cTrader Swap Free Accounts

What are cTrader Swap Free Accounts?

If you are looking for a cTrader Swap Free cTrader forex trading account then you most likely already know what they are. For the readers who don’t, we will give a quick introduction. You may have seen Swap Free accounts advertised on your broker’s website and wondered what they are. They are an account type offered by most forex brokers, however, they are not normally available to everyone. They are designed specifically for Islamic investors. The Sharia Law prohibits Muslims from paying interest. Swaps are derived from interest rates and this is why brokers offer this account type to Islamic traders. 

Don’t forget, you can check out the definition of Swaps and other keywords referenced in this article in our recently launched Glossary.

How to Get a Swap Free cTrader Account

Most brokers offering cTrader are very well established and have a global presence. This means they will be equipped to offer Swap Free accounts that meet the requirements of Islamic finance. When you sign up, you should be able to indicate your need for a Swap Free account in the registration form. Alternatively just contact your broker before registering to tell them that you need one. Sometimes brokers will ask for proof of faith before providing you with a Swap Free account. The reason for this is because while brokers will not charge Swaps to Islamic investors, the broker will still carry the cost themselves. Because of this, brokers will want to check that the requirement is genuine to prevent fraudulent requests. Some traders have deceived brokers in the past because it’s preferential to their trading strategy to not pay Swaps.

How do Swap Free Account Work in cTrader

When trading with a cTrader Swap Free account, they come with certain conditions attached. Instead of paying Swaps, which are derived from interest rates and vary on a daily basis, brokers will charge a fixed fee from time to time to cover those costs. This is called an Admin Fee. It’s a commission that is charged based on the size of the position. The amount is the same for both long and short positions. The Admin Fee is charged after a grace period, then it’s charged at certain intervals. Brokers choose the fee, the Grace Period and the interval. As the fee is the same all the time, sometimes the broker will make money and sometimes they will lose. The idea is that over time this covers or contributes towards the cost they incur. The other reason for Admin Fees to be in place is to discourage traders from keeping positions open for too long. As the longer a position is kept open, the more Swap charges the broker will accumulate. It also prevents traders from abusing the system.

Swap Free Account
Selecting a Swap Free Account in cTrader.

When you make an account for yourself in cTrader, you can see the checkbox which says “Shariah-Compliant (Swap Free)”. When you tick this, your account will be created as Swap Free. When you are inside cTrader you will probably notice a percentage symbol with a horizontal line striking through it. This indicates that your account is Swap Free. Inside the Symbol Information window and inside the Active Symbol Panel there will be details about the Admin Fee and the frequency it is charged. When an admin fee is charged, it will be deducted from your trading account balance and clearly shown in the transactions.

Swap Free cTrader Account
A cTrader Account Marked as Swap Free

Which cTrader Brokers offer Swap Free Accounts

As mentioned before, most brokers offer a specific account type for Islamic traders. Pepperstone offers a Swap Free account and they charge an Admin fee for any positions that have been kept open for longer than two days. IC Markets offer Islamic Accounts, they charge what they call Overnight Financing Charges every day. Some brokers may offer this account type but may not promote it, therefore you should contact them to see if they offer it or not. As this is an extra cost to your trading, you should compare brokers carefully to make sure you are getting the best deal.

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