- Swap-free (Islamic) accounts eliminate all overnight interest charges, making forex trading Sharia-compliant
- Swaps are based on interest rate differentials between currencies and are tripled on Wednesdays to cover weekends
- XM offers Islamic accounts across standard account types — request conversion during registration or through the member area
- Swap-free and Islamic account are the same product, designed for compliance with Islamic finance principles
What is a Swap?#
In forex trading, a swap (also called an overnight fee, rollover, or financing fee) is the interest charged or credited when you hold a trading position open past the daily close (typically 17:00 New York time).
The swap is based on the interest rate differential between the two currencies in a pair. Different currencies have different central bank interest rates, and when you hold one currency overnight while being short another, you effectively earn the interest rate of the currency you hold and pay the interest rate of the currency you sold.
How swaps work in practice:
| Pair | Long Swap | Short Swap | Explanation |
|---|---|---|---|
| EUR/USD | -0.5 pip/night | +0.3 pip/night | USD rate > EUR rate |
| USD/JPY | +0.8 pip/night | -1.0 pip/night | USD rate > JPY rate |
| AUD/USD | +0.2 pip/night | -0.4 pip/night | AUD rate closer to USD |
Wednesday triple swap: On Wednesday evening, swaps are tripled to account for the weekend (Saturday and Sunday) when markets are closed but the calendar still rolls 3 days. This catches many new traders by surprise.
How Swap-Free Accounts Work#
A swap-free (Islamic) account eliminates the swap charge entirely on positions held overnight. Instead of earning or paying interest when you roll a position, nothing happens — the position continues to the next day without any interest transaction.
What changes on an Islamic account:
- ✅ No overnight swap/rollover charges
- ✅ No interest earned on positive-swap positions
- ✅ Same spreads as equivalent standard accounts
- ✅ Same leverage and margin requirements
- ✅ Same platforms (MT4/MT5) and instruments
- ⚠️ Some brokers charge an "administration fee" after a certain number of days
How administration fees work: Some brokers replace swaps with a flat daily administration fee after you hold a position for more than a set number of days (e.g., 3–10 days depending on the instrument and broker policy). This fee may or may not be considered riba by Islamic scholars — the nature of the fee (whether it depends on time or capital) determines its permissibility.
XM Islamic Account#
XM offers fully swap-free Islamic accounts available to all Muslim traders. Key features:
XM Islamic Account benefits:
- No swap on any position held overnight, regardless of instrument or duration
- Available on XM Standard, Micro, Zero, and Ultra Low accounts
- No widened spreads compared to standard accounts
- Full access to all XM instruments: 50+ forex pairs, gold, silver, oil, indices, and stock CFDs
- Available on MT4 and MT5
- Segregated client funds for security
- Access to XM educational resources and webinars
XM Islamic Account eligibility: Any client from an eligible country can request an Islamic account. You do not need to provide proof of Muslim faith — it is available by request.
| Feature | Standard Account | Islamic Account |
|---|---|---|
| Spreads | Standard | Same (no widening) |
| Swap | Yes (charged/credited) | No |
| Commission | Standard | Standard |
| Leverage | Standard | Standard |
| Instruments | All | All |
| Platforms | MT4/MT5 | MT4/MT5 |
Eligible Instruments#
XM's Islamic account covers swap-free trading on:
- All forex currency pairs (50+ pairs)
- Gold (XAU/USD) and Silver (XAG/USD)
- Oil CFDs (Crude, Brent)
- Stock index CFDs (SP500, DAX, etc.)
- Individual stock CFDs
- Cryptocurrency CFDs
How to Open an Islamic Account#
New registration:
- Go to XM.com and click "Register"
- Fill in your personal details
- On the account type selection screen, choose "Islamic Account"
- Complete verification (ID + proof of address)
- Your Islamic account will be activated
Converting an existing account:
- Log into your XM client portal
- Go to "My Accounts"
- Click on the account you want to convert
- Select "Convert to Islamic Account"
- XM support will process the conversion (usually within 24 hours)
Opening an Islamic account requires no extra documentation beyond standard KYC verification. It is free of charge and can be done entirely online in minutes.
