Our Avatrade Islamic Account Revealed:
- ✔️AvaTrade Overview
- ✔️What exactly is an Islamic Account?
- ✔️Why is interest discouraged or prohibited by Sharia law?
- What are the steps involved in opening an AvaTrade Islamic Account?
- What are AvaTrade’s spread costs on an Islamic Account?
- What other features does AvaTrade’s Islamic Account have?
- AvaTrade Pros and Cons
- AVATRADE AT A GLANCE
AvaTrade Overview
Founded in 2006 and well-regulated by several entities around the world, AvaTrade is one of the most popular forex brokers in the world. AvaTrade is award-winning and offers more than 1,250 financial instruments that can be traded through several flexible trading platforms.
AvaTrade caters for all types of traders despite their trading skills, experience, or different styles. The fees that AvaTrade charges are competitive, transparent, and low compared to that of other brokers. Traders can expect several trading opportunities, fast and reliable trade execution speeds, and flexible funding options.
AvaTrade offers educational tools and materials to all traders, advanced trading tools that help traders refine and improve their trading, and some of the best customer support that will help traders despite the queries, questions, or issues they may have.
AvaTrade has over 200,000 registered clients from countries around the world, with headquarters based in Dublin, Ireland. AvaTrade also has regional offices based in Italy, South Africa, Australia, China, Japan, France, and Spain.
What exactly is an Islamic Account?
An Islamic, or swap-free, trading account is allowed by Islamic Sharia law. These accounts are based on the Islamic principle where interest is not applied to positions that are held open for longer than a trading day after the trading day has concluded.
Islamic Accounts are provided by brokers who serve Middle Eastern clients along with clients from other jurisdictions and offers certain features that are in line with the Sharia law, which prohibits the accrual of interest on funds deposited into the account.
The other important feature of an Islamic Account is that transactions must be settled immediately, requiring that currencies be transferred from one account to the other right after the transaction has been completed and therefore paid for in full.
Two key elements of the Islamic law relate specifically to trading accounts, these elements are:
- Riba, and
- Gharar
Riba is the prohibition of generating money from money, which in this case specifically refers to an interest, which is not allowed according to Sharia law. This type of interest is seen as both unjust and exploitive gains on trade or business.
Why is interest discouraged or prohibited by Sharia law?
Due to the restrictions and certain prohibitions placed on Muslim traders when considering the intricate details involved with trading activities, the following is affected greatly:
- Overnight rollovers – which involve the incurrence or receiving of swap points on positions that are held open for longer after the trading day has concluded at the New York close at 5 PM EST which is prohibited by the Sharia law.
- Margin deposits and interest – which involves the accrual of interest on funds that are deposited into the trading account, which is prohibited.
- Loans – when followers of the Sharia law have funds transferred by either a bank or other financial institution and it involves interest terms, this is prohibited by the Sharia law as per the key element, Riba.
- Margin trading – stocks that are traded on margin result in the trader being liable for paying interest, which amounts to Riba, as money is borrowed from the broker to buy or sell such equities, and which is prohibited by the Sharia law.
- Short sales – which affects mostly shares and involves borrowing and subsequent sale of an asset, which is prohibited.
- Forward sales – which affects forward contracts as well as the trading of futures contracts which involves the buying and selling of contracts at a future date according to a price agreed upon on the day of entering such a contract.
What are the steps involved in opening an AvaTrade Islamic Account?
To convert a Retail Trading Account into that of an Islamic Account, traders must first register for the live trading account. To verify their account, traders must provide proof of their identity as well as their residential address.
Once completed, traders can fund their accounts with the minimum amount and contact AvaTrade customer support to have their accounts converted. The request for conversion is sent to the relevant department who will review and approve the request, taking between 1 to 2 business days to process.
What is AvaTrade’s spread costs on an Islamic Account?
The spread cost on AvaTrade’s Islamic account will depend on the financial instrument that is being traded. The Islamic Account offered by AvaTrade does not offer special spreads but offers it in line with that on the Retail Account. The average spreads that traders can expect are:
- Forex – fixed spreads of 0.9 pips on EUR/USD
- Stocks – fixed spreads from 0.13%
- Commodities – fixed spreads from 0.5% on Gold
- Indices – fixed spreads from 0.50% on US_500
- FX Options – fixed spreads of 0.9 pips on EUR/USD
- ETFs – fixed spreads from 0.13%
- Bonds and Treasuries – fixed spreads of 0.03 pips Over Market for Euro Bonds and 0.06 Over Market for Japan Government Bonds
- Cryptocurrencies – From 0.25% Over Market on BTC/USD
What other features does AvaTrade’s Islamic Account have?
