Forex - IC Market

Investment Questions and Chats General Investment
#1

Salaam O Laikum

I have found your videos on you tube very helpful and MahshAllah your knowledge on the Islamic finance is invaluable. I would really be grateful if you could give me some advice on a matter.

There is a lot of conflicting information on line and the majority is pointing in the direction of forex trading not being islamically permissible

The broker IC markets who give the option of Islamic accounts specify that in their Islamic Accounts Traders of Islamic faith can apply for a Raw Pricing trading account where no interest fees that will be credited or debited.
This is a copy of the T’s and C’s


An additional point to make is that if one learns to trade forex with skilled understanding of the principals and practises absolute risk management that takes away the issue of speculative decision making.
I would be grateful on the shariah opinion of this matter.
Kind Regards
Imran

#2

Assalaamu alaykum,

The issue of interest fees is a secondary concern in Forex, the primary concern is if you are actually buying the currency or simply taking a view on a currency pair without purchasing any currency.

#3

Sorry I don’t understand. In forex trading you are buying and selling curreny pairs with a view of making profit. Is that what you mean?

#4

In Islam we can’t sell, what we don’t possess, and in forex you only have CFD’s (contracts for difference), you don’t actually buy currency, broker is lending you the currency based on CFD. So it is not permissible to trade in forex, because there is no trading as such, it is gambling. You need to look for spot contracts with normal (non-forex) brokers, where you actually buy currency and it is credited to your brokerage account.

1 Like
#5

See @Zokir_Ibragimov explanation for further clarity.

#6

We go into the issues in this video here: https://www.youtube.com/watch?v=dqPEqa33yLc