I researched a broker called fp markets very deeply and talked to them, and they gave me the following answer:
About Halal Forex
Trading - Halal Trading
with Islamic Forex
Islamic finance is guided by four basic principles:
1 | Prohibition of gambling
According to Islam, gambling is prohibited but trading forex and other financial instruments can be considered an educated game of chance which involves the buying and selling of assets based on forex market analysis and using a variety of concepts and trading strategies.
2 | Prohibition of payment and
receipt of any interest rate (Riba)
Usually, when a trader holds open positions at the close of a trading session, FP Markets charges a swap commission linked to an interest rate which is in turn related to the fact that traders receive an indirect loan through leverage. This leverage usually results in profit for the forex broker and therefore why a standard trading account is classified as haram given it includes interest payment whereas an Islamic trading account would be halal as it does not feature payment of these swap interest rates and therefore satisfies the riba threshold.
3 | Risk and benefits distribution
One of the principal concerns about trading is the element of shared risk. Interest ensures a reward for the lender and the borrower is the one who incurs the risk. Excessive or a high level of risk (gharar) is prohibited in the same way that excessive gambling is. Financial activity must also be seen to promote social and economic activity and justice as well as happiness. With an Islamic trading account, all interest charges are waived.
4 | Immediate Exchange or “Hand in Hand”
Now that interest rates not being applicable, the next item to consider is that trading is only permitted if it is “hand in hand”. In times gone by this meant face-to-face but in the modern world and with the advent of online trading and e-commerce, which involves an almost instantaneous transaction between broker and trader executed in seconds, is considered halal under Shariah and is therefore permissable.
and they told me they didn’t charge any commission or interest on leverage
and in short-selling, they said, a person can be allowed to sell the debt they receive on the condition that they pay back the debt when they have consent, and so it is halal.
what is your opinion ?
is it forbidden for me to trade here ?