Swap free accounts, or Islamic accounts: all a novice needs to know
If I'm trading at Forex, shall I pay taxes or any other commissions?
As a Forex trader, you must have questioned whether or not your Forex profits shall be taxed. Unfortunately or fortunately, there are no strict guidelines available. According to the law, citizens shall indeed pay taxes on their income. That's a question of personal responsibility. If you think about whether you shall pay taxes on your Forex profits, consult the Tax Administration - they will explain everything to you. If you don't ask anything, they won't provide any explanations. However, a trader may have other accounts to settle.
Spot, swap or swap-free?
Intraday trading implies the so-called "spot" trades. If a trade hasn't been closed before midnight, it becomes automatically a swap trade. To make this operation possible, a trader pays a commission to a broker. But there also exist special Islamic accounts, also called "swap free" accounts. It means, you still can enjoy all the advantages of your trading account but you don't pay any commissions for rolling your position over to the next day.
Muslims' holy book, Quran, says that any operations associated with receiving a commission are strictly forbidden in Islam. Swap trades with a broker's commission belong to this kind of operations too. That's why swap free accounts are also called "Islamic" accounts. Swap free accounts were originally intended for Muslims to allow them to trade without breaking their religious canons. These days, those accounts are available to everyone.
Commission-free accounts are a service you won't find in any brokerage company. As a rule, only long established experienced brokers can afford the service. So, don't get surprised if your broker cannot provide you with swap free accounts. Just look for them somewhere else.