 5, Meta Trader 4 Mobile, MetaTrader 5 Mobile

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Trading accounts

Unlimited Demo Accounts, Standard Accounts, ECN accounts, Swap free accounts, VIP accounts

Regulators

Services Authority of Saint Vincent and the Grenadines registered number 20623 IBC 2012

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9
580
0.01
0$ MasterCard NETELLER Skrill VISA ...
1:1000
TRADING PLATFORMS

MetaTrader 4, MetaTrader 5, cTrader

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Trading accounts

Demo accounts (with a time limit), Standard Accounts, ECN accounts, STP accounts, Cent accounts, Swap free accounts, Segregated accounts

Regulators

Financial Services Commission (FSC) BVI, license registration number: SIBA/L/13/1063

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10
560
0.01
$100 MasterCard NETELLER Skrill VISA ...
1:200
TRADING PLATFORMS

MetaTrader 4, MetaTrader 5, MetaTrader 4 mobile, MetaTrader 5 mobile, WebTrader

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Trading accounts

Demo accounts (with a time limit), Standard Accounts, Swap free accounts, VIP accounts, Segregated accounts

Regulators

FCA - 186171; CYSEC - № 259/14; CIMA - 1442313. DFCA - F000048; Saint Vincent and the Grenadines - 25228 (IBC 2018)

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11
400
0.01
$/€/£ 10 / ₦2 000 MasterCard NETELLER Qiwi Skrill ...
1:1000
TRADING PLATFORMS

МТ4 iPhone, МТ4 Android, МТ4 Windows Mobile, WebTrader, MetaTrader 4 (MT4), MetaTrader 5 (MT5), МТ5 iPhone, МТ5 Android, МТ5 Windows Mobile

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Trading accounts

Unlimited Demo accounts, Standard accounts, ECN accounts, Cent accounts, Free swap accounts, Micro accounts

Regulators

CySec - 185/12, FSCA - FSP: 46614, FCA - 600475

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12
376
0.01
1$ MasterCard Perfect Money VISA Webmoney ...
1:500
TRADING PLATFORMS

МТ4 iPhone, МТ4 Android, МТ4 Windows Mobile, MetaTrader 4 (MT4), МТ5 iPhone, МТ5 Android, МТ5 Windows Mobile, MetaTrader 5 (MT5)

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Trading accounts

Unlimited Demo Accounts, ECN accounts, STP accounts, Micro accounts

Regulators

The Financial Commission

Open account
13
374
0.01
Bitcoin MasterCard NETELLER Skrill ...
1:unlimited
TRADING PLATFORMS

MetaTrader 4, MetaTrader 5

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Trading accounts

Demo accounts (with a time limit), Standard Accounts, ECN accounts, Cent accounts, Swap free accounts, Micro accounts, Segregated accounts

Regulators

FSA - SD025, CBCS - 0003LSI, FSC - SIBA/L/20/1133, FSC - GB20025294, FSCA - 51024, CySEC - 178/12, FCA - 730729

Open account
14
360
0.01
$200 MasterCard NETELLER Skrill VISA ...
1:500
TRADING PLATFORMS

MetaTrader 4

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Trading accounts

Demo accounts (with time limit), Standard accounts, STP accounts, Free swap accounts, VIP accounts

Regulators

FSC, license no. C116016172

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15
355
0.01
100 $ Skrill MasterCard VISA Банковский перевод ...
1:500
TRADING PLATFORMS

MetaTrader 4

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Trading accounts

Unlimited Demo Accounts, Standard Accounts, VIP accounts

Regulators

FCA - №717270, SIBA - №SD008, CySEC - 278/15, Labuan FSA - MB/18/0028

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16
350
0.01
50$ MasterCard VISA Банковский перевод Perfect Money ...
1:500
TRADING PLATFORMS

MetaTrader 4, MetaTrader 5

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Trading accounts

Unlimited Demo Accounts, Demo accounts (with a time limit), Standard Accounts, ECN accounts, Cent accounts, Swap free accounts

Regulators

CySEC

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Forex trading is very popular. Presently the daily forex trading volume is more than $4 trillion. Muslims comprise more than 25% of the world’s population and Islam is the second-largest religion. Yet, Muslims are effectively shut out of most forex markets because certain features of forex trading are forbidden by Sharia law. Now there are Islamic forex brokers who offer accounts that comply with Sharia law.

