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Swap Free Accounts | What You Need to Know
BY TIO Staff
|Juni 27, 2024In the competitive world of forex trading, finding the right type of account can make a significant difference in your trading. One such account that has gained popularity, particularly among traders who follow Islamic finance, is the swap free account. Also known as an Islamic account, this type of account eliminates swap or rollover interest on overnight positions. However, TIOmarkets CY Ltd has extended this to all traders, on all account types, for some instruments.
But what exactly is a swap free account, and how does it benefit traders? This article will delve into the intricacies of swap free accounts, their advantages, and how they can be a game-changer for you.
So keep reading to find out if a swap free account could be the perfect fit for your trading strategy!
What is a Swap Free Account?
A swap free account, also known as an Islamic account, is a type of forex trading account that eliminates the swap or rollover interest charges typically applied to overnight positions. In a regular forex trading account, when a position is held overnight (22:00 GMT), the trader is either credited or debited with a swap fee, depending on the interest rate differential between the two currencies involved in the trade.
However, in a swap free account, this swap fee is eliminated, making it compliant with Islamic finance principles and particularly beneficial for swing and position traders.
Key features that differentiate swap free accounts from regular forex trading accounts include:
- No swap or rollover interest charges on overnight positions
- Compliance with Islamic finance principles
- Potential cost savings for traders who hold positions for extended periods
Swap free accounts are typically used by Muslim traders who adhere to Sharia law, as well as traders who prefer to avoid interest-based transactions according to their trading strategy. These accounts allow them to participate in the forex market and with greater flexibility.
Benefits of Using a Swap Free Account
One of the primary advantages of using a swap free account is to eliminate the need to pay or receive overnight swap fees, which are essentially interest charges. These charges can add up quickly, especially for traders who employ long-term strategies or hold positions for extended periods of time. By eliminating swap fees, traders can potentially save a significant amount of money, which can be reinvested into their trading strategies or used to offset other trading costs.
Long-term traders, in particular, can benefit greatly from using a swap free account. Since they tend to hold positions for longer durations, the compounding effect of swap fees can be substantial. By eliminating these fees, long-term traders can potentially increase their overall profitability and reduce the drag on their trading performance. However, it works both ways and depending on the symbols traded and the direction of the trade, long or short, no swaps will be earned either.
Furthermore, swap free accounts can enhance trading opportunities for specific strategies. Certain trading approaches, such as scalping or day trading, may not be significantly impacted by swap fees due to the short-term nature of the trades. However, for strategies that involve hedging or holding positions overnight or for extended periods of time, a swap free account can provide a distinct advantage by eliminating some of the associated interest charges.
How Swap Free Accounts Work
Swap free accounts operate slightly differently than other forex accounts when it comes to handling overnight swap fees.
It's important to note that the terms and conditions for swap free accounts can vary between brokers. Some may impose certain restrictions, such as limiting the maximum duration for holding positions or impose other fees to absorb the swap fees they are still required to pay on the traders behalf. Additionally, brokers may reserve the right to revoke the swap free status of an account if they suspect abuse. So traders should carefully review the specific terms and conditions before opening the account.
At TIOmarkets, you can trade swap free on selected instruments on our Standard, VIP and VIP black trading accounts. No restrictions are imposed on the duration for holding positions and no other additional fees are involved.
What Symbols Are Swap Free With TIOmarkets
When you open a trading account with TIOmarkets, some Forex currency pairs and precious metals are swap free. When you open a position on any of these Symbols, you will not incur or earn any swaps for holding positions overnight.
| FOREX | Metals |
| AUDCADv | XAGUSDv |
| AUDCHFv | XAUUSDv |
| AUDJPYv | XAUEURv |
| AUDNZDv | XPTUSDv |
| AUDUSDv | |
| CADCHFv | |
| CADJPYv | |
| CHFJPYv | |
| EURAUDv | |
| EURCADv | |
| EURCHFv | |
| EURGBPv | |
| GBPSEKv | |
| EURJPYv | |
| EURNZDv | |
| EURUSDv | |
| GBPAUDv | |
| GBPCADv | |
| GBPCHFv | |
| GBPJPYv | |
| GBPNZDv | |
| GBPUSDv | |
| NOKSEKv | |
| NZDCADv | |
| NZDCHFv | |
| NZDJPYv | |
| NZDUSDv | |
| USDCADv | |
| USDCHFv | |
| USDCNHv | |
| USDHKDv | |
| USDJPYv | |
| USDNOKv | |
| USDSEKv | |
| USDSGDv | |
| SGDJPYv | |
| EURSEKv |
These symbols are available on all TIOmarkets trading account types.
Comparing TIOmarkets Trading Accounts
The choice between trading swap free or not is completely up to you and ultimately depends on your trading style, strategies, and personal preferences. If you engage in long-term trading strategies, hold positions overnight frequently, or follow Islamic finance principles, trading on the symbols listed above may be beneficial. However, if your strategy dictates that it would be beneficial to earn swaps, then you can trade the equivalent symbol that is designated as swap free.
TIOmarkets Standard, VIP and VIP Black trading accounts all have symbols available for trading that are swap-free. However the spreads and commissions between each account type varies.
| Standard | VIP | VIP Black |
| No Swaps on some symbols | No Swaps on some symbols | No Swaps on some symbols |
| Spreads from 0.6 pips | Spreads from 0.4 pips | Spreads from 0.4 pips |
| $5 / lot commission | $2 / lot commission | No commission |
| MT4 trading platform | MT4 trading platform | MT4 trading platform |
| Leverage up to 1:30 | Leverage up to 1:30 | Leverage up to 1:30 |
You can learn more about our account types on our accounts overview page.
How to Open a Trading Account
If you haven’t already got an account, follow these simple steps to set up and download the MT4 trading platform.
1. Register your account
Register your account with TIOmarkets, it only takes a few minutes and this will take you to your secure client portal.
2. Create a trading account
A demo account is an excellent way to practice trading indices without risking real money. It allows you to familiarize yourself with the platform, test strategies, and gain confidence before transitioning to a live account. To open a live account, you'll need to complete a verification process.
3. Download the MT4 trading platform
The next step would be to go to the download centre in your secure client area and download the latest version of the MT4 trading platform. MT4 is available for Windows, macOS, and mobile devices and you can choose the appropriate version for you. Follow the on-screen instructions to complete the installation process, which is straightforward and user-friendly.
4. Deposit funds
To on MT4 with real money, you'll need to fund your account. Go to deposit, select your deposit method and enter your preferred amount. You can start trading with TIOmarkets with a small amount and deposit more as your confidence grows.
5. Transfer funds to MT4
Once you have made a successful deposit, go to manage funds and transfer the funds from your TIOmarkets wallet to your MT4 account.
6. Login to MT4
Login to the MT4 trading platform and you should notice your balance reflects your deposit and you should now be able to place your first trade.
Trade Swap-Free with TIOmarkets
TIOmarkets is a leading online trading platform that provides traders with seamless access to the global financial markets. You can trade some forex and precious metals with leverage swap-free. Our platform offers advanced charting tools, real-time Forex market data, and fast order execution speeds.
Start trading, register your account today.
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Behind every blog post lies the combined experience of the people working at TIOmarkets. We are a team of dedicated industry professionals and financial markets enthusiasts committed to providing you with trading education and financial markets commentary. Our goal is to help empower you with the knowledge you need to trade in the markets effectively.
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