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In short, Islamic trading accounts were created specifically for people who want to actively trade while following all the principles of Islamic financial laws. This type of account is commonly referred to as a 'swap-free account' - meaning that there is no interest (which is forbidden for people of the Islamic faith).

If you are faithful to the Quran, you need to find an Islamic trading account to abide by the rules of Shariah law without worrying about paying or earning interest. Although there are not as many Islamic brokers as traditional brokers, more are popping up year after year. It is worth noting that not all brokerages offer specific "Islamic accounts", but many offer a standard account - but one that is tailored to your needs and Shariah law.

Halal trading basics

As we have already touched on, Islamic accounts in exness trader app were created to accommodate the basic principles of Islamic financial law, which can otherwise complicate the trading process.

The relationship between the borrower and the lender is really important when it comes to the fundamentals of Shariah law. For example, interest is considered unethical because the person who borrows bears most of the risk while the lender receives the reward. In the Islamic faith, this interest is called "riba", but more on that in a moment. We've put together a guide to the basics of halal trading to shed a little more light on the key rules that must be adhered to in order to remain true to your faith.

Hand in hand trade

As we said earlier, the issue of trade, which is generally considered Haram, is not a no-frills issue. According to Shariah law, trade is halal if it is done "hand in hand". Hundreds of years ago, this referred to direct trade in things like gold, wheat, dates and salt.

Fast forward to the 21st century, of course, and most trade is conducted online. A lot has changed: Almost 60% of the world now has access to the internet, and nearly 10 million traders use online brokers to invest regularly in markets around the world.

The basics of hand-in-hand trading remain - the trading contract must be completed in full within the same "session". This means that all orders must be executed immediately.

Riba: Interest

In English, the word "Riba" means "interest". In Arabic it means increase and surplus. Riba is undoubtedly haram, mainly because it is believed to promote negative growth and a corrupt society.

It is believed that a reference to this belief was revealed in the first revelation of the Holy Quran between 609 and 632 AD.

"That which you give as interest to increase the wealth of the people does not increase with God; But that which you give for charitable purposes and seek the goodwill of God multiplies. "

There is a practice by which followers of the Islamic faith counter this - it is called 'Bai' al-'Inah '(sale and redemption).

Here is an example of this kind of lending:

•     Imagine someone sells an asset to you.
•     You do not buy the asset with real money
•     The 'lender' gives you the asset on credit at a fixed price
•     The lender includes a profit component
•     The lender immediately buys the asset back in real money (at a fixed price).
•     This means that the lender is the owner of the asset - and you have the cash injection you need
•     Finally, you have to pay the value of the above asset in instalments
•     In addition, you have to pay the profit component

When you trade Halal through Islamic brokerage accounts, the provider ensures that you do not pay or receive any interest on your account as per the above Riba rule. For those who do not know, the same applies to bank accounts, mortgages and savings accounts.

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