23 Jun Binary Option Haram or Halal? | Trusted Islamic Binary Option
Binary Option Haram or Halal? So you’re looking to trade Binary Option from Malaysia or another Muslim country, and have no idea if it it’s haram or halal? Well, look no further, our comprehensive article from Marketpotentials.com will seek to address just that.
With the easy access to various overseas based brokers and trading platforms using the Internet, as well as the use of various new trading instruments such as Binary Option and Cryptocurrencies that are now the new norm when it comes to trading – answering the question of Is Binary Options “Haram” or “Halal” is no longer as straight-forward as one would expect it to be.
In this comprehensive article we look at the implications of Sharia Law on Binary Option trading and answer whether it is “Halal” or “Haram” to take part in trading Binary Option. The development of online trading platforms in recent years has opened up new horizons for retail traders of all races and creed. With one quarter of the world’s population being Muslim, it is inevitable that more and more Muslim traders will join the online Islamic binary options trading scene.
In Islamic economic jurisprudence or Shariah law, charging “Riba” or interest is forbidden and is considered as a major sin. Many international brokers in sensing an opportunity that will be of importance to attracting Muslim traders have come up with the idea of “Halal”, or Islamic trading accounts.
We look at several of such approved Islamic Binary Option trading accounts available in this detailed article below.
What is Binary Option? | Binary Option Haram or Halal?
A binary option trade is a quick way to trade extremely simple financial instrument, that allows investors to speculate or predict whether the price of an asset will go up or down in the future. The asset or also known as ‘underlying asset’ which for example could be the stock price of Apple, the price of Bitcoin, the USD/CAD exchange rate, or the price of silver. The time span can be as little as 30 seconds, making it possible to place hundreds of binary option trades a day across any global market for even a trader who is brand new to binary option trading.
Before you place a binary option trade you also have the benefit of knowing exactly how much you stand to gain if your trade is correct. This is typically in the range of 70-95%. In other words, if you invest $100 you will receive a payout of $170 – $195 on a successful trade.
This in turn makes risk management and trading decisions a lot simpler. The outcome is always a “Yes” or “No” answer. You either win a trade or you lose the trade – hence the name “binary” option. The risk and reward for each binary option trade is also known well in advance with this type of trading.
Now that you understand the basic principles of binary option trading – let’s move on to answer the question of whether or not binary option is “haram” or “halal”
Binary Option Trading in Malaysia | Binary Option Haram or Halal?
Binary Option Trading in Malaysia is offered by a number of international brokers which are easily accessible using the Internet. However you should always keep in mind to only trade with a regulated, reputed and established binary option broker. This is critical to safeguard your funds and ensure that your trades are legitimate and more importantly that the binary option broker is sound financially, and there is no risk of losing your hard earned money.
In recent years a number of unscrupulous binary option brokers have appeared and thousands of new traders have lost their hard earned money when they folded or simply absconded with investors monies. As such we always recommend to stick to trading using a regulated binary option broker such as IQ Option. You can read more about the full review of IQ Option here.
Binary Option Trading and Shariah Law | Binary Option Haram or Halal?
When it concerns Binary Option Trading and whether or not it’s ‘halal’ or ‘haram’, it would be prudent to think about Shariah Law and Islam. The Arabic word “Shariah” in Islam is used to denote God’s divine law which every Muslim has to follow. It is derived from the main tenets of Islam specifically from the Quran and the Prophet Muhammad called the Hadith.
Together, Shariah Law’s principles dictate the way a Muslim (trader) should live his life. They permeate every aspect of a Muslim’s life and regulate the way he should behave in society, in business and with God
Islamic Binary Option Broker | Binary Option Haram or Halal?
Although there are numerous binary option brokers present today in Malaysia, Saudi Arabia and various other Muslim majority countries with the availability of trading online, there are not many brokers who are compliant with Shariah Law accordingly.
As such if you’re a Muslim trader, you’d be well informed to only trade with approved Binary Option brokers that incorporate Islamic principles into their trading account. One such broker is IQ Option. Not only is IQ Option currently one of the largest binary option brokers around the world, with over 200+ countries served, and 40+ million traders using the platform on a daily basis – they are also one of the first few brokers to incorporate Islamic principles into their trading accounts.
- Interest-free trading with IQ Option: no extra charges for opening, closing or holding your position (except leveraged CFDs).
- HIBAH option– you can donate a part of your profits to charitable organisations without any fees.
- Wide range of leverages to choose from with IQ Option.
- Free intuitive and easy to use online trading platform with IQ Option.
Binary Options Islamic Trading Account | Binary Option Haram or Halal?
As a substantial number of financial traders in Malaysia and beyond are Muslim, Forex and Binary Option have also started to offer Islamic trading accounts recently, or even adapted their offering to reflect Islamic principals to be compliant. These trading accounts (such as the one offered by IQ Option) are tailored specifically for Muslim traders and are interest free.
A Muslim trader trading with an Islamic IQ Option trading account will have access to all trading assets that other types of trading accounts will have. The only major difference being that no interest charged on overnight positions. In addition there are also no additional penalties or charges which Muslim traders will be subjected to with the Islamic trading accounts.
Typically, these Islamic trading accounts (such as the one offered by IQ Option) are characterised with the features below:
- Offers the ability to trade with all asset classes offered by the broker
- All open market positions are closed by 23:59:59
- Islamic Brokers operate based on the “Hiba” policy meaning the broker will “donate” as a charitable gesture to Muslim traders “loaning” the broker’s money to trade – hence no interest being charged or incurred.
- There are no additional hidden charges
- There are also no interest charged on overnight positions as a matter of principle
- No swap commission charged
- Shariah compliant trading account
- Transparent trading account
Hence the IQ Option Binary Option trading account offered is indeed “Halal” for Muslim traders to partake in to grow their wealth accordingly.
Conclusion | Binary Option Haram or Halal?
In conclusion Binary Option is “Halal” as long as the broker you choose to open your trading account and subsequently trade with offer an Islamic Trading Account that’s compatible such as IQ Option. Sticking to only reputed broker such as IQ Option, allows you as a trader to ensure that your funds are always safe, you have access to regulated instruments, and an easy to use Islamic trading platform.
Hence as a Muslim trader you could both always observe Islamic principles as well as seek to grow your wealth in no time at all with proven a proven Binary Option trading brokerage such as IQ Option.
To get started with your own Shariah Law compatible or “Halal” Binary Option trading account – simply click below to get started.