HERE IS A LIST OF FOREX BROKERS THAT OFFER ISLAMIC ACCOUNTS
Best Islamic Swap-Free Forex Brokers
Investing in forex markets may sound like a walk in the park. However, many factors determine how players in the space conduct themselves. These can include things like regulatory laws and religious guidelines. For Muslim traders, financial laws have existed for a very long time now. These laws govern how Muslims must conduct themselves in financial transactions.
In this review, we will be looking at some of the best Islamic swap-free forex brokers in Nigeria. We will specifically cover their regulations, spreads, assets available, and the trading platforms offered. But first, let’s answer an important question.
What is Islamic Forex Trading?
Islamic finance principles prohibit the payment or receipt of interest, also known as "riba." This prohibition is derived from Islamic teachings. It extends to various financial transactions, including forex trading. In a conventional forex trading setup, traders earn or pay interest (swap or rollover fees) when holding positions overnight. This interest is considered extortionate in Islamic finance, leading to the need for specialized accounts that comply with Sharia law.
Islamic forex trading, therefore, involves the use of swap-free accounts that eliminate interest-based transactions. Instead of interest, the broker may widen spreads or charge a small administration fee for maintaining positions overnight. The absence of interest aligns with Islamic principles, This makes forex trading accessible to a broader audience of Muslim investors.
Now let’s look at some of the best Islamic swap-free forex brokers in Nigeria.
Best Islamic Accounts
Exness
Exness is one of the most reputable brokers that offers Nigerian traders Islamic accounts. Exness provides five main trading accounts, two standard accounts and three professional accounts. Swap-free status can be applied to any of these accounts. No overnight fees are charged for any positions held overnight on the swap-free accounts. Swap-free status is applied automatically for accounts registered in Islamic countries. On the other hand, conditional swap-free status applies to non-Islamic countries.
On Exness, traders can access over 250 different trading instruments from 6 main global markets. Nigerian investors can trade CFDs on forex, cryptocurrencies, metals, energies, indices, and stocks. All these are available to trade on various platforms which include MetaTrader 4, MetaTrader 5, and Exness Terminal.
Additionally, the spreads on this trading site are competitively low starting from as low as 0.3 pips on the standard account and the standard cent account. On the raw spread and the zero accounts, the spreads start from 0.0 pips. They charge a commission of $3.5 per side per lot for the raw spread account and $0.2 and upwards for the zero account. The pro account has spreads from 0.1 pips with no commissions required.
On regulations, this broker does not disappoint. It holds licenses from the FSCA in South Africa, the CMA in Kenya, the CySEC in Cyprus, and the FCA in the UK.
FP Markets
FP Markets is a well-established trading platform that was launched in 2005. The broker has provided traders access to a wide range of instruments for over 15 years. On this broker site, there are over 10,000 different instruments available for traders to access. Specifically, people can trade currency pairs alongside CFDs on indices, shares, metals, cryptocurrencies, commodities, ETFs, and bonds.
Traders can enjoy low spreads when trading with this broker from as low as 1.0 pips on the standard account. However, the Raw account has even lower spreads starting from 0.0 pips and a commission of $3 per side per lot. Muslim traders do not have to pay any overnight charges when using the broker’s Islamic accounts. However, these accounts have an administration fee on positions which the broker deducts from the account balance. Additionally, these accounts are only available on the MetaTrader platforms. Therefore, they are not available on Iress and cTrader.
Fortunately, you come across reputable regulation watchdogs overseeing its operations. The broker operates under the supervision of the FSCA in South Africa, the CySEC in Cyprus, and the ASIC in Australia.
XM.com
XM is an online trade platform that began operations in 2009. Accordingly, traders can access swap-free accounts otherwise known as Islamic accounts. XM is aware of Sharia laws and offers traders of the Islamic faith an account that does not charge interest on overnight positions. This account includes no swaps on overnight positions, no spread widening, and positions that can be held with no time limit.
On this broker site, traders have access to over 1,000 different assets. Such variety is an attractive feature to all kinds of traders. Categorically, this broker site gives traders access to forex pairs, cryptocurrencies, indices, stocks, precious metals, shares, and energies. These markets are accessible on various platforms which include MetaTrader 4, MetaTrader 5, and the XM Trading App. The spreads go as low as 0.6 pips on the XM ultra-low account.
Notably, this broker is also under the watchful eye of various regulators including the CySEC, the ASIC, and the FSC.
