Does Islam approves Forex trading
Muslims have the problem whether Forex is approved in Islam or not, actually, it cannot be said with a one-word answer because the Islamic scholars are still arguing on the topic still, as long as Forex trading does not include the interest you can trade the market. The real scenario behind the Islamic trading is it is approved if the currencies are dealt in hand to hand methods, which means free or riba (interest). The decisions concerning the trades must be done on the exact day of the trade, it should not be delayed.
Is Forex halal or haram
Actually, usury is completely haram (prohibited) in Islam due to the interest involved. The Forex market is haram if ONLY involves interest. There are many views on option trading, future trading, margin trading and also online trading. The majority of the scholars say that the Islam allows only spot trading since it does not involve any kinds of charges (riba) while they say that future trading and option trading involves riba. Forex is not haram if you are complying with the sharia laws which say anything you earn without trying hard (such as interest) cannot be considered as your hard earned money. So the conclusion is that the money you earn in the Forex market should be interest-free if so considered trading as Halal.
Forex Islamic banking
The spot transaction, forward transaction, options transaction, futures contracts, swap contracts, and currency exchange are done by the banks. The common argument is that there is an interest amount involved with these contracts but also, it is considered as the up-front cost. As for Islamic banks, they obtain financial benefit from the contract rate. The rate may differ from banks to the bank which means through it bank gains the profit. According to Islamic law, the transaction should be biased; both the parties should be benefited.
The Forex swap account
The Islamic banks introduced the swap accounts in order to meet the requirements of the Muslims. The scholars say that as long as the accounts adhere to the sharia law the Muslims can carry out transactions. The Islamic law has imposed certain guidelines to the swap accounts purpose as to hedge or speculates. The structure of Islamic account is that it is done by the promise and undertaking basis. In the modern world, everything involves interest so it is a must for the Muslims to be aware of the background. As long as the Forex market adheres to the sharia law the Muslims will be able to remain in the market.
Summary: Muslims cannot do the transaction without the equal burden to the two parties, a Muslim cannot involve in interest based transaction because it may burden one party. The swap accounts which are specially designed for Muslims are interest-free so the Muslims also can take part in the Forex market. As Muslims, you can make a living by the Forex market but makes sure to adhere to sharia law. If you are abiding by the law of Islam then you can become the professional Islamic trader as others.