Islamic Trading Accounts or SWAP-free Accounts
Islamic accounts are special accounts designed to abide by the Sharia law, so they do not have SWAP. Also known as SWAP-free accounts, these are offered by reputable specialized forex brokers to Muslim clients. They do not have rollover interest or swap on overnight positions because these principles go against Islamic beliefs. Traders who cannot pay or receive swap for religious reasons should sign up for this type of account with an experienced broker, so you can take advantage of the advanced trading technologies and platforms offered by a specialist.
An Islamic trading account lets you avoid haram transactions when trading in foreign exchange. Experienced brokers understand that Islamic trading is a special trading condition where traders are not penalized or charged when trading. Being interest-free, the Islamic trading account tends to have higher spreads, which is typically a point higher than what a regular trading account has. If you are thinking of trading SWAP-free, be sure to work with a leading brokerage company in the CFD and forex markets to get world class services and to gain an edge over other traders using exclusive and high-end instruments.
A reputable forex brokerage company can provide over 500 trading instruments for forex, stocks, CFDs on indices and commodity futures, and precious metals, like gold. All minor, exotic, and major currency pairs are covered, as well as stock CFDs from popular stock exchanges. Having an Islamic trading account with this type of brokerage specialist ensures the best execution of orders on your behalf. This way, you can be sure that you can trade in any size with the tightest fixed spreads.
When you work with the right broker, your Islamic trading account do not have additional charges, and the Islamic status is given to all your accounts, whether they have been opened later or earlier. If you have opened a standard forex account earlier, you may change it to Islamic, but if you have had a SWAP-free account in the first place, then you should stick to it because switching to a regular account would be impossible. A broker may charge or credit SWAP, and it will be credited on your accounts before switching them to Islamic.
In an Islamic trading account, swap is not calculated and the trading positions are automatically closed 14 days after being opened. The transition order for this type of account is to close all the open trading positions and orders on the trading account before a request is sent to you. You should avoid abusing or misusing your Islamic trading account's special conditions, or it may get canceled.
About the Author:
Araik Zohrabyan is the Public Relations Officer at IFC Markets. He provides current and summarized information to enhance business awareness. His valuable and strategic inputs gives a better understanding of IFC Markets, an International Forex and CFD Broker. IFC Markets is involved in the development and application of new effective projects in the field of financial technologies.