Halal Trading
With Islam the second-largest religion in the UK, investors are increasingly interested in whether online trading is Halal or Haram. To answer that question, we breakdown Halal trading principles across forex, stocks, CFDs and cryptos. We also look at the best trading platforms and accounts for Islamic traders.
Please note this site is not a religious authority on the subject of Islamic trading. To be certain your trading activities are Halal, we recommend consulting with a religious authority that can consider individual circumstances.
Islamic Trading Accounts
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Founded in Australia in 2010, Pepperstone is a highly regarded broker specialising in forex and CFDs. Serving more than 400,000 clients globally, it provides access to over 1,300 financial instruments through popular platforms like MT4, MT5, cTrader, and TradingView. Its fee structure is both low and transparent. With regulation by reputable bodies such as the FCA, ASIC, and CySEC, Pepperstone guarantees a safe trading environment for traders at every level.
Instruments Regulator Platforms CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto (only Pro clients), Spread Betting FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
Established in Poland in 2002, XTB caters to over a million clients worldwide. This forex and CFD broker offers a robust regulatory framework, a diverse range of assets, and prioritises trader satisfaction. It provides an intuitive proprietary platform equipped with excellent tools to support aspiring traders.
Instruments Regulator Platforms CFDs on shares, Indices, ETFs, Raw Materials, Forex currencies, cryptocurrencies, Real shares, Real ETFs FCA, CySEC, KNF, DFSA, FSC, SCA, Bappebti xStation Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 -
Founded in 1989, CMC Markets is a reputable broker publicly listed on the London Stock Exchange. It holds authorisation from top-tier regulators such as the FCA, ASIC, and CIRO. The brokerage, which has received multiple awards, boasts a global membership exceeding one million traders.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, ETFs, Treasuries, Custom Indices, Spread Betting FCA, ASIC, MAS, CIRO, BaFin, FMA, DFSA Web, MT4, TradingView Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
FXCC, a well-established brokerage since 2010, offers cost-effective online trading. Registered in Nevis and regulated by CySEC, it is distinguished by its ECN conditions and absence of a minimum deposit requirement. The account opening process is efficient, taking under five minutes.
Instruments Regulator Platforms CFDs, Forex, Indices, Commodities, Crypto CySEC MT4, MT5 Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:500 -
IC Markets is an internationally acclaimed forex and CFD broker, admired for its competitive pricing, diverse trading instruments, and superior technology. Established in 2007 and based in Australia, the firm is under the regulation of ASIC, CySEC, and FSA. It has successfully drawn over 180,000 clients from more than 200 nations.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Bonds, Futures, Crypto ASIC, CySEC, FSA, CMA MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $200 0.01 Lots 1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global) -
Founded in 2006, FxPro has built a reputation as a reliable non-dealing desk (NDD) broker, providing trading access across more than 2,100 markets to over 2 million clients globally. It has received over 100 industry awards, reflecting its favourable conditions for active traders.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Futures, Spread Betting FCA, CySEC, FSCA, SCB, FSA FxPro Edge, MT4, MT5, cTrader, AutoChartist, TradingCentral, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $100 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
IC Trading belongs to the reputable IC Markets group. Designed for dedicated traders, it offers highly competitive spreads, dependable order execution, and sophisticated trading tools. However, it operates from Mauritius, an offshore financial centre, allowing high leverage but within a less regulated environment.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Bonds, Cryptos, Futures FSC MT4, MT5, cTrader, AutoChartist, TradingCentral Min. Deposit Min. Trade Leverage $200 0.01 Lots 1:500 -
Eightcap, an acclaimed broker regulated by the FCA, offers exceptionally low trading costs. Recognised as the top-rated brand by TradingView's vast user base of 100 million, traders can directly access the platform. UK traders can open a live account with a minimum deposit of just £100.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities ASIC, FCA, CySEC, SCB MT4, MT5, TradingView Min. Deposit Min. Trade Leverage £100 0.01 Lots 1:30 -
Established in 1999, FOREX.com is now integrated into StoneX, a prominent financial services entity catering to more than one million clients globally. The broker is regulated in numerous jurisdictions, including the US, UK, EU, and Australia. It offers a vast array of markets beyond forex, delivering competitive pricing on state-of-the-art trading platforms.
Instruments Regulator Platforms Forex, CFDs, Stocks, Indices, Commodities, Futures, Options, Crypto NFA, CFTC, CIRO, FCA, CYSEC, ASIC, SFC, FSA, MAS, CIMA MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral Min. Deposit Min. Trade Leverage $100 0.01 Lots 1:30 -
Fusion Markets, an online broker since 2017, operates under the regulation of ASIC, VFSC, and FSA. Renowned for offering cost-effective forex and CFD trading, it provides various account options and copy trading solutions to suit diverse trading needs. New clients can begin trading with a simple three-step registration process.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Crypto ASIC, VFSC, FSA MT4, MT5, cTrader, TradingView, DupliTrade Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:500
What Is Halal Trading?
To operate within the parameters of Islamic law, four principles need to be followed:
- You must not pay or receive interest (Riba)
- Transactions must be immediate (‘hand to hand’)
- You must not gamble (Gharar)
- Dispensation of risk and reward
Is trading Halal or Haram?
