Fatwa ID: 09163
Answered by Maulana Abdool Taheer Hussein Tagaully
Question:
Assalamu Alaikum Someone asked this question You know when Stock trading there is different form of trading. Day trading for instance is buying an asset and selling the same day. Contract trading, I buy a contract based on my analysis either a CALL which means I’m assuming the direction of the stock is going up or PUT that the price of the stock will fall over the course of a certain period, And the contract has a price target that I am assuming it will go towards and the closer the actual price gets to the target price, the more I make on that contract, for every 1 cent that the stock moves, I make or lose 1$ because in a contract there are 100 shares of that stock and 100 shares * 1 cent is a dollar. The contract has a expiration date, for instance I pay somebody $200 on a stock that is worth $50 per share to lend me 100 of their stocks until next week, if the contract makes profit you can choose to execute and the contract and you end up buying the 100 shares at the target price, either wise you’ll either choose to cut your losses early or wait until the contract expires worthless. So my question is, does the Sharia allow these sorts of transactions. Mind you, contracts are very risky if the right analysis is not done, meaning you could lose the Said $200 and not make anything. The alternative is you make almost unlimited profit as long as the stock is going in the direction you chose. Is this jaiz?
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
Your question refers to whether the CALL/PUT options trading you have described above is permissible in Shariah.
Through the explanation given above, we understand:
– There is no effective ownership.
– It is only a right to buy or sell the shares at a price before the expiry.
– There is excessive speculation and uncertainty.
– It contains elements of gambling.
Therefore, according to the Hanafi Madhhab, this form of trading will be impermissible because:
– There is no effective ownership.
– There is gharar (excessive speculation and uncertainty).
– It has elements of gambling.
A person should therefore abstain from this form of trading.
Only Allah ﷻ knows best.
Written by Maulana Abdool Taheer Hussein Tagaully
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham
References:
[1]
ومنها في المبيع وهو أن يكون موجودا فلا ينعقد بيع المعدوم وما له خطر العدم كبيع نتاج النتاج والحمل كذا في البدائع وأن يكون مملوكا في نفسه وأن يكون ملك البائع
Fataawaa Hindiyyah – Vol 3 – Pg 2 – Darul Fikr
وَشَرْطُ الْمَعْقُودِ عَلَيْهِ سِتَّةٌ: كَوْنُهُ مَوْجُودًا مَالًا مُتَقَوِّمًا مَمْلُوكًا فِي نَفْسِهِ، وَكَوْنُ الْمِلْكِ لِلْبَائِعِ فِيمَا يَبِيعُهُ لِنَفْسِهِ، وَكَوْنُهُ مَقْدُورَ التَّسْلِيمِ فَلَمْ يَنْعَقِدْ بَيْعُ الْمَعْدُومِ وَمَا لَهُ خَطَرُ الْعَدَمِ كَالْحَمْلِ وَاللَّبَنِ فِي الضَّرْعِ وَالثَّمَرِ قَبْلَ ظُهُورِهِ
Hashiyyah Ibn Abideen – Vol 4 – Pg 505 – Darul Fikr
[2]
فَإِنَّ الْغَرَرَ هُوَ الْخَطَرُ الَّذِي اسْتَوَى فِيهِ طَرَفُ الْوُجُودِ وَالْعَدَمِ بِمَنْزِلَةِ الشَّكِّ، وَهَهُنَا تَرَجَّحَ جَانِبُ الْوُجُودِ عَلَى جَانِبِ الْعَدَمِ بِالْخَبَرِ الرَّاجِحِ صِدْقُهُ عَلَى كَذِبِهِ؛ فَلَمْ يَكُنْ فِيهِ غَرَرٌ عَلَى أَنَّا إنْ سَلَّمْنَا أَنَّ الْغَرَرَ اسْمٌ لِمُطْلَقِ الْخَطَرِ لَكِنْ لِمَ قُلْتُمْ: إنَّ كُلَّ غَرَرٍ يُفْسِدُ الْعَقْدَ؟ وَأَمَّا الْحَدِيثُ فَيَحْتَمِلُ أَنْ يَكُونَ الْغَرَرُ هُوَ الْخَطَرُ وَيَحْتَمِلُ أَنْ يَكُونَ مِنْ الْغَرَرِ فَلَا يَكُونُ حُجَّةً مَعَ الِاحْتِمَالِ أَوْ نَحْمِلُهُ عَلَى الْغَرَرِ فِي صُلْبِ الْعَقْدِ بِالتَّعْلِيقِ بِشَرْطٍ أَوْ بِالْإِضَافَةِ إلَى وَقْتٍ عَمَلًا بِالدَّلَائِلِ كُلِّهَا
Badaai’ al-Sanaai’ – Vol 5 – Pg 163 – Dar al-Kutub al-Ilmiyyah
[3]
وَحَرُمَ شَرْطُ الْجُعْلِ مِنْ الْجَانِبَيْنِ لَا مِنْ أَحَدِ الْجَانِبَيْنِ) لِمَا رَوَى ابْنُ عُمَرَ رضي الله عنهما «أَنَّ النَّبِيَّ صلى الله عليه وسلم سَبَقَ بِالْخَيْلِ وَرَاهَنَ» وَمَعْنَى شَرْطِ الْجُعْلِ مِنْ الْجَانِبَيْنِ أَنْ يَقُولَ إنْ سَبَقَ فَرَسُك فَلَكَ عَلَيَّ كَذَا، وَإِنْ سَبَقَ فَرَسِي فَلِي عَلَيْك كَذَا وَهُوَ قِمَارٌ فَلَا يَجُوزُ؛ لِأَنَّ الْقِمَارَ مِنْ الْقَمْرِ الَّذِي يُزَادُ تَارَةً وَيُنْقَصُ أُخْرَى وَسُمِّيَ الْقِمَارُ قِمَارًا
Al-Bahr al-Raaiq – Vol 8 – Pg 554 – Dar al-kutub al-Islamiyy