XTB
We cannot leave out XTB from a list of the best Islamic forex brokers in Nigeria. This broker received the award for the best Islamic forex broker of 2018 in the Global Ventures Awards. The Swap-free account offered by this broker has almost identical features to the Standard account. However, the Swap-free account has slightly higher spreads starting from 0.7 pips for major currencies. The standard account has spreads that start from 0.5 pips for major currencies. Needless to say, the Swap-free account does not charge any swaps for positions held overnight.
In total, this broker offers traders access to more than 2,100 different assets to trade. These include CFDs on forex, commodities, cryptocurrencies, indices, shares, and ETFs. However, there is only one trading platform available to use, the in-house-built xStation 5.
Finally, let’s see how this broker is regulated. Well, XTB is subject to the regulation of the FSCA in South Africa, the CySEC in Cyprus, and the ASIC in Australia.
FXTM
FXTM is an online forex and CFDs broker providing access to various trade instruments. These include forex, metals, commodities, indices, forex indices, stocks, stock baskets, and stock CFDs. The investment firm provides its users with multiple trade accounts to meet all diverse requirements. Luckily, for Muslim traders, an Islamic account is available that is in line with Sharia law.
FXTM offers traders three main trading accounts. These include the micro, the advantage, and the advantage plus accounts. The swap-free option is available on all accounts except when using MT5. Additionally, it does not apply to exotic currencies. Traders can apply the swap-free option when registering for an account or they can apply it later on the Accounts Overview section.
The spreads on FXTM depend on the account a trader is using. The micro and the advantage plus account both feature spreads from as low as 1.5 pips for major currencies. In comparison, the advantage account allows traders to pay commissions of about $0.4 to $2 depending on the volume with spreads from 0.0 pips.
Fortunately, FXTM is regulated in various jurisdictions. These include in South Africa by the FSCA, in the UK by the FCA, and in Cyprus by the CySEC.
HXM
HF Markets or HFM also known as HotForex is an online broker that began operations in 2010. The broker offers a wide range of trade instruments including forex, metals, energies, indices, stocks CFDs, commodities, bonds, ETFs, physical stocks, and cryptocurrencies. The trading platforms available to use include MetaTrader 4, MetaTrader 5, and the HFM Platform.
HFM offers traders four different trading accounts, all of which have swap-free options. The four accounts include the premium account, the cent account, the pro account, and the zero account. The premium account and the cent account both feature spreads as low as 1.2 pips for major currencies with no commissions. The pro account features lower spreads starting from 0.5 pips for major currencies with no commission. Lastly, the zero account has spreads that are as low as 0.0 pips with a floating commission from as low as $0.03 per 1k lot.
The regulatory status of a company is key to look at before investing with the broker. Fortunately, HFM has regulations in multiple jurisdictions. The broker operates under the regulations of the FSCA in South Africa, the FCA in the UK, and the CySEC in Cyprus.
AvaTrade
AvaTrade is another reputable broker that offers Nigerian traders an Islamic account. The steps to signing up for an Islamic account are fairly simple. All a trader has to do is verify their accounts with the relevant documents. In accordance with Sharia law, the Islamic account offered by AvaTrade does not charge any rollover fees. However, traders can only keep positions open for a maximum of 5 days. After this, positions still open start to incur a fee. On a positive note though, the Islamic account gives traders 24-hour access to CFD on forex, shares, commodities, bonds, and ETFs. Additionally, the account allows for Halal trading of gold and silver, oil, and indices.
Nigerian traders will be pleased to know they will be investing with a well-regulated company. AvaTrade operates under the watchful eye of the FSCA in South Africa, the Central Bank of Ireland, the CySEC in Cyprus, and the KNF in Poland. AvaTrade accepts credit and debit card payments, Paypal as well as Neteller.
Additionally, the fees charged by this broker are competitively low starting from as low as 0.9 pips for major currency pairs with no commissions required. The trading platforms available to use include MetaTrader 4, MetaTrader 4, and AvaTradeGO.
In conclusion, navigating the world of forex trading with adherence to Islamic principles has become increasingly accessible. There is now a presence of reputable brokers offering Islamic swap-free accounts. The brokers recognize the importance of providing Sharia-compliant alternatives for Muslim investors. In this review, we explored some of the best Islamic swap-free forex brokers in Nigeria. We shed some light on their regulatory compliance, spreads, available assets, and trading platforms.
The brokers we have on this list stand out for their quality of service and commitment to inclusivity. They all offer accounts to accommodate traders who have to follow Islamic religious laws when trading. Nonetheless, it is upon each trader to pick and choose a broker that best suits their needs.