Why are Swaps forbidden by Sharia law?

Sharia law forbids the charging or earning of interest. Swap is the interest earned or paid where a forex position is held open overnight or longer. The swap (interest) fee is negative (paid by the trader) or positive (earned by the trader), depending on the difference in the central bank interest rates of the countries whose currencies are being traded.

Forex trades are multi-national transactions involving a pair of currencies. He has to effectively buy or borrow the currencies to facilitate his trade. The currency pair consists of a “base” currency and a “variable” currency.

For example, suppose a trader wants to trade a EUR/USD position and buy Euros (EUR) and use US Dollars (USD) to pay for them. EUR is the “base” currency and USD is the “variable” currency. The trade is expressed as “EUR/USD”.

Swap fees are relevant only where the trader rolls over (keeps open) his position to another day, and only where a forex trade is leveraged. That’s because the broker is loaning to the trader (carrying) a portion of his investment for more than a day.

In a swap-free trade, the buy and sell theoretically happen at the same time, so there is no carrying cost. A trader who does not hold over their position overnight or the trader who does not leverage their trade need not be concerned with swaps.

However, a customary forex trader can hold his position open (“rollover” or “carry”) overnight or longer. The rollover period most often begins at 5 pm in the broker’s time zone. While a trader holds open or rolls over the position, the currencies cannot be traded by someone else. Somebody has to pay for the use of the currency. That is tantamount to interest.

The “carrying” cost of a rollover is a factor of the difference between the respective central bank interest rates applicable to the pair of currencies traded. A positive rollover occurs when a trader buys a currency that has a higher central bank rate than the currency he is selling. A negative rollover occurs when a trader sells a currency that has a lower central bank interest rate than the currency he is buying.

Take our EUR/USD example. Say the central bank rate in the European region is 4.25% Assume it is 2.25% in the US. Whether the trader is selling or buying somebody has to pay the piper for the bank rate difference.

If a trader is selling, say 1,000 euros, he is borrowing those euros at 4.25% interest and he is buying US dollars that earn interest at 2.25%. He is losing (costing himself) 2% interest (cost of the carry). That cost is debited to his forex account. That’s the negative swap.

Where the exchange is reversed in a positive swap he is buying euros and will enjoy a profit because he is incurring 2.25% interest on the purchase of USD and earning 4.25% interest on the euros. The difference is credited to his forex account.

Islamic Swap-Free Accounts

A simple swap-free account does not permit rollovers and does not permit margin trading. Forex trading without the involvement of swaps is permitted under Shariah law. But most of the real advantages of forex trading involve swaps.

Some brokers accommodate Muslim traders with substitutes for swap fees. For example, increasing the spread on Islamic accounts or charging daily administration fees. These devices sometimes look like a cost of carrying an account (i.e. interest). To paraphrase Shakespeare, “A rose by any other name” is still a rose. If the substitute broker fee is calculated including a factor of the time a position is held open, it is tantamount to interest.

Some arrangements do not look like substitutes for interest. Some brokers do not offer certain forex pairs with an Islamic account. Also, a broker might widen the spread on Islamic accounts. A broker might also charge a fixed commission that is not dependent on the period of forbearance.

In some cases, Islamic brokers offer a form of partnership. There is an age-old distinction between advancing funds as a debt investment and making an equity investment. The principal difference is two-fold: (i) the obligation to pay it back and (ii) risk/reward to the investor.

A debt requires the debtor to pay it back and the lender has no upside. The lender’s sole compensation is interest, that is, the cost of forbearance (i.e. compensation for the use of money).

By comparison, an equity interest has no defined payback. Instead, the lender/broker shares in both the downside and the upside. He bears his equity share of losses and shares his equity share of gains and profits.

Islam forex brokers often effectively form an equity partnership (“Mudharabah”) with Islamic forex traders. The broker’s compensation for forbearance is a profit share that is not forbidden by Sharia law.

Summary

There are many reliable online reviews and lists of reliable, regulated Islamic brokers and other brokers who offer so-called swap-free accounts. Traders should scrutinize those brokers the same as any forex broker.

Qualification under Sharia law necessarily requires a personal judgment of the trader. There is no specific Islamic seal of approval or licensing by Islamic authorities. Ultimately, an Islamic investor must exercise personal judgment as to whether a forex trade is Sharia-compliant.

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