Derayah halal free margin trading account

[michaeladolf]

I am Saudi, and one of the local brokers listed a free margin trading account that explicitly mentions it's Sharia-compliant and I was wondering how this could be. Since it's labeled as Sharia-compliant I have assumed it's interest-free and they have also specified that there are monthly fees deducted when subscribed with their margin trading account. If you are knowledgeable on this topic please provide an answer to the best of your ability.

 

[princesst1]

@michaeladolf It depends on the stipulation. Paying a fee to receive benefits of a service is halaal. Paying a "fee" to receive benefits based on a percentage is not.

Again it's based on stipulations of the service agreement.

https://web.derayah.com/en/margin/

Based on this its haram because it not a service fee its a loan fee, essentially riba, essentially renting money.

If you paid a fee, monthly or annually, to join this website and one of benefits was margin then you are not paying a loan fee. You are paying a service fee, a fee to use the website with all its features.

What Derayah is doing is charging is a blantant margin loan fee. No different than any other brokerage.

 

[michaeladolf]

@princesst1 pretty scary that they consider their product sharia compliant when it does sound like interest, i guess my doubts were right afterall.

 

[sbmor777]

@michaeladolf Leverage/margin are typically not permissible. From what you've described, I don't see how it's sharia-compliant.

See this similar post.

https://www.reddit.com/r/IslamicFinance/comments/j95cij

 

[_youngboolingbhris_]

@michaeladolf I would advise to leave it. There have been some workings and publications in shariah compliant margin trading and it’s structured as taking a shariah compliant mortgage or loan. It’s worth identifying how they’ve structured it as it’s a really new “product”.

Personally, margin, leverage, cfds and options is impermissible based on the consensus.

It’s actually a good time right now as the scholars are looking into the workings of more shariah complaint products as the Islamic financial markets are growing exponentially