The popularity of binary options is growing throughout the globe, including in the East. Many residents of the Middle Eastern and Far Eastern countries are interested in trading on this market. However, in countries professing Islam, a problem arises: Sharia law does not allow trading binary options, and here's why:
- According to the holy book of Muslims - the Koran, usury is not allowed. It is strictly prohibited to lend money at interest. In this case, we mean leverage and accrual of profit in the event of a successful transaction;
- There is no real asset in binary options, so they are interpreted by followers of Islam not as a type of trading operation, but as a game of chance. And everything related to gambling is considered a wrong way to generate income and is prohibited by Sharia law;
- in long-term transactions, a fee is charged for transferring positions “overnight”, which is also unacceptable.
However, for binary options brokers, Eastern countries represent a large number of potential clients. Therefore, they tried to develop accounts for Muslims (Swap free), which do not contradict the teachings of the prophet Mohammed.
Islamic accounts in binary options
The main idea of Islamic Swap free is that Sharia law does not allow dealing with derivatives, as well as gambling, but allows you to invest your funds and receive dividends from them. The types and types of deposits from different brokers may have their own characteristics, but they are all based on general principles:
- no swaps (commissions for transferring an open transaction to the next day). Traders from other countries would also not mind taking advantage of this condition in order to save their capital. However, brokerage companies do not agree to give up profits, so they may provide special conditions in the contract - confirmation of place of residence when withdrawing funds. If not confirmed, you lose all your income;
- not gambling, but investing. Brokers solved the problem of usury, that is, lending at interest without creating a real product, by simply changing the approach to the issue itself. Currently, when opening an Islamic account, the user sees a message explaining that he is investing money and not betting on a random outcome. In this case, Sharia law allows online trading.
Trading binary options in the classical form is not permitted by Islam. However, everything looks completely different if the transactions are presented as business investments. Therefore, the main difference between accounts for Muslims is the absence of swap.
You can learn more about the conditions for opening Swap free accounts offered by different brokerage companies on our website winoptionsignals.com in the broker reviews section - reviews of binary options brokers . To find out the details, click the “Show more” button and go to the appropriate section.
See also:
The best binary options broker! Who is he?
How to trade on weekends. What are OTC quotes?
To leave a comment, you must register or log in to your account.