ISLAMIC ACCOUNT
We’ve made a special account for our Islamic customers that doesn’t charge or give swap fees.
These accounts, known as ‘Swap-Free Accounts,’ don’t swap or roll over interest on overnight positions,
which goes along with Islamic beliefs.
CONDITIONS FOR ISLAMIC ACCOUNT
Please be aware that individual account holders can choose between a swap-free account, also known as Islamic account or swap-standard account at any point. Goldmill Markets retains the right to withdraw the swap-free status from any live trading account if there’s any misuse detected.
WHAT EXACTLY IS A SWAP-FREE TRADING ACCOUNT AND HOW DOES IT WORK?
A swap rate, also known as a ‘rollover fee,’ is like an interest fee that you pay if you leave a trade open overnight. It’s different for each currency pair and depends on how much you’re trading (usually a standard lot, which is 100,000 base units). The rate is set using interbank rates.
Our platform respects various religious beliefs, including those governed by Islamic law. According to this law, engaging in contracts involving interest (riba) is prohibited, but currency exchange is permitted according to the teachings of Prophet Mohammed.
To accommodate traders of different faiths, we offer swap-free trading accounts. These accounts enable traders to participate in the markets without violating their religious beliefs. While the debate on whether swap-free accounts are halal continues, the final decision rests with the individual trader.
Swap-free trading accounts are tailored for individuals who, due to religious reasons, cannot engage in swaps. Instead of dealing with overnight interest charges, traders pay administrative fees. Swaps in trading represent the interest paid or received for holding positions overnight, determined by currency interest rate differences.
Check the rates listed on the MT5 trading platform for the latest swap rates.
- Please keep in mind that in spot forex trading, swap rates are set two days ahead. For instance, if you open trades on Thursday, the swap starts on Monday. And for trades opened on Friday, the swap kicks in on Tuesday.
- Also, please be aware that swap rates are tripled on Wednesdays to accommodate for the weekend (with the exception of NATGAS, where it’s tripled on Friday).
The above described swap rate structure is standard across the industry. However, it’s important to note that during weeks with holidays, adjustments may be made to the swap rate structure to accommodate for the holiday.
How is Swap Calculated?
When positions are carried over to the next day, online brokers typically pay or charge differential interest on currency pairs. At the close of a trading day, you can choose to hold your position overnight. This action will result in interest being generated, which brokers will either add (pay) or deduct (charge) from the client’s account. This practice is common in certain markets such as Forex and gold trading.
The interest arises from fluctuations in exchange rates that happen overnight when financial markets are closed.
SWAP RATES FOR CURRENCY PAIRS WITH USD AS QUOTE CURRENCY
(COUNTER CURRENCY) ARE CALCULATED AS BELOW:
Contract Size x Lots x Swap Points x Minimum Fluctuation Points x Days.
SWAP RATES FOR CURRENCY PAIRS WITH NON-USD AS QUOTE CURRENCY
(COUNTER CURRENCY) ARE CALCULATED AS BELOW:
Contract Size x Lots x Swap Points x Minimum Fluctuation Points x Days x PIP Value at the closure of market.
How do Swap-free Accounts Make Money?
Swap-free accounts, also known as Islamic accounts, earn income solely through foreign exchange trading. They avoid both interest and gambling restrictions under Sharia Law. Before diving into active trading, it’s important to understand all the risks involved with trading on margin and in the currency market.
Why not sign up for a Goldmill Markets demo account first? You can practice trading with virtual credit using the demo account to help you familiarise yourself with the markets first.
