at-Talib: ‘Forex Trading Business’ – Fatwa on a Business Transaction

I am interested in the Forex SPOT trading business and would like to know if it is halal. The trading that I will be doing will be as follows:

Let’s say, I invest $1,000, the broker invests or lends $99,000 and together we buy the currency like euro worth $100,000. The broker will not charge any interest on the money that he invested or lend, because it will be a Shariah compliant account.

- If the rate of the euro goes up and I decide to sell the euro. The broker will take a small share of the profit and rest is given to me

- If the rate of the euro goes down below a certain margin which is determined by the amount I invest, my broker will close the trade and take his money back and I will lose the money I invested.

Also, another place [where] interest may be involved is when the buying and selling is not done on the same day, then a rollover occurs which mean that either we have to pay interest or give interest on the currency you have bought, but the brokers is offering a swap free or interest free accounts for Muslims only, in which, even if you do not close the trade on the same day, they will not debit or credit any interest.

via at-Talib: ‘Forex Trading Business’ – Fatwa on a Business Transaction.

~ by yahyasheikho786 on December 19, 2009.