Islamic Swap Free Account

In Stocks, there is the payment of swaps every day: this is the interest rate of a stocks instrument that the stocks instrument earns per day. This interest for a stocks instrument like the Australian Dollar is 5%, this means that every day a fraction of this five percent is paid to anyone holding this Australian Dollar.

This brings the Issue of paying and getting paid interest which is an Issue in the Islamic Religion. Islamic Religion does not allow paying & getting paid an interest payment, For Islamic stocks traders there's a account designed in accordance with their Values: Referred to as Swap Free.

For this stock account a trader will not pay the overnight rollover interest on any stock and will also net get paid any interest, this is also known Shariah Compliant where there is no paying of RIBA (interest) - also referred to as Islamic Accounts.

For a trader to get a swap free account, a trader has to go to a stocks Islamic stocks broker and select option of "Islamic Account", This option is provided under the Accounts Section of the broker specifying the instructions of opening one of these trading accounts.

Once a trader opens a this stock account, then the Stocks Trading rollover interest is removed. Once this no paying of interests is set, if a trader is using a trading platform such as MT4 then the rollover fee record will be set to zero.

Rollover fee is charged daily at the end of the trading day for those holding a particular stocks instrument for which a swap is to be applied. As a trader if you do not want to pay this rollover you should close your trades before the end of the day, that way you will not pay the rollover fee as you are no longer holding open stocks trade. Because the stocks market does not open on Saturday and Sunday, the rollover for these 2 day will be charged on Wednesdays, meaning on Wednesday one will pay the rollover for Wednesday, Saturday & Sunday, & therefore on Wednesdays this rollover fee is paid 3 Times.

These positions that pay a rollover interest are commonly referred to by traders as Overnight Trade Positions. Day Traders rarely leave their trades opened overnight & close them all before the end of the day. Swing Traders on the other hand might leave their trades opened for a few days & leave these trades overnight so as to capture more movement in the stocks price trend.

Once a trader finds a swap free stocks broker and opens and Islamic Account, the trader will have the same trading conditions as those of other traders, except for the paying of rollover fees. This means a trader will use the MetaTrader 4 Stock Platform like all the other traders, the trader can trade all currencies, all indices, all CFDs, all metals and all other Financial Instruments provided by the stocks Islamic broker.

However, be careful in selecting a swap free broker, some brokers will add a commission or add some pips to the spread you trade with to cover the swap(Swap Fee Broker). This isn't supposed to happen as the trader will still be paying for the interest even though is disguised as another charge, good stocks Brokers do not add any commission nor do they add any charge onto the spread.

Another thing is that some brokers will charge a rollover fee (swap fee) if the position held by a trader is held for more than 5 days or more than 7 days, this should not be the case & the broker should not charge any carryover interest even if open trades are held for more than five or seven days. For traders wanting to open this swap free account with a stocks Islamic stocks broker it's good to check for any additional terms of trading for the Islamic Account that you are going to be opening to make sure that the broker you select is really a no swap broker.

Islamic Stocks Account

Swap free trading accounts were introduced by online brokers after demand for carry over interest free accounts grew among the Islamic stocks traders. Traditional trading account entailed paying of rollover interests in what is known as rollover interest. This led to the introduction of Interest Free Accounts that Islamic traders could open & still keep in line with their rules on no paying & getting paid interest.