Websites like eToro offer services where you can buy and sell currencies , commodities gold, silver, oil, 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. 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. 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: However with an eToro Islamic account, all your positions will be closed at 5: 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:. The currencies needs to be transferred from the account of the seller to that of the buyer and vice versa. No interest on trades. In the case that there is any usurious interest, the contract will be invalid, void and Haram.
As you know already interest is haraam, I probably don't need to provide any hadith or quranic verse to prove that. If I do need to prove this first, please let me know as it won't take long. Based on your research, I can clearly see that you think the stock market is very difficult for muslims, and you're right, it is!
The company must not have a product which is forbidden in islam, alcohol, interest based loans etc etc. The company must not be using money from shareholders and sticking that money into an interest based account and earning interest on it. However, you can still find companies through which you can still get into the stock market in a halaal manner.
For example, they have scholars who monitor the funds and make sure they are halaal. As soon as they are found to be haraam, a particular stock from a fund is removed. Plus anything related to interest is automatically removed from the funds and given to charity.
For more info, check out this link: I don't know how many of these types of companies there are around the world, this is the only one I have found with a little research. Assuming the definition of riba is not derived from ra-ba-wa to grow as hinted by Allah SWT at The abuse of ra-ya-ba to the point of harming others is what i define as riba.
So in the case of futures, as long as it's for the good of others it's ok. Cases like anticipating a hardship season to come, would be an example of a good for others. Cases like insider trading would be bad for others and be categorized as riba. Thank you for your interest in this question. Because it has attracted low-quality or spam answers that had to be removed, posting an answer now requires 10 reputation on this site the association bonus does not count.
Would you like to answer one of these unanswered questions instead? Questions Tags Users Badges Unanswered. Islam Stack Exchange is a question and answer site for Muslims, experts in Islam, and those interested in learning more about Islam. Join them; it only takes a minute: Here's how it works: Anybody can ask a question Anybody can answer The best answers are voted up and rise to the top. Is buying or selling forex, commodities and stock indices halal in Islam?
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. Noah 1, 6 16 Speculating is a problem, as it is very similar to gambling. However, if you invest without speculating, that is fine i. Commodities are also fine, but indices can be risky as they can involve companies which muslims cannot invest in.
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Based on my own research, here are the problems: The company must not have a product which is forbidden in islam, alcohol, interest based loans etc etc The company must not be in debt, i. Salaams and welcome to Islam Stack Exchange. Unlike a typical internet forum, here we're attempting to build a high-quality library of questions and answers; as such, we typically expect answers to be referenceable.