Forex trading is as popular in the Islamic world as anywhere else, but Islamic traders face one notable obstacle, since they want ensure their trading account complies with Sharia law. Many Forex brokers offer account options for Islamic traders, but what about the FP Markets Islamic account? Let us find out how FP Markets handles Islamic traders.
What Is an FP Markets Islamic Account?
In our FP Markets review, we found that the FP Markets Islamic account offered as one of the FP Markets account types complies with Sharia law and offers swap-free trading. It ensures that Islamic traders can engage in Forex trading without violating their faith. Forex traders following Islam can contact customer support at FP Markets and request that their MT4 or MT5 account become an Islamic account.
FP Markets replaces swap fees with an administration fee. It also reserves the right to demand proof of the Islamic faith before granting swap-free trading accounts. FP Markets notes that if the client ID does not specify the religion, Islamic Forex traders can forward a letter from their Mosque confirming membership and proof of faith. It also recommends that Islamic traders unsure if Forex trading is halal consult their religious authority for clarification.
Why Is Interest Discouraged or Prohibited by Sharia Law?
Opinions about interest on loans, also known as riba, may differ, and Islamic scholars have various opinions, but it remains haram or forbidden. The FP Markets Islamic account neither charges nor forwards interest on leveraged overnight positions.
Some of the reasons Sharia law gives for prohibiting riba are:
- It promotes negative growth
- It disgraces the human spirit
- It corrupts society
- It lacks a social wealth aspect
- It oppresses the borrower
Islam provides the following guiding principles in finance:
- A risk-sharing philosophy between lender and borrower.
- Financial activities must promote social and economic well-being.
Key Features of an Islamic Brokerage Account
The FP Markets Islamic account offers identical trading conditions to non-Islamic alternatives, except for how it treats swap rates.
Here are the core features of the FP Markets Islamic account:
- Swap-free trading
- $100 FP markets minimum deposit
- Minimum commission-free Forex fees from 1.0 pips or $10.00 per 1.0 standard round lot.
- Minimum commission-based Forex fees of raw spreads from 0.0 pips for a commission of $6.00 per 1.0 standard round lot.
- Maximum Forex leverage of 1:500 with negative balance protection.
- ECN pricing and NDD order execution.
- Minimum Forex trade size of 0.01 lots or 1,000 currency units.
Special Restrictions for Islamic Accounts
Many brokers imply restrictions on Islamic accounts, including asset availability, geographic availability, and permission to have non-Islamic accounts besides Islamic accounts. The FP Markets Islamic account lists no special restrictions besides confirming the Islamic faith before granting a swap-free Islamic account.
What Are the Steps Involved in Opening an FP Markets Islamic Account?
Obtaining an FP Markets Islamic account is straightforward, but approval may take several days.
Here are the steps to open an FP Markets Islamic account:
- Open a MT4 or MT5 trading account with FP Markets.
- Contact customer support requesting an Islamic account.
- Wait for the onboarding team to confirm it.
- Submit supporting documents if FP Markets asks for them.
- Fund your FP Markets Islamic account once approved.
What Are Other Notable Features of FP Markets’ Islamic Account?
The FP Markets Islamic account ensures Islamic Forex traders have a Sharia-compliant Forex trading account, but Islamic traders must also have access to competitive trading conditions. Some Islamic Forex brokers place uncompetitive restrictions on Islamic accounts, primarily higher fees.
Competitive features of the FP Markets Islamic account include:
- No restrictions on trading strategies
- Algorithmic trading
- Scalping
- Copy trading
- Industry-leading trading platforms
FP Markets Islamic Account Pros and Cons
Before deciding on the FP Markets Islamic account, Islamic traders should consider the pros and cons of the FP Markets trading environment.
The Pros of FP Markets Islamic Accounts
- Choice of trading platforms and auxiliary trading tools.
- Competitive cost structure
- Well-balanced asset selection
- Low minimum deposit requirement
- Leverage of up to 1:500 with negative balance protection.
- VPS hosting for 24/5 low-latency Forex trading.
- MAM/PAMM accounts for traditional account management.
- A choice of copy-trading providers
- Well-regulated and trustworthy
- Excellent payment processor choices, including cryptocurrencies.
The Cons of FP Markets Islamic Accounts
- Availability of Iress geographically restricted.
- Limited commodities and metals selection.
FAQs
What trading platform is halal?
Any trading platform is halal as long as brokers offer Sharia-compliant trading conditions, which depends 100% on brokers and not the trading platform.
How to open an Islamic trading account?
The application process may vary between brokers, but most ask Islamic traders to contact customer support to request an Islamic trading account. Geographic restrictions may apply, and brokers often ask for proof that traders are followers of the Islamic faith.
Is Forex trading allowed in Islam?
Islam allows Forex trading as long it follows Sharia law. Many Islamic scholars continue to debate specifics, but few have argued against it. Forex brokers offer Sharia-compliant trading accounts to Islamic traders, but they must often accept higher trading fees or additional costs, most notably a daily administration fee.
Is FP Markets regulated?
FP Markets has regulatory licenses from the ASIC in Australia, the FSCA in South Africa, the FSC in Mauritius, and the CySEC in Cyprus.
What spreads can I expect with FP Markets?
Spreads at FP Markets depend on the account type, asset, and trading time, but FP Markets offers raw spreads from 0.0 pips for a commission of $6.00 per 1.0 standard round lot.
Does FP Markets offer leverage?
FP Markets leverage depends on the operating subsidiary with a maximum of 1:500 for Forex traders with negative balance protection, ensuring traders cannot lose more than they deposit.
Which platforms are supported by FP Markets?
FP Markets offers MT4, MT5, cTrader, Iress, and TradingView.
How many instruments can I trade with FP Markets?
The asset selection at FP Markets depends on the trading platform and geographical location of traders. While 10,000+ total trading instruments are available at FP Markets, it requires the IRESS trading platform, which faces geographic restrictions. MT4 and MT5 have notably fewer assets, with MT4 having the least.