Websites like eToro offer services where you can buy and sell currencies, commodities(gold, silver, oil, etc.) and indices(SPX500, NSDQ100, DJ30, UK100, FRA40, GER30, etc).
It's basically an online trading platform. The way it works is that, for example, you buy gold or euro at a price from the current market and later sell it for a higher price(if the price goes up). Now, you predict the market and think that euro may rise against dollar or vice versa, which may or may not happen.
I don't know much about Interest or Riba and I wonder if the above trading is Halal in Islam? Detailed answers with authentic references are appreciated.
The comments to this question convinced me that it was Halal, until I read the following on eToro.
Both FX and commodities are traded in the spot market for 24 hours. At 5:00 pm New York time, all open positions are rolled over for the next 24 hours and the daily interest is added to the company’s accounts every 24 hours. The company can then either pay the interest or charge the client’s account to cover the fees.
With an Islamic account we make sure that there is no Riba in any form throughout the duration of the contract. In the FX market, if you don't close the trade before 5:00 pm New York time, all open trades will be automatically rolled over, which normally poses a problem for those following Islamic law, due to the possibly usurious interest charged for the rollover. However with an eToro Islamic account, all your positions will be closed at 5:00 pm (10:00 pm UST) and you can then reopen them immediately in order to avoid all interest problems and trade according to Islamic Sharia law. If the client chooses to reopen a trade immediately, the client will not pay any usurious interest.
There's no doubt that currency trading is one of the most difficult dilemmas in Islamic jurisprudence (Faqih). On the one hand, it requires the simultaneous exchange of currencies, which makes it a kind of hand to hand exchange. On the other hand, contemporary scholars consider the record of money transferred to or from a bank account as delivery. To resolve the issue, several decisions and fatwas have been issued. According to these decrees, the conditions for trading currency are:
Immediate buying and selling without delay
The currencies needs to be transferred from the account of the seller to that of the buyer and vice versa
The cost of the trade should be paid without delay
No interest on trades. In the case that there is any usurious interest, the contract will be invalid, void and Haram.