Islamic Account

Islamic

One of the primary challenges for Muslim traders entering the Forex market is the issue of “overnight interest,” or Swap, which conflicts with Sharia principles. Due to this religious barrier, many traders were previously excluded from participating in global markets.
The LiteFinance Islamic Account is a technical and legal solution designed to bridge this gap. In this section, rather than taking a promotional approach, we provide an expert analysis of what a Swap-Free account truly is, how to activate it at LiteFinance, and the potential rules or hidden costs involved.

Leverage

Depends on Account

Min Deposit

related to account

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Free Swap ECN Account Details

Spread

Floating from 0 pips

Commission

Yes

Order Execution Type

Market Execution

Social Trading

Available

Min Deposit

50$

Trading Platforms

MT4/MT5/LiteFinance/cTrader

Fully Segregated Accounts

Available

Account Base Currency

USD, EUR

Max Order

300 Suggested Deposit

5000$

Leverage

1:1000

Minimum Trade Volume

0.01 Maximum Trade Volume

100 Margin Call

100%

Stop Out

20%

What is an Islamic Account?

An Islamic Account, also commonly referred to as a “Swap-free” account, is a trading account type where no overnight interest (Swap) is charged or paid for positions held open for more than 24 hours. These accounts are designed to be fully compliant with Sharia law, allowing Muslim traders to participate in the market without concerns regarding Riba (interest).

In essence, the structure of this account remains identical to standard accounts in terms of spreads and execution speed; the sole distinction lies in the removal of the interest mechanism for long-term trades.

کمیسیون های اکانت ECN

Group Of Asset

LiteFinance

MT4/MT5

cTrader

Forex Major Pairs

$5

Forex Cross Rates

$5

Forex Minor Pairs

$6

Natural Gas

$5

Precious Metals

$5

Agricultural Commodities

$2

Stock

0.1%

Index

$3.5

Cryptocurrencies

0.12%

Oil

$0.5

The Purpose of the LiteFinance Islamic Account

The Forex market is a 24-hour global market; however, the banking system performs settlements at the end of each business day (00:00 server time). This settlement includes calculating the interest rate differential between the two currencies in a pair.

Since receiving or paying fixed interest is prohibited in Islam, LiteFinance established the Islamic account option to provide trading opportunities for the large Muslim community and to attract investors in this sector.

What is Overnight Swap?

Swap, or overnight interest, is an amount added to or deducted from your account if a trading position remains open after the broker’s server business day ends (Rollover).

This amount is calculated based on the interest rate differential between the two countries whose currencies you are trading. If the interest rate of the currency you bought is higher than the one you sold, you receive a positive swap; otherwise, you must pay a negative swap. An Islamic account eliminates this process entirely.

Advantages of the LiteFinance Islamic Account

Utilizing a LiteFinance Swap-Free account offers distinct benefits:

Sharia Compliance: The most significant advantage for Muslims is ensuring trades are Halal by eliminating Riba.
Cost Reduction in Long-term Trades (Swing Trading): If your strategy involves holding positions for days or weeks, a negative swap in a standard account could erode a large portion of your profit. This cost is removed in an Islamic account.
Calculation Transparency: You no longer need to worry about complex overnight interest rates, especially on Wednesdays when the triple swap is applied.

Opening a LiteFinance Islamic Account

An important technical note: in LiteFinance, the “Islamic Account” is not a separate account type like ECN or Classic. Instead, it is an “Option” that you can activate on your existing trading accounts.

Therefore, the first step is to open a standard trading account.

How to Activate a Swap-Free Status

To enable the Swap-Free feature on your LiteFinance account, follow these steps:

Log in to your Client Cabinet.
Navigate to the Profile section and open the Verification tab.
Locate and submit the request for Islamic (Swap-Free) Status.

Note: Depending on your jurisdiction and the regulatory framework of your region, the compliance department may require a brief review before activation. Once approved, the status is applied to all eligible trading accounts within your profile.

Technical Regulations and Storage Fees

It is important to understand that “Swap-Free” does not imply a total absence of holding costs. Brokers incur liquidity expenses for maintaining positions overnight.

The Grace Period: At LiteFinance, positions remain interest-free for a specific duration (typically between 5 to 14 days, depending on the asset).
Storage Fee: If a position is held beyond this grace period, a fixed Storage Fee may be applied. This is a transparent service fee and is not based on interest rate differentials.

Is an Islamic Account Right for Your Strategy?

The answer depends on your trading style:

Scalpers and Day Traders: Since positions are closed before the end of the day, an Islamic account is not technically necessary as no swaps would be applied anyway.
Swing Traders: For those holding positions for several days, an Islamic account is highly beneficial for reducing costs.
Muslim Traders: Utilizing this account is essential for adhering to Sharia principles.

Technical Comparison of Islamic vs. Standard Accounts

The following table illustrates how the cost structure changes when activating the Islamic feature:

Feature	Standard Account (With Swap)	Islamic Account (Swap-Free)
Spread	Unchanged (Floating)	Unchanged (Floating)
Trading Commission	Based on account type (e.g., ECN)	Based on account type (Unchanged)
Overnight Interest (Swap)	Applicable (Positive/Negative)	None ($0)
Storage Fee	None	May apply (After the grace period)

Conclusion

The LiteFinance Islamic account is an essential tool for Muslim traders to operate in the Forex market without religious concerns. It is also an attractive option for long-term traders looking to avoid negative swap costs. However, remain mindful that these accounts may involve a fixed “Storage Fee” after a certain period. It is not a license to hold positions for free indefinitely.

FAQ

Can the Islamic status be activated on all account types?

Yes, the Islamic status can be activated on all LiteFinance account types, including ECN, Classic, and Cent. You may select the account that best fits your strategy and subsequently submit a request for the Swap-free feature.

What is the procedure for activating an Islamic account?

To initiate this, you must first complete the registration and identity verification process in your Client Cabinet. Then, navigate to the “Profile” section, locate the “Islamic Account” option under the “Verification” tab, and submit your request. Once approved, Swap-free status will be applied to your accounts.

What is the underlying purpose of the LiteFinance Islamic account?

The primary objective of this account is to enable trading for Muslim investors who, under Sharia law, consider the receipt or payment of interest prohibited. By eliminating overnight interest, LiteFinance has created an environment where these individuals can operate in the Forex market with peace of mind, in full accordance with their religious principles.

What is a Swap or overnight interest?

Overnight interest, or Swap, is a fee calculated for holding a trade open for more than one business day (past 00:00 server time). This amount is determined based on the interest rate differential between the central banks of the currencies being traded. In Islamic accounts, this rate is eliminated and set to zero.

Are there any extra fees for using an Islamic account?

No, converting an account to Islamic status at LiteFinance is entirely free of charge. No additional commissions or hidden fees are applied for eliminating the swap. Spreads and trading conditions remain identical to standard accounts; the only difference is the removal of overnight interest.

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