Halal binary options and islamic trading accounts
Is binary options halal and compatible with Islamic traditions? This has become an important question for potential Muslim options traders as the financial industry becomes accessible to all through online trading accounts. Here we look at the implications of Sharia law on binary options trading and whether it is “Halal” or “Haram”. The growth of online trading in the financial industry in the last two decades has opened new horizons for retail traders of all castes and creeds. With a quarter of the world’s population being Muslim, it is inevitable that more and more Muslim traders will join the online Islamic binary options trading scene. In Islamic economic jurisprudence or Sharia law, “riba” or charging interest is prohibited and considered a major sin. Many brokers sensed an opportunity, leading them, as well as their Muslim traders, to “Halal”, or Islamic, trading accounts.
halal binary options broker in india
These brokers are marketing specific account types that they operate as Halal and compatible with Islamic tradition and Sharia law.
| Broker | regulated | minimum deposit | Payment | Bonus | |||
|---|---|---|---|---|---|---|---|
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IQ Option |  |
$ 10 | 91% * | »go to | ||
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Ayrex | $ 5 | 85% | % up to 30 | »go to | ||
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24Option | $ 100 | »go to | ||||
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BDSwiss | $ 10 | N/A | »go to |
General risk warning: your capital is at risk
* Amount is credited to the account in case of successful investment
Is binary options halal or haram?
The life of a Muslim is guided by Sharia law. Sharia is actually an old Arabic word meaning “the way to be followed”. A Muslim is expected to follow Islamic principles covering all aspects of his life from social matters to economic matters that were expounded in the holy religion. In the area of banking and investment, Sharia law strictly forbids lending money with interest. Instead investment in the Muslim world is governed by the concept of “risk sharing” through principles such as Bai ‘al’ inah (sale and buy-back agreements), Bai ‘bihman anjil (deferred payment sale), Bai ‘mu’azzal (credit sale) is done. ), Bai Salaam, Mudarbah (Profit Sharing), Murbah and Muswah.
When Sharia law is applied to binary options trading, it means that interest that is accrued or charged for overnight positions is prohibited as well. Trading in spot financial markets is done on a 24-hour basis. By 5 p.m. New York time, all open market positions are then rolled over to the next 24-hour cycle. The daily interest is then added to the broker’s account. Even though the binary broker debits or credits its clients’ accounts with interest like forex brokers, the fact that interest is accrued or payable during the trading transaction makes the trading “haram” for a Muslim. This situation leads Muslim traders on a collision course with their religious beliefs.
islamic trading account
To overcome this dilemma, some innovative binary options brokers have come up with the idea of an Islamic trading account or “swap free” account that eliminates any form of riba during trading. For example, instead of having an open market position automatically make interest payable overnight, open positions in Islamic trading accounts are closed at 5 p.m. New York time and then immediately reopened. Therefore any interest payable for the fresh 24 hour cycle should be avoided.
For a broker to be able to claim that they offer trading accounts based on Islamic principles, these accounts must meet at least the following conditions:
- Instant execution of trades
- Instant settlement of transaction costs
- No interest payable on trades
To help traders in their selection of brokers that offer Islamic trading accounts, we have compiled a list of the leading binary brokers that offer Islamic trading accounts. It should be noted that the above list is by no means exhaustive but just a guide.
other things
If someone uses a halal binary options account, but has little or no knowledge of what or how to trade, they will be using binary options to gamble – and this is definitely haram. Will happen. Only the individual trader can know if this is the case.
There is also a view that because there must be a ‘winner’ and a ‘loser’ in every contract or trade, this means that binary options cannot be halal, as it does not allow all parties to profit, or extract value from the trade. Not possible for. , While some brokers will offer “Islamic” accounts, and take steps to ensure that they run on Islamic principles, there will always be some who consider the whole concept of binary options haram.
Please note that this site – Binaryoptions.net – cannot take a position on whether Binary Options are in fact Halal or Haram, as we are not the religious authority on the subject. It appears that this may also depend on the skill of the individual trader, thus making it impossible for us to really advise on the matter. See references below for further clarification.