Please add the possibility for traders to apply for an interest free account.
Accounts without swaps is a feasible customer service by brokers of which the majority of liquidity remains in the B Book. (Market Makers).
For a pure agency broker as Darwinex, its prime broker bill the swaps, so this type of account has a real cost.
I personally am very angry if a broker offering accounts without swap to certain customers for religious grounds and refuse them to other customers. It’s totally unacceptable and discriminatory.
Anyway I know several practicing Muslim trader for which swaps are not an insurmountable problem.
So I do not support this proposal.
I have no problem with covering any extra cost that this kind of account type would generate for the broker , and I am willing to pay higher commissions.
Why would you not support this proposal ? It is not like I am asking the broker for free money , in fact I am voluntarily willing to miss out on extra earnings that I would gain with carry since I am a global macro position trader.
The only reason I am proposing this is because for me personally interest are not only religiously but also morally unacceptable considering their impact on our economic system and society in general.
And from darwinex perspective , even if they don’t increase commissions on swap free accounts their opportunity cost of missing out of a lot of clients is much greater anyway.
If Darwinex offers swap free account for all of its customers, with different pricing, it does not have a problem.
This is totally unacceptable and illegal in my opinion, is to offer preferential conditions for religious purposes by restricting access to those accounts.
I recently applied for an account without swap at XM which offers this possibility. My application was refused. So I was discriminated by what I’m Swiss with a Swiss name.
If Darwinex let himself be tempted by this kind of discrimination, I would wear a complaint with the FCA.
I don’t mind if everybody in the whole world can get to trade with higher commissions instead of paying/taking interest.
I am not trying to get any illegal advantage here and I don’t understand how you can be so personally offended and overreacting over this matter.
It is very simple to understand.
Swap free accounts are fine. I use them if offered by the broker. Who likes to pay fees?
What I do not accept, it if I am denied access to this account just because I’m probably not Muslim.
And as I mentioned, this has happened to me several times.
And yes, I confess that being discriminated by European brokers because I am not a Muslim bothers me a little.
I said that I have nothing against you, not against Muslims, but against brokers who discriminate discreetly most of their customers to provide benefits to others.
So if you’re not religiously or morally motivated to use a swap free account why did you apply for them in the first place?
With a normal account you can either gain swap or pay swap. With a swap free account you lose the ability to gain swap. So applying for a swap free account to gain any monetary advantages doesn’t make any sense at all.
Like I said in my first answer to you , I would benefit from an account with swap since I know how to capitalize on carry trading and my motivation to apply for a swap free account is genuine. I am not trying to avoid any fees , I would even pay higher fees.
I don’t think offering something to a specific customer group is discrimination against other customers , and it is not illegal. Especially since people with swap free accounts don’t gain any advantage through it , in fact everyone would benefit from Darwinex reaching a bigger number of customers. Darwinex , the traders and the investors.
As I said I would welcome it for the brokers to offer swap free accounts for everyone , since I support freedom for everyone. And my own freedom would be limited in the case Darwinex decides against my proposal since I would be forced to chose an other (most likely inferior) broker.
Let me give an hypothetical example on why it would be beneficial for every stakeholder if Darwinex offered swap free accounts :
Lets say there is a muslim trader from lets say India , he is very hard working and very skilled but doesn’t have a lot of capital. He takes his religion seriously and is only willing to trade with a broker that offers him a swap free account.Let’s assume Darwinex decided to offer swap free accounts. The trader makes exceptional returns on the Darwinex platform and many investors invest in his Darwin.
Darwinex wins (commissions and 5% share of his performance fee)
Investors win (their investment has good returns)
Indian trader wins (he got funded and can make a career out of his exceptional trading skills)
What happens to Darwinex traders that don’t have a swap free account ?
They don’t lose anything
To the contrary , they can invest in that indian trader themselves so they gained a possible investment for themselves.And if they don’t invest but only trade , then they got a more profitable broker. Which means that they will be offered better trading features in the future and their deposits are safer since their broker is more profitable than before.
As I said, I have nothing against that Darwinex creates a special account without swaps with a substantially higher commission to cover the costs of swaps.
But muslims make up 3.2% of the population of the EU. And these 3.2% only a small portion applies the Sharia.
So the potential for interested customers is very low.
The worlds total muslim population is 1.7 billion people , Darwinex doesn’t offer its brokerage services to citizens of USA , Japan and Iran. (Source Darwinex FAQ)
USA has a muslim population of 2.5 million , Japan of 185k and Iran of 75 million muslims. (Source Wikipedia)
1.7b - 2.5m - 185k - 75m
Darwinex is regulated to offer its services in the EU. So its reference market is Europe.
Although customers outside the EU are welcome.
Again, if indeed the demand for Sharia compliant accounts is massive enough, maybe Darwinex will respond to your request.
As the cost of these accounts is not supported by the other customers, I have no problem with that.
I have a question for you: do you think a practicing Muslim has the right to invest on Darwins ?
Yes I think so , there is nothing wrong with investing in Darwins as long as it’s swap free.
In general I think the Darwin investment model is a very transparent and fair investment system , since the interests of the broker the traders and the investors are aligned. The performance fee makes sure that the traders and investors interests are aligned. The better the trader the better the investment for the investors and therefore better fees for the trader himself. There are other social trading platforms where traders get paid on generated volume instead of performance , which in my opinion is a conflict of interest. The fact that Darwinex gets a 5% share of the traders performance fee also makes sure that the broker wants all traders to succeed.
These things make me confident that Darwins are a good and ethical investment for everyone.
Ok, so this is not just a problem on trader side, but also on the investors side, which does not simplify things.
You are not updated, this 5% were in force during the beta.
Now the entire performance fee of 20% goes to the trader.
Of curiosity I do some research on the issue of swaps in Islam.
The only thing certain is that the highest religious authorities are not unanimous to assimilate swaps to usury which is prohibited by the Koran.
So it is far from the prohibition against eating pork, for example.
So according to the findings of this or that religious authorities, there are no problems with the swaps.
Usury is indeed hateful and elsewhere and it is also punishable under the Swiss Criminal Code, for example.
But assimilate the payment of a rollover to usury, it makes no sense.
Thanks for bringing this suggestion over here! For the time being, we are focused on other parts of our offering and prefer to maintain types of account as simple as possible, that is, we’ll keep offering just one type of account for all customers. On the long term, we’ll be happy to consider this suggestion.
Shall we cut the hands of a provider whose strategy contain a martingale ?
No, but you can invest on a other strategy
ECN broker should has swap fee. But why swap fee in Darwinex seem too high? Ex: when I short EUR/USD swap fee is negative (another ECN broker, it is positive swap fee) ?
Darwinex resells LMAX liquidity with conditions similar to LMAX.
It is not a broker to buy and hold stocks or do carrytrading with currencies.
BTW swap to short eurusd is positive.