Halal Binary Options

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Written By
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Written By
William Berg
William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.
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Edited By
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Edited By
Tobias Robinson
Tobias is a partner at DayTrading.com, director of a UK limited company and active trader. He has over 25 years of experience in the financial industry and contributed via CySec to the regulatory response to digital options and CFD trading in Europe. Toby’s expertise and dedication to financial education make him a trusted voice in the industry, including a BBC investigation into digital options.
Updated

Whether binary options are Halal or Haram is open to interpretation, however trading platforms are increasingly offering accounts that aim to comply with Islamic finance principles. This guide weighs both sides of the debate and evaluates the binary options brokers marketing Halal accounts.

This article is not a source of religious advice. Speak to a local religious leader for further guidance.

Best Halal Binary Options Brokers

Our tests show these are the top 1 brokers with Halal binary options accounts:

Click a broker for details
  1. 1
    World Forex
    100% Deposit Bonus

    $1
    0.01 Lots
    1:1000
    SVGFSA
    Forex, CFD Stocks, Metals, Energies, Cryptos, Digital Contracts
    MT4, MT5
    Wire Transfer, Debit Card, Credit Card, Visa, Mastercard, Google Wallet, Apple Pay, Perfect Money, Bitcoin Payments, Volet
    USD, EUR, RUB

Here is a summary of why we recommend these brokers:

  1. World Forex - World Forex offers binary options where you simply decide the stake, price direction and contract timeframe. The payouts are high at up to 100% on American contracts and 85% on European, which also offers a partial refund to traders who close contracts before expiry.

Halal Binary Options Comparison

Halal Binary Options Comparison
Broker Islamic Account Markets Regulator Minimum Deposit
World Forex logo
Forex, CFD Stocks, Metals, Energies, Cryptos, Digital Contracts SVGFSA $1

World Forex

"World Forex provides both highly leveraged CFDs and digital contracts, making this a good broker for clients who want flexible and rewarding ways to trade. The copy trading service will also appeal to newer traders."

Tobias Robinson, Reviewer

World Forex Quick Facts

Bonus Offer100% Deposit Bonus
Minimum Deposit$1
Payout %100%
Expiry Times1 minute - 7 days
Copy TradingYes
PlatformsMT4, MT5
InstrumentsForex, CFD Stocks, Metals, Energies, Cryptos, Digital Contracts
Account CurrenciesUSD, EUR, RUB

Pros

  • Low deposit of $1
  • STP/ECN technology
  • Several different account types with varied pricing structures

Cons

  • Weak regulation
  • No negative balance protection
  • Withdrawal fees apply

Are Binary Options Compatible With Islam?

These are the three core arguments on each side of the debate:

Haram

  • Interest: Binary options trades that charge or award any form of interest on overnight positions are potentially forbidden in line with Riba.
  • Gambling: Binary options trading, especially if no strategy is used, is arguably online betting, which is prohibited in line with Maisir.
  • Uncertainty: Binary options are primarily used to speculate on unpredictable short-term market fluctuations, while their ‘all-or-nothing’ nature makes them inherently risky and potentially prohibited in line with Gharar.

Halal

  • Approach: Binary options traders that have a clear strategy, for example, using technical analysis to discover opportunities, may approach the activity as investing rather than gambling.
  • Islamic account: Tailored binary options accounts that are designed to allow traders to avoid earning or being charged interest, may not fall foul of Riba.
  • Fixed risk: Unlike other trading instruments where losses can be unlimited, binaries have a fixed risk and reward profile, potentially reducing the level of uncertainty.

Ultimately, whether binary options trading is Halal or Haram will depend on who you ask and the trader in question.

That said, this is fairly clear: wild binary trades made with no clear plan or understanding of the financial markets are likely to be considered Haram.

How Halal Binary Options Accounts Work

With online trading rising in popularity, including amongst Muslim investors, we’ve seen a growing number of brokers introduce Islamic-friendly accounts. These are essentially swap-free accounts that are designed to completely remove Riba from trading.

Halal binary options accounts should meet three criteria:

  1. Immediate execution of trades: Muslim teachings state that hand-to-hand exchanges should be prompt
  2. Immediate settlement of transaction costs: This avoids open trades being rolled over to the next day
  3. Zero-interest: Charging or incurring interest on trades

If a broker’s Islamic account does not meet these conditions, your binary options trading activities may not be considered Halal.

Having spent years evaluating binary options trading platforms, there are several other relevant factors to consider:

Bottom Line

The issue of whether binary options trading is Halal or Haram will continue to be debated by scholars.

However, some feel that by trading binary options strategically, Muslims can avoid gambling. Also, several brokers now market halal binary options accounts to help traders stay within Shariah Law.

Ultimately, DayTrading.com is not a religious authority so we cannot say with certainty whether binary options trading is Halal or Haram. This will depend on your interpretation and individual approach to trading.

That’s also why we recommend consulting a local religious leader and reading the materials below.

Article Sources

The writing and editorial team at DayTrading.com use credible sources to support their work. These include government agencies, white papers, research institutes, and engagement with industry professionals. Content is written free from bias and is fact-checked where appropriate. Learn more about why you can trust DayTrading.com