Hey guys!
I was wondering since I’ve come across a broker that allows for forex spot trading where currencies are bought and sold and the leverage is 30x (max as real currencies are being exchanged not like the majority of CFD brokers).
Its an investment bank but you’d have to close the trades before midnight to avoid swap charges. What are your opinion on this? It definitely seems to eliminate the CFD issue regarding fx. Their name is Saxo and they offer both CFD and spot but we wouldnt trade the CFD’s
Salam Mufti,
Correct, from what I’ve read and understood with their spot forex, you gain ownership since currencies are traded and not derivatives thus the leverage is max 1:30 on the spot forex compared to most brokers out there that only offer CFD and a leverage up to 1:500. The leverage is much smaller here with spot fx because actual currencies are being traded and not derivatives (CFD).
Does this make it halal even if there is a 1:30 leverage? They unfortuneately do not offer any islamic accounts so one would have to close any open positions before midnight to avoid any interest / rollover swaps.
Brother,
how are you sure that you gain the ownership of the currency? can you withdraw your traded currency? for example, if you buy JPY with USD, can you withdraw the JPY?
From what I read from Saxo website, they automatically roll it over so it’s not designed to be withdrawn and only for trading.
anyway, I found another broker which is also non-CFD and you can also withdraw your other currencies as a result of a trade. go check Interactive Brokers. I haven’t yet invested in there because I’m also still learning about the broker. Here is what I found so far about them: Is it halal? Real spot forex and commodity on Interactive Brokers (IBKR)?
If you find anything else regarding shariah-compliance, please let me know. I also still wants others, especially muftis, to comment on this before I jump in.
As Salam aleykum. I am also waiting. I have been trading for a long time in cfd but have quitted since it’s haram. If there is an halal alternative which does not fall under the purview of riba please clarify which one and why.
Spot forex broker,check trustcapital and fxopen which claim to be spot fx brokers and there are few more just google and u will find many,however the issue that u cant withdraw the currency thats a different issue.cfd = no asset.traditional cfd has no asset which makes it betting.now here u have asset but u cant withdraw it so u are making someone owner ( contract of agent).now we need to see if that contract is valid where the agent does not let u withdraw the currency u are buying but he will convert it for u automatically if u withdraw.thats a different issue then cfd.i believe its a disputed issue but majority of the scholars ( from classical scholars condition of agency contract ) would allow it since generally there’s nothing that invalidates it directly as long as both of u are agreed and real currency is involved.But i would say here the main issue is leverage which is loan and the loan that u cant use outside of that specific exchange or broker or whatever u wanna call it.Which is problematic.Most classical scholars are strictly against this type of loan so this is an issue.but we have a fatwa from islamweb that said its ok as long as u are being charged what u normally would if u had that much money ( aka no extra benefit is being taken due to loan ) if i am correct they took this view from hanbali fiqh which gives some concession with letter of credits and other things which are similar to loan.anyhow.this is better to be avoided imo because i have read statements of scholars that its prohibited by consensus to involve a conditional loan like sale + loan ( here its service + loan ) contract.maybe sheikh can clarify it further but thats as far as my knowledge goes.unfortunately most of the time mufti do not update people on this issue.despite financial market being a pivot point of making money.rest if u really wanna be careful u can go for ftmo prop firm i believe since its basically u are giving them good performance and they are paying u ( funds are simulated thats why not real account) but if they are copying on cfd account its problematic.Hence we do have issues with almost everything,unless u go with a spot fx broker and trade only ur real money.which wont really make u sufficient gains unless u have 10-50k$ approximately.
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