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Problem 1 is easy to solve and I can answer that, just sell all your shares before closing and buy again at the opening, or program your computer that way. Problem 2 is complicated, since physical possession is often impossible. If that's the deal then all the Muslims working on software which is to say on the computer are not earning halal income, because they can't have physical possession except of their computer. If you can get me wrong and we do need to have physical possession in the end, then I have another thing: For example, if Facebook is selling it's shares and it is a software communication based or whatever company which only exists virtually, how can we have the possession of it physically?
Problem 3 is more complicated. A company is providing me a platform to trade so they deserve to charge me. It's just like charging a shop rent.
We are a group of people for whom religion is very important and we are helping Muslims to trade riba-free by connecting them with professional Halal brokers. The borrower of the shares would then hopefully to be able to buy an equivalent number of shares to what they borrowed later, but at a cheaper price, repaying the loan and pocketing the difference as profit. Traditional-style short selling, where stocks or shares are borrowed at interest to be sold, is widely agreed to be haram. Learn more. Barakallahu fih! Luckily, with Forex trading, there are always two parties involved in the purchase of the CFD contract. Further, an FX trade does not involve any valid Shariah compliant commodity.
I just want to know if online forex trading is halal or not. And I would be more than happy if someone can prove my points wrong. It is so tough to say buying and selling currencies is Haram!
I am sorry to say no it is not Haram. However trading in the same currency is Haram discounting because money by itself does not reproduce.
It needs to be put into production for a value added, hence the justification of profit. Therefore, it should be haram. If it is supported by physical good and commodity then it is halal. So gold online trading without inventory is haram, because it is a paper trading and not a real one. Sign up to join this community.
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Create a free Team What is Teams? While many Muslim traders are eager to start trading, there are some who believe that Forex trading, in any form, is haram and forbidden. As it stands, making a profit from trading currencies is permissible in Islam, all Muslims have the right to improve their quality of life and financial position through profit-making business.
Using this as a base of their argument, some scholars say that as long as Forex trading meets a number of conditions it is halal. While there is no such thing as an Islamic Forex Broker, there are many brokers in Malaysia and other countries with large Muslim populations who offer Islamic Forex accounts.
When choosing an Islamic Forex account, Forex Malaysia — a guide for traders of all faiths and experience levels — highlights the importance of choose a well-regulated broker with a history of customer satisfaction and financial propriety. Islamic Forex accounts will not charge interest on open positions held overnight; this charge is also called the swap fee, so Islamic Forex accounts are sometimes called swap-free accounts.
As they will not charge interest, some Islamic Forex accounts will charge commission or have wider spreads than a traditional Forex account.
Various Islamic bodies have made rulings on the matter, both in favour of against the prohibition of Forex trading — which leaves devout Forex traders in a difficult position. The key element to be aware of in Forex trading, and the one that most Forex brokers focus on, is the elimination of Riba — or the interest on loans or assets. Islam also emphasises that when conducting business transactions, elements of uncertainty, excessive speculation, and gambling — or Gharar — should also be avoided.
It is also widely agreed that conventional Forex transactions — if used carefully — are a very effective means of protecting banks from exposure to international risk. Many Islamic finance institutions regularly trade huge amounts of Forex, both in order to protect their assets from changing fortunes in global finance and to make a profit, so why should the rules be applied differently to Islamic people? Another concern about the Islamic nature of Forex trading is the element of shared risk.
Luckily, with Forex trading, there are always two parties involved in the purchase of the CFD contract. If this asset underlying the CFD contract increases in value, you will make a profit and if the asset loses value, you will make a loss. The result is a sharing of the benefits and losses of the currency exchange with your counterparty — usually the Forex broker, but often another liquidity provider.
From this point of view, Forex trading and Islam are compatible in terms of shared risk. The central argument for Forex trading being haram is the speculative nature of it. Many scholars argue that Gharar is a central aspect of Forex trading and no amount of knowledge or hedging will remove the uncertainty or risk. That the asset being traded is not a physical asset, that is cannot be delivered to either party, only further compounds the issue.