Abu Abdurrahman, Salam Aleykum,
I am just like you and I decided to investigate. Here is my investigation and it still ongoing. I hope it will help:
I also have been doing research and found that Forex is not permissible in Islam. But most of the Fatwas date 2 to 6 years ago. Things have changed lately as Forex brokers have been offering Islamic accounts that are supposed to be Riba-Free. These accounts are also called No-Riba accounts.
I would like to hear some Ulamas giving insight on these No-Riba accounts.
So far I haven't found anything, therefore I won't trade Forex until I see a clear green light from a trustworthy source.
Please note that a Forex broker that offers Islamic accounts CANNOT tell you that Forex is HALAL as there is a conflict of interest here. He is just trying to sell a product. Only a trustful, highly educated source in Islamic Jurisprudence can speak on this matter.
On the other hand, if Forex trading was Haram then why is that the six GCC countries poured $45 Billions in Forex trading in March 2009. See link here:
http://www.khaleejtimes.com/biz/insi...on=uaebusiness
Quote/ Trading in the greenback, Saudi nationals invested $22.5 billion (Dh82.8 billion) or 50 per cent of the total volume traded last month, followed by UAE investors who contributed $13.5 billion (Dh49.7 billion) or 30 per cent of the volumes traded in March. /End Quote
Shaykh `Abdul-`Azeez Bin Baz was asked the following question:
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The ruling on buying and selling Currencies
Question:
Is it permissible for the Muslim to buy dollars or other currencies at a cheap price and then, after the price goes up sell them?
Answer:
There is no harm in that if he buys the dollars or any other currency and keeps it with him. Then he sells them after that when the price goes up. There is no harm in that. However, he must buy them hand to hand (by paying up front) and not on credit to be paid later. He buys the dollars with Saudi riyals or Iraqi dinars (for example) hand to hand. Currency must be paid for up front just like buying gold with silver, hand to hand. And Allah is the One Who is sought for help.
Shaykh `Abdul-`Azeez Bin Baz
Fatawa Islamiyah Darussalam Vol:4 page no.415
http://fatwaislam.com/fis/index.cfm?scn=fd&ID=1039
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Yes you can buy a currency and later sell it for a profit. No problem with that as Shaykh Bin Baz explained. The big question our Shuyukh need to answer if if MARGIN TRADING IS HALAL. This is where Satan's venom is hidden.
I will try to explain where this RIBA is hidden:
When you trade on MARGIN, your Forex broker allows you to borrow 99% of the money. (Your deposit is $1,000 and you get $99,000 to buy a 100k lot). They won't charge you commissions or interest for that borrowing. They went even farther to the point if you hold your position overnight your rollover is ZERO. They also promise that they won't pay you interest for that too. As a Forex trader, you are not involved in Riba, hence the No-Riba accounts. But here is the bad news: When you borrow that $99,000, your broker gets it from a financial institution, most likely a bank, AND HE HAS TO PAY INTEREST ON ALL LOANS YOU ARE MAKING.Although you are not involved in Riba, Riba is made on your behalf.
The evidence of this is from Thomas Papantoniou, Account Manager of Tadawul FX. Here is what he said :
Quote/ The second downfall caused by Islamic Accounts is that some clients take advantage of the benefit of having no SWAPs to pay. They can do this by opening positions and leaving them open for very long periods of time, for which at some point their position will go into profit. This is unfair on the Forex Company as they are the ones that are left to PAY THE SWAPs CHARGED BY THE BANKS THEY WORK WITH. /End Quote
You can read the entire Thomas Papantoniou article here:
http://ezinearticles.com/?Islamic-Fo...nts&id=1587284
As you can see, Thomas Papantoniou from Tadawul FX clearly points that any Muslim holding his/her position overnight will cause TadawulFX to pay interest (RIBA) to the banks they work with.
And this is what is refraining me from trading Forex. I just refuse to be the source of someone else (in this case, my broker) to commit Riba on my behalf.
My investigation is still ongoing. I want to know why our brothers in the GCC, especially in Saudi Arabia are allowed to trade Forex. If this hidden Riba exists in their trading, then THEY ARE ALL UNDER WATER. Else, we all want to enjoy the same rights.
I will keep you posted insh'Allah.
Salam Aleykum