Trading style
Is margin trading halal?
Read our methodology and editorial policy.
Summary
Conventional margin trading is impermissible. The broker is lending money to the trader and charging interest on the loan — riba in plain form.
The reasoning
Margin accounts in mainstream brokerages explicitly charge interest on the borrowed balance, calculated daily and disclosed in the account agreement.
Even if the trader closes positions same-day to avoid interest, opening the account requires consenting to a riba-based credit facility, which scholars caution against.
An Islamic swap-free account that offers leverage without interest charges may be permissible — see the fatwa on leverage for the disputed nuances.
Scholar citations
"Impermissible when interest is charged on the borrowed balance"
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