1. Riba
Whether trading currencies, stocks or cryptos, many brokers offer leverage. This is essentially a loan used by traders to increase position sizes and associated profits. For example, you deposit £10 and your broker loans you 30x that so you can trade with £300. However, many scholars consider margin trading Haram as brokers make a profit on the borrowed amount, which is considered a form of interest.
In response, many Islamic-friendly brokers now offer interest-free (swap-free) accounts. Instead of charging overnight interest on loans, brokers increase commission charges. While still debated in some academic circles, for many, this alleviates Riba concerns.
2. Hand To Hand
Another obstacle when it comes to answering whether investing in the financial markets is Halal or Haram is the question of hand to hand exchanges. Trading is considered Halal if exchanges are settled immediately and face to face. This is in line with the daily need to exchange commodities, such as grain, for thousands of years. Of course, technology means that exchanges can now be made online. But does that make trading forex, for example, Haram?
Many scholars are content that if agreements are made solely between a broker and trader and executed in the same session, then the hand to hand principle is satisfied. Intraday trading XAUUSD, for example, could be permissible. With that said, long-term investing using binary options with expiries in the future may be considered Halal, as they are not settled immediately.
3. Gambling
It is generally accepted that gambling is Haram. However, some scholars are comfortable with trading currency, stocks or cryptos if the objective is to generate profits and investments are grounded in analysis versus guesswork. Rather than wild speculation, a careful and considered approach to online day trading may be considered Halal. With this in mind, it’s important to open an account with a broker that offers comprehensive market analysis tools.
4. Risk & Reward
Another consideration is the risk and reward of trades. In particular, Islamic laws and principles highlight the issue of shared risk. This issue is governed by principles such as Bai al inah (sale and repurchase), Bai muajjjal (credit sale), Bai salam, Mudarabah (profit sharing), and Bai bithaman ajil (sale with deferred payment).
Fortunately, if we take forex trading as an example, we can see that if the market moves in your favour, you may see a profit. However, if exchange rates move against you, then your investment may lose money. In effect, you are sharing both risk and reward.
Islamic Accounts
Islamic trading accounts are available at many top brokers. Carefully adapted, these online trading accounts aim to comply with Islamic law. Firstly, they aim to remove interest charges for positions held open overnight. Additionally, they remove any interest charges which may conflict with Riba. Finally, Halal trading accounts offer immediate executions. By removing settlement delays, they endeavour to comply with the hand to hand principle.
Islamic account opening requirements are similar to standard trading accounts and may require proof identity and residency.
Pros Of Halal Trading
- May provide access to the financial markets without breaching religious reliefs
- Trading on forex, stocks and cryptos is available without high swap rates and rollover charges
- Islamic traders can invest on the same leading online trading platforms offered with standard accounts
Cons Of Halal Trading
- Traders may encounter increased commissions and wider spreads to compensate for zero swap rates
- Some trading instruments, such as futures, may not comply with Islamic investing principles
Is Online Trading Halal Or Haram?
Investing in the financial markets often leads to debate within Islamic trading circles. Many of the best Halal brokers today offer what they consider to be Islamic friendly accounts, platforms and trading apps. With that said, it’s always worth doing your own research and consulting a religious authority for guidance on individual circumstances.
This article does provide religious guidance. Instead, we have collated multiple viewpoints which we have presented for our readers’ consideration.
FAQs
Is Stock Trading Halal Or Haram?
Trading stocks and shares may be permissible under Islamic law. This is because you are owning part of the business. The key concern is whether the activities of that company comply with Islamic law. For example, investing in companies dealing in alcohol, tobacco, gambling, insurance, and nightclubs would be considered Haram. Alternatively, firms operating in shipping, clothing, real estate and medical supplies are considered ‘clean’ companies.
Is Trading Futures & Options Halal Or Haram?
Futures contracts are typically considered Haram as trades are deferred and not executed immediately. Transactions may not comply with Islamic finance principles as they can involve interest, uncertainty, gambling, and speculation. Similarly, the speculative nature of options trading with no shared risk or reward is considered Haram in many circles. With that said, some believe that if accounts remove interest charges and traders take investing seriously, then it may be Halal.
Is Trading Commodities Halal Or Haram?
Many Islamic forums agree commodity trading is Halal if price and quantity are identical i.e. of equal weight. If commodity classes differ such as trading gold for silver, payment must be made hand to hand to comply with Islamic law. Extended periods between contract and delivery may breach Riba and be considered Haram.
Is Forex Trading Halal Hanafi?
Forex trading is generally considered to be Halal if certain principles are followed. These include the immediate settlement of transactions, lending itself to intraday trading strategies, as well as investing without interest payments and taking a considered approach to the market rather than speculative gambling. Consult your religious authority if you have additional questions.
Is Trading Bitcoin Halal Or Haram?
Scholars are undecided on whether investing in cryptos such as Bitcoin is Halal or Haram. Many feel the speculative gambling nature makes Bitcoin trading Haram. Others believe that with the right account conditions, such as zero swaps and intraday settlements, investing in the digital coin may be Halal.
Is Trading 212 Halal Or Haram?
Currently, the broker does not offer an Islamic trading account. With that said, the brokerage does offer an account with zero leverage and interest that includes Halal ETFs. See our review of the broker before you open an account. You can also contact the broker’s customer support team if you have any questions.
Is Trading Halal In Islam?
Trading may be Halal if Islamic finance principles are followed. Many brokers offer Islamic accounts that respect religious values when investing. With that said, you should speak to your religious leader if you have any questions or require further guidance.