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Islam and Trading

AmDiab
Oct 12 2017 at 06:40
718 posts
Trading is a business, its not gambling! So, there is no problem with Islam! Only Gambling is Haram in Islam.

AniLorak
Oct 12 2017 at 06:42
920 posts
johnnathan posted:
Islamic account are the accounts which are commission free and swap free


I am not Muslim! But I prefer swap-free trading account! It keeps neat and cleans my trading account.

gbpusdg
Oct 12 2017 at 06:43
35 posts
johnnathan posted:
Islamic account are the accounts which are commission free and swap free


Yes but it does not deal with below three points:

1 - Trading on Margin (not allowed in Islam)
2 - Going Short (not allowed in Islam)
3 - Short-term (day) trading (Not considered responsible ownership - no intention to take delivery).


So as above three points - How do you deal with those?

gbpusdg
Oct 12 2017 at 06:43
35 posts
BaldoN posted:
This would mean commissions charges will be added in the spread + some other worsening trading conditions to compensate the swap / financial charges that will be applied from the banks / LPs - because the last does not have understanding whether the account is regular or Islamic or whatever. They just care how much they will make!
:)



BaldoN - I Totally agree with you.

From what I can see, Islamic accounts offer a very bad deal compared to non-Islamic trading accounts.

However, topic is not about Islamic account, it's about Trading, in particular short-term trading and whether this is allowed in particular the below three points:

1 - Trading on Margin (not allowed in Islam)
2 - Going Short (not allowed in Islam)
3 - Short-term (day) trading (Not considered responsible ownership - no intention to take delivery).

gbpusdg
Oct 12 2017 at 14:45
35 posts
AmDiab posted:
Trading is a business, its not gambling! So, there is no problem with Islam! Only Gambling is Haram in Islam.


Hi AmDiab,

Selling alcohol is also a business but that is not allowed in Islam. Prostitution is a recognized business in some countries, is this allowed in Islam?

Just because something is a business, does not mean it is allowed, it has to follow protocol.

A pension company or a company that buys stocks for long-term is perfectly acceptable and i have no issues with that.

Issued is with below three points which so far, not a single person has been able to refute or find a way around.

1 - Trading on Margin (not allowed in Islam)
2 - Going Short (not allowed in Islam)
3 - Short-term (day) trading (Not considered responsible ownership - no intention to take delivery).

AmDiab
Dec 02 2017 at 10:44
718 posts
gbpusdg posted:
AmDiab posted:
Trading is a business, its not gambling! So, there is no problem with Islam! Only Gambling is Haram in Islam.


Hi AmDiab,

Selling alcohol is also a business but that is not allowed in Islam. Prostitution is a recognized business in some countries, is this allowed in Islam?

Just because something is a business, does not mean it is allowed, it has to follow protocol.

A pension company or a company that buys stocks for long-term is perfectly acceptable and i have no issues with that.

Issued is with below three points which so far, not a single person has been able to refute or find a way around.

1 - Trading on Margin (not allowed in Islam)
2 - Going Short (not allowed in Islam)
3 - Short-term (day) trading (Not considered responsible ownership - no intention to take delivery).


What’s the problem with going short? Please, explain details…………

JIMBOB (brakeboy)
Dec 03 2017 at 08:02
1 posts
gbpusdg posted:
1 - Trading on Margin (not allowed in Islam)
2 - Going Short (not allowed in Islam)
3 - Short-term (day) trading (Not considered responsible ownership - no intention to take delivery).


SIMPLE SOLUTION:

DON'T TRADE ON MARGIN

DON'T GO SHORT

DON'T DAY TRADE

/THREAD

Losing money is worse than not trading at all.
gbpusdg
Dec 03 2017 at 15:35
35 posts
AmDiab posted:
gbpusdg posted:
AmDiab posted:
Trading is a business, its not gambling! So, there is no problem with Islam! Only Gambling is Haram in Islam.


Hi AmDiab,

Selling alcohol is also a business but that is not allowed in Islam. Prostitution is a recognized business in some countries, is this allowed in Islam?

Just because something is a business, does not mean it is allowed, it has to follow protocol.

A pension company or a company that buys stocks for long-term is perfectly acceptable and i have no issues with that.

Issued is with below three points which so far, not a single person has been able to refute or find a way around.

1 - Trading on Margin (not allowed in Islam)
2 - Going Short (not allowed in Islam)
3 - Short-term (day) trading (Not considered responsible ownership - no intention to take delivery).


What’s the problem with going short? Please, explain details…………



Hi AmDiab,

Thank you for your question.

Going short is basically selling something you do not currently possess and this is not allowed in Islam.

It is covered by the below hadith (sayings/actions of the the Prophet Mohammed (PBUH)

It was narrated that Hakeem ibn Hizaam (may Allah be pleased with him) said: I came to the Messenger of Allah (blessings and peace of Allah be upon him) and said: A man may come to me wanting to buy something that I do not possess; should I buy it for him from the marketplace then sell it to him? He said: “Do not sell that which you do not possess.”

So before you can sell something, you have to be in possession of it (ie. own it)

I am attaching two links - hopefully they will explain all. They are a bit long. You will obviously have to check with your own Islamic school of thought as to the exact ruling (I assume you are Muslim - if not, my apologies).

https://islamqa.info/en/160559
https://islamqa.info/en/169750


Hopefully this helps.

gbpusdg
Dec 03 2017 at 15:36
35 posts
brakeboy posted:
gbpusdg posted:
1 - Trading on Margin (not allowed in Islam)
2 - Going Short (not allowed in Islam)
3 - Short-term (day) trading (Not considered responsible ownership - no intention to take delivery).


SIMPLE SOLUTION:

DON'T TRADE ON MARGIN

DON'T GO SHORT

DON'T DAY TRADE

/THREAD



Hi BrakeBoy,

Thank you for your post.

Unfortunately it is not as simple as you state.

There are many Muslim (on here) who do trade on margin, who do go short, and who do day trade and they believe there is nothing wrong with it and that it is permissible.

The point of this thread is therefore to have a conversation and prove (or not) through established Islamic rules and regulations that the above three points are definitely not allowed (or allowed).

All the best.



L3CAP
Dec 04 2017 at 13:26
264 posts
@gbpusdg 'The point of this thread is therefore to have a conversation and prove (or not) through established Islamic rules and regulations that the above three points are definitely not allowed (or allowed).'

Maybe you would like to include a Muslim Scholar or Cleric in the thread to help answer your question? I doubt anyone else will be able to give a satisfactory answer.

Topic is locked