With the same and unanimous rule of the law applying to both types of accounts, the only thing that differs in an Islamic Trading Account better known as a Swap-free account is that no swap or rollover interest. 

Any other type of interest is implied or levied upon overnight positions in such accounts which sits well with the financing laws of Sharia, simply because according to Islamic principles, for a trade to be termed as halal, they need to be executed immediately, the transaction costs have to be settled immediately with no room for future repayment, and no interest rates should be implied on any trade. 

Example of Swapping & Rollover Interest

In the explanations above, two new terms were discovered – swap and rollover interest: concepts without which the modern world trading in the market could lead to devastating and mind-boggling losses for both the lender as well as the receiver. 

Swapping essentially means keeping the position of your purchased stocks or active trades open even after the market has been closed for the day in order to sell them off just in case a person wishes to for what could be one out of a million possible reasons. 

Swing Traders & Overnight Holding Positions

Rollover Interest does mainly imply swing traders i.e. a trading style that is suited to holding positions for more than one day in the market. 

On the flip side, Day Traders or even traders that ‘Scalp’ the markets ensure they open and liquidate all their positions before the close of the day therefore they are not subject to Rollover Interest on their trading accounts. 

The interest levied for opening your account and consequently your stocks/Forex trades that are open for manipulation even once the market is closed is what we refer to as swap or rollover interest and since it is a type of interest in itself which acts as a hindrance in such financial transactions. 

Best Islamic Trading Accounts with No Swap and Zero Interest

This is why no swap or rollover interest is levied upon Islamic Trading Accounts in order to protect an individual’s beliefs and allow them for a passage to invest their money at the same time.

We have highlighted below both advantages as well as some demerits to an Islamic trader account when pitted against simple and standard CFD trading accounts. Let us identify some of them: