If you are a follower of Sharia Law, is there a way for you to trade in Forex market? Yes, there is a perfect solution for that. All you have to do is open an Islamic account.
If you trade in Forex market and are a Muslim, you are not allowed to receive interest revenue on regular accounts. To avoid this, open the swap-free Islamic Account.
Originally, the interest-free broker accounts were opened only to the people based on religious beliefs. Muslims are not allowed to benefit from moneylending. For this very reason, the swap-free Islamic account was specifically designed for them.
Forex swap is an interest charged for holding open positions overnight. Calculation of its value depends on rates applied by the bank.
You have decided to open a buy on EUR/USD pair, let's say, for a couple of months. Basically, this means that you bought euros for dollars.
Let's assume that the bank has established 2 % rate for U.S. dollar, and 2.5 % for euro, respectively. In this specific case, the swap as the difference between the rates will be positive, totaling 0.5 %. However, a negative swap takes place in case of EUR/USD short position.
Either way, based on Sharia Law, Muslims are prohibited from receiving this type of revenue. They are, however, allowed to generally engage in trading activities. This explains why Islamic accounts were initially designed specifically for religious people.
Today, Gerchik & Co offers its clients a chance to use Islamic accounts as well.
Essentially, this is a regular trading account included in the company's product line. The only exception is that Islamic Account provides a swap-free option. For people of religious beliefs, Gerchik&Co sums up the swaps for the week and charges them in the form of a commission fee.
The interest-free account is not set apart in the company's product line. If you wish to open it, please contact the manager for relevant assistance.
We strongly recommend that you familiarize yourself with the company's trading terms and conditions and make your final decision on the need to take these steps prior to execution of application!