How Does ingot.io Work?

Ingot.io functions as an online brokerage platform that allows individuals to trade Contracts for Difference (CFDs) and engage in Forex (Foreign Exchange) trading.

At its core, it provides access to various financial markets where users speculate on price movements without ever owning the underlying assets.

This operational model, while common in the conventional finance industry, involves specific mechanisms that are critically examined from an Islamic ethical standpoint.

Account Creation and Funding

The first step for a user is to set up an account and fund it.

• Registration Process: Users initiate trading by clicking “Start Trading Now” or “Start Free Demo,” which leads to an account opening portal. This typically involves submitting personal identification documents (KYC – Know Your Customer) to comply with anti-money laundering regulations.
• Deposit Funds: Once an account is approved, users deposit funds into their trading account. Ingot.io advertises “Zero Deposit Fees,” but users need to be aware of potential third-party charges (e.g., bank transfer fees).
  • Segregated Accounts: Reputable brokers typically hold client funds in segregated accounts, separate from the company’s operational funds, to protect client capital in case of insolvency. The “Safety of Your Funds” section on ingot.io’s website would detail this.

Accessing Trading Platforms

Once funded, users gain access to the trading software.

• MetaTrader 5 (MT5): This is the primary professional-grade platform offered. MT5 provides charting tools, technical indicators, and allows for manual and automated trading (Expert Advisors).
  • Order Placement: Users place orders (buy/sell) for various financial instruments through MT5. These orders can be market orders (execute immediately at current price), limit orders (execute at a specified price or better), or stop orders (trigger at a certain price to limit losses).
• INGOT Copy Trader: This platform allows users to automatically replicate the trades of selected “expert” traders.
  • Automated Trading Strategy: It’s a form of automated trading where the user’s account mirrors the actions of another trader. While it seems hands-off, the user still bears the risk of the copied trades.
• INGOT Mobile App (Future): The “Coming Soon” mobile apps for iOS and Android are intended to provide trading access on mobile devices, though their delayed launch is notable.

The Mechanism of CFD and Forex Trading

This is the crux of how ingot.io works and why it is problematic.

• Contracts for Difference (CFDs): When you trade a CFD on a stock, commodity, or index, you are not buying or selling the actual asset. Instead, you are entering into an agreement with ingot.io (the broker) to exchange the difference in the price of the asset from the moment you open the position until you close it.
  • Speculation: Your profit or loss depends entirely on correctly predicting whether the asset’s price will go up or down. For example, if you “buy” a CFD on oil at $70 and it goes to $72, you profit from the $2 difference. If it goes to $68, you lose $2.
  • No Ownership: Crucially, there is no physical delivery or ownership of the underlying asset. This distinguishes it from permissible investments where tangible assets are involved.
• Forex Trading: This involves speculating on the exchange rates between currency pairs (e.g., EUR/USD). You bet on whether one currency will strengthen or weaken against another.
  • Pair Trading: Currencies are always traded in pairs. If you buy EUR/USD, you are effectively buying Euros and selling US Dollars simultaneously.
• Leverage: This is a key feature and risk multiplier. Ingot.io offers leverage of up to 1:4000.
  • Amplified Positions: Leverage allows you to control a much larger position with a relatively small amount of capital (margin). For instance, with 1:100 leverage, a $1,000 margin allows you to trade $100,000 worth of currency.
  • Amplified Gains and Losses: While leverage can magnify profits, it also magnifies losses exponentially. A small market move against your position can wipe out your entire margin quickly.
  • Riba Component: The use of leverage often involves implicit or explicit interest charges (e.g., overnight swap fees), which are forbidden (Riba) in Islam.

How Ingot.io Makes Money

Despite the “Zero Commission, Zero Deposit Fees, Zero Withdrawal Fees” claim, ingot.io operates as a business and generates revenue.

• Spreads: The primary source of income for most CFD/Forex brokers is the spread – the difference between the bid (buy) and ask (sell) price of an instrument. For example, if the bid is 1.0800 and the ask is 1.0802 for EUR/USD, the 2-pip difference is the broker’s profit on that transaction.
• Swap Fees (Overnight Financing): For positions held open overnight, traders are charged or receive “swap” or “rollover” fees. These are interest payments based on the interest rate differential between the two currencies in a pair, making them a clear form of Riba.
• Client Losses (Market Maker Model): If ingot.io operates as a “market maker” (which is common), they take the opposite side of their clients’ trades. In this model, the broker’s profit largely comes from the aggregated losses of its retail clients. Given that 78% of retail accounts lose money, this is a significant revenue stream.

In summary, ingot.io provides the infrastructure and tools for high-risk, leveraged speculation on financial markets. What to Expect from ingot.io

While it functions technically to facilitate these transactions, its inherent reliance on interest-based mechanisms (Riba), excessive uncertainty (Gharar), and gambling-like speculation (Maysir) makes its operational model fundamentally impermissible from an Islamic perspective.

The “how it works” inevitably leads to the “why it’s prohibited.”