FCA, CFTC, ASIC, FSC, BVI and IIROC
MetaTrader 4 (MT4)
MetaTrader 5 (MT5)
📈 Total Pairs
Our OANDA Islamic Account Revealed:
- ✔️What exactly is an Islamic Account?
- ✔️Why is interest discouraged or prohibited by Sharia law?
- ✔️What are the steps involved in opening an OANDA Islamic Account?
- What is OANDA’s spread costs on an Islamic Account?
- What other features does OANDA’s Islamic Account have?
- OANDA Pros and Cons
- OANDA AT A GLANCE
OANDA was established in 1996 and during the past 25 years, the broker and platform have become a leader in the industry, providing a wide range of tradable markets to countless traders from around the world.
OANDA offers unique and comprehensive solutions to both beginners and professional traders through flexible account types over powerful, innovative trading platforms. OANDA offers some of the best and most competitive trading conditions that are tailor-made to suit the needs and objectives of most traders.
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
Riba is the prohibition of generating money from money, which in this case specifically refers to interest, which is not allowed according to Sharia law. This type of interest is seen as both unjust and exploitive gains of 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 OANDA Islamic Account?
To register for a Swap-free account, traders must complete the registration for a Standard Account.
Once traders have completed the registration, they can contact OANDA’s customer support to request for an account conversion, with approval subject to OANDA’s discretion.
What is OANDA’s spread costs on an Islamic Account?
The spread cost on the Swap-free account starts from 1.6 pips EUR/USD.
What other features does OANDA’s Islamic Account have?
The Swap-free account that OANDA provides to traders has the following unique features:
- Variable spreads from 1.6 pips EUR/USD
- Commission-free trading
- Leverage from 1:200 on Forex Majors
- Micro-lot trading from 0.01 lots
- Access to 26 tradable instruments spread across several asset classes
- A stop-out level of 50%
- The ability to use one-click trading
- The ability to use any trading strategies
- A base account currency in USD
- Maximum trade size of 10 million
Traders need to note that the Swap-free account that OANDA provides does not only cater for those who follow the Islamic faith but for all traders, subject to OANDA’s discretion when traders apply for account conversion.
The Swap-free account exempts traders from earning/paying overnight fees and interest, but it also means that traders are subject to wider spreads to offset the absence of these fees.
In addition to this, on the Swap-free account, traders are only offered 26 tradable instruments as opposed to having access to the full range of markets on the Standard and Core Accounts. While the Swap-free account caters for all traders, it is considered a Sharia-compliant option for Muslim traders who want to use OANDA while remaining compliant with their beliefs.
Traders who use the Swap-free account must note that there are administration fees applied when positions are held open for longer than 5 consecutive days. Once the position is held open for longer than 5 days, an administration fee is charged from the sixth day until the position is closed.
This administration fee ranges from $4 to $7 and it is calculated according to the instrument and per lot traded, except for the Japan 225 index, which is charged per 100 lots that are traded.
OANDA AT A GLANCE
|Regulating Authorities||CFTC, NFA, IIROC, FCA, MAS, ASIC, FFAJ|
|Countries not accepted for trade||Korea, India, Pakistan, Iran, New Zealand, Cambodia, and numerous other countries|
|Islamic Account (Swap Free)||Yes|
|OS Compatibility||Linux, macOS, Windows, Android, iOS, web browsers|
|Languages supported on Website||English, Chinese (Traditional), Spanish, Portuguese|
|Customer Support Languages||Multilingual|
|Customer Service Hours||24/5|
You might also like: OANDA Account Types
You might also like: OANDA Demo Account
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You might also like: OANDA Minimum Deposit
FCA, CFTC, ASIC, FSC, BVI and IIROC
MetaTrader 4 (MT4)
MetaTrader 5 (MT5)
📈 Total Pairs
How many instruments can I trade with OANDA?
You can trade any of the following instruments:
Which platforms are supported by OANDA?
OANDA supports the use of:
- MetaTrader 4
- MetaTrader 5
- OANDA Trading Platform
Does OANDA offer leverage?
Yes, OANDA offers leverage up to 1:200.
What spreads can I expect with OANDA?
You can expect spreads from 0.2 pips EUR/USD on the Core Account.
Does OANDA charge commission?
Yes, OANDA charges a commission of $40 per million traded on the Core Account.
Are there additional charges on the Islamic account?
Yes, there are additional charges applied to the Islamic Account when traders hold their position for longer than five calendar days. When this happens, traders are subject to an administration fee charged per lot traded ranging from as low as $4 up to $7. Traders must note that the Japan 225 Index is charged per 100 lots traded.
Is OANDA regulated and by whom?
Yes, OANDA is regulated by CFTC, NFA, IIROC, FCA, MAS, ASIC, FFAJ, BVI.
Is OANDA a recommended forex trading broker for experts and beginners?
Yes, OANDA is recommended for use by beginners as well as experts.
What is the overall rating out of 10 for OANDA?
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 OANDA offer a demo account?
Yes, OANDA offers a demo account.
How long is the demo account valid?
The demo account can be used for an unlimited period but will expire if left dormant for 30 days.
Which live trading accounts does OANDA offer?
OANDA offers a Standard and Core Account, with the ability to convert the Standard Account into a Swap-Free Account.
Does OANDA offer an Islamic Account?
OANDA offers a swap-free account that can be used by Muslim traders.
What are the available deposit currencies for a live trading account?
DEPOSITS AND WITHDRAWALS
What is the minimum deposit required to open an account with OANDA?
OANDA does not have a set minimum deposit requirement.
How do you make a deposit and withdraw money with OANDA?
You can use any of the following:
- Debit Cards
- Credit Cards
- Bank Wire Transfer
Does OANDA charge withdrawal fees?
Some fees may apply when using certain payment methods.
How long does it take to make a withdrawal?
According to the official OANDA website, credit and debit card withdrawals can take between 2 to 3 business days.