Im a crypto trader
I trade with margin (x3,x5…) , i see that swap (daily fees) is haram , but in crypto brookers there is no swap
But there is funding rates "Funding collects / returns in the underlying currency, and periodically pays for long positions and short positions every 8 hours. When the funding rate is positive, long positions will pay for short positions; when the funding rate is negative, short positions will pay for long positions. "
So , is it halal ?
Thanks a lot .
Can you send us a link explaining more and the specific rates you are referring to on an exchange.
Thanks for reply
link : https://www.binance.com/en/support/faq/360033525031
Waiting for your reply
Any answer on this yet? I haven’t started margin trading on Binance until I’m certain on whether it’s halal.
Anything where you are margin trading online, I would just avoid.
Not only is it almost always haram, it is commercially not a good idea as 80% of people lose money.
Margin trading on most conventional platforms is not Shariah compliant.
Allah knows best
Assalam, pls if margin trading is haram in cryptocurrency then pls how do i trade crypto???
What is the reason(s) for the prohibition?
Because some platforms can avoid it
@Mufti_Faraz_Adam pls can u reply to this
From a Shariah perspective, the margin funds are considered as the bet one places to take a view on the market and to open a position. Therefore, it is impermissible and non-Shariah compliant.
Salam Mufti Faraz Adam,
I’m sorry for my english, it’s not my native langage.
I just opened an account on Binance and i wanted to know if i can invest on bitcoin, ethereum and stellar.
I do understand by margin funds that is the mecanism of investing money you don’t possess. Am i right ?
If i buy bitcoin with my own money there is no problem selling and buying on this platform ?
Is it permissible to buy and sell a currency within 2 min ? (Is there a minimum of time that i have to keep a currency i exchanged previously?)
Thank you for your help, may Allah grant you Janaa el Firdaous.
Jazik Allahou khayran.
I would like to share my experience with a decentralized exchange (DYDX) that offers leverage, even though I do not use it (and i dont use margin too ). Recently, I noticed that I had paid and received some money with my long position and decided to investigate further. I discovered that this payment is called the “funding rate.”
To learn more about this, I consulted the exchange’s resources (Understanding funding rate details | dYdX Help Center) and (Perpetual Funding Rate | dYdX Help Center).
As my brother Aymen explained, “Funding collects/returns in the underlying currency and periodically pays for long and short positions every 8 hours. When the funding rate is positive, long positions pay for short positions, and when the funding rate is negative, short positions pay for long positions.” This rate is not fixed and is determined by the amount of shorts and longs in the market. However, the exchange refers to it as an interest rate, even though it is not.
In my opinion, this funding rate is a fee that is part of the contract when I am in a long position, and it is not considered an interest rate (riba).
I would appreciate hearing your thoughts. Thank you, my brother.