User-Friendly Platform Educational Resources Social Trading Features
Wikitoro author Wikitoro Team Written by Wikitoro Team
Wikitoro fact checker Mike Druttman Fact checked by Mike Druttman
Updated Feb, 2024

YES, eToro is considered as halal since the Islamic account that they offer is in accordance with the Sharia law. However, not all investments on this broker are halal, so you must choose your investments carefully and ensure that they align with Islamic finance principles.

Open an Islamic account!

76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

 

 

Opening Thoughts

As a devout Muslim trader, the question of whether eToro is halal has been paramount in my trading journey. In this article, I'll delve deep into my personal experiences with the eToro Islamic account and provide insights into the world of halal trading.

 

Understanding the Concept of "Halal"

"Halal" is an Arabic term translating to "permissible" or "lawful." While commonly associated with food, its significance extends to daily activities, behaviors, and notably, financial transactions like trading.

 

The Intersection of Halal and Islamic Trading

In finance, halal principles are pivotal. Halal trading means buying and selling assets in sync with Islamic law. This introduces the concept of the Islamic account.

An Islamic trading account ensures:

  • No interest (riba) earnings.
  • Transparent transactions.
  • Ethical and Shariah-compliant investments.
  • Elimination of overnight interest.

By opting for an Islamic account, Muslim traders can harmonize their trading activities with their faith.

 

eToro's Alignment with Islamic Trading Principles

For eToro to be deemed halal, it must resonate with Islamic finance principles:

  • No interest (riba): Islamic law prohibits earning or paying interest.
  • Transparency: All transactions must be clear, with all parties understanding the terms and conditions.
  • Risk sharing: Both parties in a transaction must share the risk and reward, ensuring fairness in financial dealings.
  • Ethical investing: Investments should not support industries or activities deemed haram (forbidden), such as alcohol, gambling, or weapons manufacturing.

From my extensive use of the eToro platform, I can affirm its alignment with these principles.

 

Navigating eToro's Assets: Which are Halal?

eToro boasts over 5,000 assets, from forex to cryptocurrencies.

Tradable assets on the eToro platform
Tradable assets on the eToro platform

However, not all of them are halal. Here's a snapshot:

AssetIs it Halal?Notes
ForexPotentiallyHalal if traded without leverage and no delay in currency exchange. Trading with leverage might involve interest (riba), making it haram.
CommoditiesDependsHalal if the commodity is Shariah-compliant (e.g., gold).
IndicesDependsDepends on the companies in the index. If it contains haram companies (e.g., alcohol producers), it might not be permissible.
StocksDependsHalal if the company's primary business is Shariah-compliant. Haram if it deals with forbidden activities like alcohol or gambling.
CryptoControversialThe permissibility is debated among scholars. Some see it as halal, while others have reservations due to its speculative nature.
ETFDependsHalal if the ETF tracks Shariah-compliant assets. Might be haram if it tracks interest-involved assets like bonds.

Remember: For precise guidance, consult Islamic scholars or Islamic finance experts.

 

Tips for Shariah-Compliant Investing on eToro

In the vast landscape of online trading, I've found that eToro genuinely stands out by respecting religious beliefs. As a Muslim trader eager to align my financial activities with my faith, I've learned the importance of navigating the platform in a Shariah-compliant way.

Here, I'll share my key tips to ensure your investments on eToro remain true to Islamic principles:

  1. Research and Choose Halal Assets: Not all assets on eToro are halal. Avoid companies involved in haram industries or activities. Focus on ethical companies that promote social welfare and environmental sustainability.
  2. Consult a Knowledgeable Advisor: Seek guidance from an expert in Islamic finance to ensure your investments are Shariah-compliant.
  3. Stay Informed: Regularly review and monitor your investments to ensure they continue to meet Islamic principles.
  4. Be Mindful of Risk Sharing: Be cautious when using leverage or margin trading as these can contradict the principle of risk sharing.

 

To Sum It All Up

Is eToro halal? Yes, with its Islamic accounts adhering to Shariah principles. However, it's imperative for Muslim traders to select investments wisely.

 

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply. Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.

Wikitoro author Wikitoro Team About Wikitoro Team

The Wikitoro Team is a dynamic group of five seasoned eToro traders who have been actively using the platform since 2018. As pioneers in establishing the Wikitoro wiki site, we are dedicated to ensuring the accuracy and reliability of the information we provide. Our team regularly verifies data and content from our authors and contributors, taking turns to meticulously review each piece. Our commitment is to offer our readers factual and precise information, reflecting our extensive experience and deep understanding of the eToro platform.

Read More
wikitoro author strip image

76% of retail investor accounts lose money