Does it matter which broker I choose to invest from?

Assalamu alaikum rahmatullahi wa barakatuh,

Does it matter which broker I choose to invest from, in terms of “halal-ness”? Like, Robinhood, M1 finance, etoro, TD Ameritrade, Fidelity Investments, Charles Schwab,etc.

Jazak Allah khair!!! May Allah reward you all the highest level of paradise!!!

are spread fees halal?

I use eToro as my broker, and the way they profit from me buying stocks is by taking a spread fee. So the way it works is that when I buy my a stock I’ll be slightly in the negative (as a result of them taking the spread fee), but the spread fee depends on the market and its volatility so it’s really hard for me to calculate it, according to their customer support, as it changes pretty much every second. is it permissible for me to buy stocks from eToro even though I don’t know exact price I will pay? (even though its very minuscule).

Wasalam

May Allah bless you,

I do not think this method is shariah compliant. Also there has been doubt cast over whether eToro is truly shariah compliant or not.
@Mufti_Faraz_Adam and @ibrahimkhan might have more information about it.

And Allah knows best!

Please provide me with more information, I am popular investor there and I am managing the money of around 100 people! So, please inform me.

Note that I only buy underlying asset, so I don’t use any CFDs.

Assalamualaikum warahmatullahi wabarakatuh,

Just to inform you, my brother, that to please CAREFULLY check and CONTACT the etoro regarding that do the users REALLY buy the underlying asset or not. Please check this screenshot regarding my question asked for etoro. In other words, the following screenshot is their reply to my question. I asked the question (or they replied to me, i don’t think i know which one) on 31/3/2020. I don’t about the current situation.

It says:
“CFD trading is a method of trading in which an individual engages in a contract with a CFD broker, rather than purchasing the underlying asset directly”

Note: I did not say ANYTHING regarding its halalness. I was just helping with what I can. Also, please DON’T forward this screenshot to anyone else.

Jazak Allah khair!

as its shown, it mentioned that we buy the underlying asset. I think it was as a result of your account that maybe only allowed for CFDs. But I’ll make sure to double-check with them.

@IbrahimQureshi

oh ok, I am really sorry then. Jazak Allah khair for helping me though!!!

If you are buying the underlying asset then etoro should be fine for that. I understand in some countries they only offer CFDs.

As Etoro charges a spread fee above the market rate - is this acceptable?

Or could this be classed as inflated appreciation?

On certain crypto etoro charge upto 5% on the spot market rate - is huge fees like this ok?

(Some would ask why still transact with etoro with such high fees? Well… their platform is easy to use for a newcomer).

This is not a paid promo.

Assalaamu alaykum,

In principle, they can charge an inflated fee. You have the option to not proceed if it does not match your requirements.

Assalamu alaikum rahmatullahi wa barakatuh,

Dear muhab_hasan,
I think I might have a good news for you and for others. I’ll try my best to do what I can, since the respected muftis will be checking this message inshAllah. And since helping others are useful to me and to them. :slight_smile:

I replied to a message to etoro similar to what is regarding the Islamic accounts in etoro which follow the Islamic guidelines. And I got a reply from them! :slight_smile: (GMAIL)

And also, I am not saying that that Islamic account is halal or Haram. I am leaving that to the respected muftis. May Allah reward us all the highest level of paradise.