Salamu Alaykum my question today would be on Binance margin trading in shaa Allah.
In the Binance website under the margin trading account states: “Trade assets using funds provided by a third party with a Margin Account. Transfer funds to your Margin Account to start trading!”.
And when you search “How does margin trading work on Binance,” it says the same thing which is: " Margin trading is a method of trading assets using funds provided by a third party. When compared to regular trading accounts, margin accounts allow traders to access greater sums of capital, allowing them to leverage their positions. … Still, margin trading is also used in stock, commodity, and cryptocurrency markets.".
What I have constantly come across is that in normal situations It is the broker “Himself” that lends you the funds and would still collect a fee on it which is Riba (Making it haram), however on binance the funds are lent by a third party.
My apologies for such a long question, but I personally have friends who trade using that margin and I want its permissivity to be clear to me. May Allah forgive us all…Amin
1 Like
From what i understood the binance perpetual futures allow you to leverage your money without a lender.
This is what they explain in this 3 minutes videos:
It would be better if someone else also answered because i am not qualified enough, and Allah knows best
Jazakillah, just learnt from the video that futures and margin are 2 different things however in futures one would be trading derivatives which sounds just like forex. It’s all a bit confusing to me but let’s wait for the more qualified people as you said to reply in shaa Allah