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Are you a Muslim trader unsure if you can trade with a swap-free, Sharia-compliant Islamic account at XM? During my comprehensive XM review, I analyzed all available XM account types, including the XM Islamic account. Read my analysis and determine if the XM Islamic account provides you with the most competitive trading conditions, learn about the pros and cons of the XM Islamic account, and understand if you get fair treatment as a Muslim trader.
What Is the XM Islamic Account?
Muslim traders cannot pay or receive interest and require an Islamic account for leveraged overnight trading. When I conducted my XM review, I discovered three XM account types suitable for Muslim traders, the XM Islamic account, the XM Shares account, and the XM demo account. The XM Islamic account is a Sharia-compliant swap-free trading account for Muslim traders who keep leveraged overnight positions, as it neither pays nor receives financing rates, also known as swap rates.
My XM Islamic account review found that XM did not add extra costs to replace lost revenues from the absence of swap rates. Therefore, XM is a rare broker that does not substitute wider spreads or high administrative fees for swap rates, placing it among the best Forex brokers offering Islamic accounts.
Key Features of an Islamic Brokerage Account
The core feature of an Islamic brokerage account is the absence of swap rates. Islamic accounts are Sharia-compliant, allowing Islamic traders to engage in leveraged trading without violating their faith, but trading conditions differ among brokers. Muslim traders can explore the trading conditions in the XM demo account.
Special Restrictions for Islamic Accounts
Special restrictions for Islamic accounts include asset limitations, proof that a trader follows the Islamic faith, restrictions on the trading platform selection and leverage settings, potential time limits on how long Islamic traders can keep leveraged overnight positions open before they incur excessive daily administrative fees, and geographic restrictions.
Here is a statement from XM concerning swap-free eligible assets:
“Traders can check swap-free eligible assets in the XM members area by clicking the instrument selection and then the Ultra Low account tab”.
Why Is Interest Discouraged or Prohibited by Sharia Law?
Islamic traders should consult their Imam to clarify why receiving interest is discouraged or prohibited under Sharia law, as this is a religious matter. Even scholars continue to debate how this applies to financing. The XM Islamic account complies with Sharia law, allowing Islamic traders to stay true to their faith while engaging in leveraged trading.
Notable Features of the XM Islamic Account
During my XM broker review, the absence of replacement fees to compensate for the loss of swap fees stood out.
Other key features of the XM Islamic account are:
- No swap rates, making it Sharia-compliant
- Low commission-free XM fees from 0.8 pips or $8.00 per 1.0 standard round lot
- No increased spreads or trading restrictions
- An XM demo account
- Ultra-competitive XM leverage of 1:1000 with negative balance protection and automatic stop-outs at a 20% margin level
- Algorithmic trading via MT4 and MT5
- Micro account option
- 100+ trading competitions with $1.5M+ in awarded cash prizes distributed among 2,500+ winners
- Quality education and research for beginners
- A 100% bonus of up to $500
What Are the Steps Involved in Opening an XM Islamic Account?
Islamic traders must open an XM Ultra Low or Shares trading account and then change to a swap-free XM Islamic trading account from the XM Members area.
Here are the steps to open your XM Islamic account:
1. Click “Get Started” on the XM homepage.
2. Follow the on-screen instructions to open an XM Ultra Low or Shares trading account.
3. Log into the XM Members area and switch to swap-free trading.
XM Islamic Account Pros and Cons
Before opening an XM Islamic account, traders should consider the pros and cons.
The Pros of the XM Islamic Account
- A well-regulated and trustworthy broker
- Unlimited swap-free days on qualifying assets
- No replacement fees or trading restrictions
- Competitive XM fees with commission-free spreads as low as 0.8 pips
- A $5 minimum deposit requirement for the Ultra Low account and a $10,000 minimum deposit requirement for the Shares account
- 1:1000 maximum leverage with negative balance protection
- A well-balanced asset selection
- Algorithmic trading via MT4/MT5
- Trustworthy XM withdrawal system for verified clients
- Unlimited XM demo account
The Cons of the XM Islamic Account
- XM may revoke swap-free status
Bottom Line
XM offers Muslim traders a Sharia-compliant XM Islamic account in the Ultra Low and Shares accounts. Therefore, Muslim traders can engage in leveraged overnight trading without violating their faith. Unlike many brokers, XM does not replace swap rates with other fees or implement trading restrictions.
XM may monitor trading activity in Islamic accounts to ensure compliance with the terms and conditions and could revoke privileges. I appreciate the unlimited swap-free trading on qualifying assets in the XM Islamic account. The XM account types are the Standard account, the Ultra Low account, the Shares account, the demo account, and the XM Islamic account. Please note that the XM Islamic account is only available as an Ultra Low and Shares account. The XM Islamic account is a swap-free trading account for Muslim traders that allows leveraged overnight trading while complying with Sharia law. The XM Islamic account receives identical XM leverage to the Ultra Low account, which maxes out at 1:1000. Alternatively, the Shares account is available as an unleveraged long-term buy-and-hold XM trading account for equity traders. XM, founded in 2009, has an excellent regulatory track record, has stood the test of time, and caters to 15M+ traders from 190+ countries. Therefore, traders should feel safe opening an XM Islamic account.FAQs
What are the different types of accounts in XM?
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Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.