Binary options and Islam

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Binary options are becoming popular around the world and the countries of Near and Far East is no exception. But here’s the problem: Sharia law does not allow the residents of these Islamic countries, to sell them. This is due to the following reasons:

  • The Koran does not allow any operations with credit money and accrued interest. Talking about leverage and interest rates for correct prediction;
  • binary options that do not have a real asset, interpreted by Muslims as gambling, not as a transaction. And all that is connected with passion, is prohibited by Sharia;
  • the fee for transfer of positions (for expiry more than 24 hours) are not allowed.

For brokerage companies Eastern market is a good potential influx of customers. Therefore, in order to circumvent the laws of Islam, was designed Islamic account (Swap free).

Islamic accounts in binary options

The principle of Swap free for Islam is that Sharia law prohibits gambling and derivatives speculation, but allowed investment and dividend income. Despite the fact that the individual terms of trade for  representatives of Islam may be different, their general principles are the following:

  • commission for transferring your position on the following day (swap) will be charged. It would seem, here it is the loophole that saves! But the brokerage companies are not ready to give up profits, so contracts can have nuances — requirement of confirmation of place of residence at the time of profit withdrawal. Have not confirmed — lost all the money;
  • usury, that is receiving income without creating the surplus product, is prohibited, as is gambling. Brokers have bypassed this problem by the principle “if you cannot resolve the issue, then we need to change the approach to it.” And now when you open an account of “Islam” you see an explanatory inscription, that he does not make stake but invest money. And then binary options Islam are allowed.

In fact, binary options Shariah are not allowed. But if you imagine the trade as an investments, all appear in a completely different light. Because the only significant difference of Swap free — no swap.

On the website of the investment exchange portal you can read the terms of  binary brokers that offer Islamic accounts. To find out whether the company offers this service, you can check by clicking on the link “Show more” and navigating to “Details”. If you have questions, ask them in the comments after the article.

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