Islamic account in binary option trading demo
An acceptable Islamic binary options trading account will allow you to trade on the markets based on the direction the price of an asset will move in. Forex trading requires you to understand the relations between currencies as well as the price direction. Trading on either market is possible but it is essential to consider the main issues which can cause a problem with Islamic standards. These are that no Muslim should earn or charge interest and that greed and gambling are sins.
There are now several binary options brokers who have developed Islamic accounts specifically designed to avoid these issues. Interest is generally earned or charged when a transaction continues outside of the market opening hours.
To avoid this the brokers are freezing a trade at the end of the business day and reopening it at the start of the next day. There is no interest earned or charged. Provided there are no commission fees or charges you are then able to trade within the Islamic guidelines. However, greed is another matter. The generally accepted protocol is to trade with knowledge of the market; you cannot then be said to be gambling or trading with greed.
It is also imperative to limit the amount and value of the trades you undertake. If you are seen to be spending an excessive amount or attempting to hide your spending then it will be seen as greed or gambling.
This will then mean that you are indulging in a forbidden activity and the penalties can be severe. It is worth noting that binary options trading with currency pairs are seen as a grey area; as is trading on the Forex. The issue is that this type of trading is seen as gambling. The safest way to trade within your guidelines is to avoid this type of trade. To help traders in their selection of brokers that offer Islamic trading accounts, we have compiled a list of leading binary brokers that offer Islamic trading accounts.
It should be noted that the list above is by no means exhaustive but is just a guide. If someone used a Halal binary options account, but had little or no knowledge of what or how to trade, then they would be using binary options to gamble — and this would certainly be Haram. Only the individual trader can know whether this is the case. Please note that this site — binaryoptions. It appears that it might also be dependent on the skills of the individual trader, thus in reality making it impossible for us to give advice on the matter.
See the references below for further clarification. Is Binary Options Halal or Haram? Immediate execution of trades Immediate settlement of transactional cost No interest payable on trades To help traders in their selection of brokers that offer Islamic trading accounts, we have compiled a list of leading binary brokers that offer Islamic trading accounts.
Other considerations If someone used a Halal binary options account, but had little or no knowledge of what or how to trade, then they would be using binary options to gamble — and this would certainly be Haram.