FOREX TRADING FOR MUSLIM
Muslim Forex accounts are popularly known as “No Riba” accounts. These accounts are structured to enable members of the Muslim community trade Forex, without breaking the teachings of Shariah law. The Islamic law dictates that Muslims should not expect anything in return, when they give. This means that a Muslim should not take any kind of interest, while doing any business transaction. This belief led to the development of Forex accounts for Muslims. Initially, the accounts were strictly reserved for practicing Muslims, to lock out the non-Muslims, and non-practicing Muslims. Nowadays, it is much easier to open the account, even if you are not a Muslim.
In Forex trading, interest is charged on accounts that are left overnight, by clients. These charges, also known as SWAPs or Roll Over fees, are charged to cover for the additional charges by banks, for leaving a transaction open through the night. The amount of roll over fees charged is based on several factors. Most prominent of these factors, is the currency trading pair being traded in. Since this charge is a form of interest, it varies from one bank to the next, and is revised regularly.
Holders of Islamic Forex accounts can also exploit the benefit of not paying roll over fees. Islamic Forex accounts are charged a flat rate, per standard lot. Afterwards, the account holder is allowed to keep the position open for an unlimited amount of time. They do this, and leave a position open for a long time, until the position gets into a profitable zone. This affects the Forex company, since it is left to pay the SWAPs to the bank. When the position becomes profitable, the bank charges a roll over fee. However, these fees cannot be charged to the Islamic Forex account, which forces the trading provider to absorb the SWAPs. The client then cashes the profit earned, at the expense of the Forex company.
SYARIAH ACCOUNT
ISLAMIC FOREX ACCOUNTS – ISLAMIC FOREX TRADING WITH RGCX
Islamic forex accounts are a specific category of forex trading accounts also known as interest free or swap free forex accounts for Muslim clients.
Islamic forex trading accounts allows Muslim clients to trade on interest free accounts (SWAP free or Roll Over fee) with no extra charge or penalty to trade in adherence with the Islamic principles. Clients can open and close positions at any time within the RGXC Metatrader 4 system without being constrained to holding them for a defined period.
SOME COMMON ISLAMIC FOREX TRADING ACCOUNT CONDITIONS INCLUDE:
No Riba Policy:
Clients benefiting from RGCX No Riba policy may hold positions for an undetermined time at the original opening price until they are closed and no charges will occur. RGCX may revoke the ‘No Riba’ policy in case of abuse with a 48 hour notice by email.
Musharaka or commonly called joint venture:
This refers to a partnership or joint venture for a specific business with a profit motive, whereby the distribution of profits will be apportioned according to an agreed ratio. In the event of losses, both parties will share the losses on an agreed ratio. In RGCX, we called this account as VIP ACCOUNT.
Hibah (Gift or Donation):
The term ‘hibah’ refers to gifts awarded voluntarily in return for a loan. RGCX will select different organizations in order to enable investors to donate a percentage of their profits to them.
At RGCX, we offer clients the choice to choose Islamic Forex Trading conditions for any of our Forex account types including Mini, Standard or EGTA accounts, regardless of base currency or leverage offered.
The Islamic Accounts offered by RGCX are not the same as the Islamic Accounts generally offered by other Forex companies. It differs based on the fact that RGCX offers SWAP free accounts with no other additional charges, whereas most other companies transfer this fee by widening the spread on Islamic Accounts. In order to abide by Islamic laws, one must not pay interest but if that interest charge is transferred to a different type of fee, it is basically still a charge to cover the interest. This is also referred to as a SWAP fee in disguise.
RGCX does not do this, again demonstrating that RGCX offers fair and ethical trading conditions.
To open an Islamic Forex account with RGCX, simply complete our registration page and choose from Mini Account , Standard Account or EGTA Account.
