Islamic Trading: An Insight into XM’s Shariah-Compliant Trading Accounts

In the financial landscape, XM presents a unique opportunity for investors who adhere to the tenets of the Islamic faith. XM offers 100% Shariah law compliant trading accounts designed to meet the needs of Muslim investors.

The broker firmly opposes the concept of “swap-free” services in disguise, and has established a clear set of conditions to protect investors’ interests. These guarantees include:

• No interest or swap charges on overnight positions
• No spread widening
• No up-front commissions
• The ability to hold positions with no time limit
• No re-quotes or hidden costs

Furthermore, trading conditions such as leverage, commission, and execution models for these Islamic Swap-free accounts are equivalent to normal accounts. The sole distinction between a regular account and an Islamic Swap-free account lies in the “Swap” factor.

To open an Islamic Swap-Free trading account with XM, follow these simple steps:

1. Sign up and open a live account
2. Verify your account with documents
3. Request for “Swap Free Status” via XM’s client portal
4. Visit the XM Official Website for more information.

Go to XM’s Official Website

Forex Swap Fees Demystified: The Integral Cost of Trading

Forex swap fees are often overlooked and misunderstood, making them one of the least considered costs in trading. Although swaps are not hidden costs, their impact can come as a surprise, particularly to traders new to forex who are unfamiliar with what swaps entail.

While forex swap fees generally remain small and can sometimes work to your benefit, it is essential to understand their intricacies. This article aims to dispel any confusion around Forex swap fees and provide insights into how they affect your trading.

Open a Swap-Free Account with XM

Understanding Forex Swap Fees

A Forex swap fee is a charge applied to your open trades for holding a position in the market overnight. Essentially, when you roll a position over to the next trading day, you will either earn or pay a swap, and these swaps will continue to accrue on your open positions until the trade is closed. The close of the trading day is considered to be at the end of the New York business day, or 22:00 GMT (London time).

Forex swap fees are based on the interest rates set by the central bank for the respective currency, and these rates are subject to change depending on the bank’s fiscal policy, the economic environment, and the bank’s goals.

Go to XM’s Official Website

Forex Swap Fee Examples

Each currency has its own interest rate, and since two currencies are involved in any Forex transaction, two interest rates are part of the swap calculation. If the interest rate of the currency sold is lower than the interest rate of the currency bought, you might earn the swap, as the interest rate differential between the two currencies yields a positive outcome. Conversely, if the currency bought has a lower interest rate than the currency sold, the swap fee will be negative, and you would have to pay the difference for as long as the trade remains open.

Sign up on XM

The Impact of Swaps on Your Trades

Forex swap fees, in addition to spreads and commissions, impact the unrealized profit or loss of your trade. Swaps only accrue and are either added to or deducted from the net profit or loss of the trade while it is open.

Open a Swap-Free Account with XM

Forex Swap Fee Rates

Forex swap rates are readily available on broker platforms like MT4 & MT5. Understanding these rates is crucial to informed trading decisions. It is also worth noting that on specific days, swap fees are higher to account for weekends.

Go to XM’s Official Website

Leveraging Forex Swap Fees

Forex swap fees can also serve as potential benefits. By understanding the interest rate differential between two currencies, you can position yourself to earn the swap instead of paying it.

Sign up on XM

Conclusion

Forex trading involves numerous fees, including swaps, which are an integral part of the Forex and financial markets. Therefore, understanding them is critical. While swaps can often be a source of confusion for many traders, they are simply fees paid on the financing currency on the trades you make. The longer you hold a position, the more it could cost in terms of swap. However, with a deep understanding of how they work and how to avoid paying them, swaps can also be of benefit. This article has explained swaps in detail, their calculations, and how they affect your open trades.