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Cryptocurrency Futures Trading
I want to know is crypto future trading is halal or not. In spot crypto trading we actually buy a crypto currency and then sell like we buy and sell gold. but in future trading I can take loan from the app and i will buy crypto currency from all that money and when i will sell that crypto currency , i will give back the loan back to the app with out any interest. But in future trading there is a funding fee(almost equal to 1 USD) which some time I have to give to binance(name of app) or some time binance will give me. I will explain you in detail what is funding fee.
“The Funding Rate determines the periodic payments that are made between traders who hold either long(buying) or short(selling) positions in perpetual futures contracts during a Funding Round.
Funding Round is the periodic event when the Funding Fee is exchanged between traders holding long(buying) and short(selling) positions. This exchange usually takes place every eight hours. These notional amounts that a user pays or receives are known as Funding Fees.
Note that the Funding Fees on Binance Futures are not a fee paid to Binance, but between traders. It’s a mechanism used to maintain the balance between the prices of cryptocurrencies in the futures and spot markets.”
Is doing future trading is halal? From my point of view its halal because no interest is involved in it. But i want to ask this from Javed Ahmad Ghamidi.
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5 Replies
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Cryptocurrency Futures Trading
updated 1 week, 6 days ago
3 Members
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Replies
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I forgot to add this also.
“When the Funding Rate is positive, the price of the perpetual contract is usually higher than the mark price. Thus, traders who are long pay for short positions. Conversely, a negative Funding Rate means that short positions pay for longs.
Funding Rates are paid peer-to-peer. Therefore, Binance takes no fees from Funding Rates as they happen directly between users.”
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I was a future trader for almost 4 years. The main reason of halting future trades was funding fee. The calculation of funding fee has interest rate as one of the bases. So avoid future trading at any cost. It’s available on the binance platform if searched for the calculation of funding fee there is explicitly mentioned “interest.”
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I have read that the word ‘interest’ is used on their website but they also clearing mentioned on their website that Binance don’t get funding fee. Funding fee is a fee that is between the traders which they pay or receive. Definition of interest which I know (extra charged money against loaned money) didn’t fit in here. Any ways thanks for your consultation.
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It’s charged between the traders to gap up the difference between the spot and future trades. But I would prefer for you spot trading. Don’t dive into things that conforms our biases. Let’s not lose our truer self for smaller gains. Allah de aasana ki
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Please see:
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