The features on the AvaTrade Islamic Account reflect that of the typical retail account, with the exemption that interest/swaps are not charged/credited. In addition to the typical features, Muslim traders are also granted access to:
- Halal Gold and Silver Trading
- Halal and Oil Trading on the MetaTrader 4 trading platform
- Halal Indices Trading
- Islamic Forex Trading
AvaTrade Pros and Cons
AVATRADE AT A GLANCE |
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| Broker's Name | AvaTrade |
| Headquartered | Dublin, Ireland |
| Year Founded | 2006 |
| Regulating Authorities | CBI, BVI FSC, ASIC, FSCA, FSA, FFAJ, ADGM FRSA, ISA, CySEC, IIROC, JFSA |
| Countries not accepted for trade | United States |
| Islamic Account (Swap Free) | Yes |
| Demo Account | Yes |
| Institutional Accounts | No |
| Managed Accounts | No |
| Maximum Leverage | 1:400 |
| Minimum Deposit | $100 |
| Deposit Options |
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| Withdrawal Options |
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| Platform Types |
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| OS Compatibility | Linux, Windows, macOS, Android, iOS, different web browsers |
| Tradable Assets |
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| Languages supported on Website | Multi-lingual including English, Portuguese, Italian, French, Spanish, Polish, Indonesian, and more. |
| Customer Support Languages | Multilingual |
| Customer Service Hours | 24/5 |
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FAQ
TRADING ENVIRONMENT
How many instruments can I trade with AvaTrade?
You can trade any of the following instruments:
- Forex
- Vanilla Options
- Commodities
- ETFs
- Stocks
- Indices
- Bonds
- Treasuries
- Commodities
- Cryptocurrencies
Which platforms are supported by AvaTrade?
AvaTrade offers the use of the following trading platforms:
- AvaTradeGO
- AvaOptions
- MetaTrader 4
- MetaTrader 5
- DupliTrade
- ZuluTrade
- AvaSocial
Does AvaTrade offer leverage?
Yes, AvaTrade offers leverage up to a maximum of 1:400. Leverage will depend on the trading account, financial instrument, and the region in which the trader resides.
What spreads can I expect with AvaTrade?
AvaTrade offers spreads that start from 0.9 pips EUR/USD.
Does AvaTrade charge commission?
No, AvaTrade offers commission-free trading because the broker’s fee is already included in the fixed spreads that are charged.
Are there additional charges on the Islamic account?
No, there are no additional charges indicated on the Islamic Account.
Is AvaTrade regulated and by whom?
Yes, AvaTrade is well-regulated by CBI, BVI FSC, ASIC, FSCA, FSA, FFAJ, ADGM FRSA, ISA, CySEC, IIROC, JFSA to offer trading services, products, and solutions to traders from around the world.
Is AvaTrade a recommended forex trading broker for experts and beginners?
Yes, AvaTrade is a recommended forex trading broker for all types of traders.
What is the overall rating out of 10 for AvaTrade?
9/10.
ACCOUNTS
What is the difference between a demo and a live trading account?
A demo account is a practice account that can be used by both beginner and professional traders. Beginners can use a demo account to practice their trading while more advanced traders can use it to test their trading strategies.
Alternatively, traders can also use a demo account to explore what a broker has to offer. Demo accounts are known for the risk-free environment that they offer along with the virtual funds which are used to trade.
Does AvaTrade offer a demo account?
Yes, AvaTrade offers a demo account.
How long is the demo account valid?
The demo account is valid for 21 days, after which it will expire.
Which live trading accounts does AvaTrade offer?
AvaTrade only offers a single Retail Account. This account can either be upgraded to a Professional Account or converted to an Islamic Account.
Does AvaTrade offer an Islamic Account?
Yes, AvaTrade offers the option for an Islamic Account.
What are the available deposit currencies for a live trading account?
- USD
- EUR
- GBP
- CHF
- AUD
DEPOSITS AND WITHDRAWALS
What is the minimum deposit required to open an account with AvaTrade?
$100.
How do you make a deposit and withdraw money with AvaTrade?
- Bank Wire Transfer
- Credit/Debit Card
- PayPal
- WebMoney
- Neteller
- Skrill
Does AvaTrade charge withdrawal fees?
No, AvaTrade does not charge withdrawal fees when traders remove funds from their trading account. However, the trader’s payment provider/financial institution may charge processing fees that AvaTrade cannot be held liable for.
How long does it take to make a withdrawal?
This will depend on the payment method that the trader uses. Some payments can be instant while others may take a few days.
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