Is it permissible to purchase stocks using call and put options?

Q: Is it permissible to purchase stocks using call and put options? الجواب حامدًا و مصليًا و منه الصدق و الصواب A: Call and put options are essentially the sale of a right which one party gives to another in return for a fee. The option holder purchases the option to hedge against possible negative […]

Read more...

How to determine the unlawful percentage received from dividends?

Q: I would like to know with regards to investing in stocks and shares more specifically on purification of the income received as a result of an investment in a company that is sharia compliant according to your screening criteria outlined in the article on ‘investing in stocks and shares’ http://alqalam.org.uk/research-papers/investment-in-stocks-and-shares/. The question I would like to […]

Read more...

Can I recover initial investments made towards CFDs?

Q: Would it be allowed to  recover my initial investment made into CFDs or do I call it ‘quits’?   الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب A:  You cannot take possession of any money that you have received through the CFDs investments even if it is to recover your initial capital deposit. As CFDs […]

Read more...

What is the Islamic position on CFD Trading?

Q: What is the Islamic position on CFD Trading? I know Spread Betting is not allowed and is fundamentally different to CFD Trading as the former is a synthetic market that can be manipulated by the market makers. Additionally, with regards to ‘owning the stock’, an individual does not own the stock if bought via […]

Read more...

Is leveraged trading through a broker providing interest free brokerage account permissible?

Q: Is leveraged trading through a broker providing interest free brokerage account permissible? الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب A: Leveraged trading is not permissible as you are selling something you don’t have or does not even exist.    

Read more...

What is the Islamic position on ‘Spread Betting’?

Q: What is the Islamic position on ‘Spread Betting’?  Please find below two definitions given for this activity. From http://www.investopedia.com/terms/s/spreadbetting.asp Definition of ‘Spread Betting’ A type of speculation that involves taking a bet on the price movement of a security. A spread betting company quotes two prices, the bid and offer price (also called the spread), […]

Read more...

What’s the Islamic ruling on options to buy/sell something in the future?

Q: Are two parties allowed to simply agree to an ‘option’ for both parties in the future? For example, A agrees to an option with B that A may/may not buy something in the future. Likewise, B also agrees to an option to sell/not sell in future. Is this allowed?   الجواب حامدا ومصليا ومنه […]

Read more...

What is the ruling on Binary options trading?

Q: What is the ruing on Binary options trading?   الجواب حامدا ومصليا ومنه الصدق والصواب A:  Please see the following link: http://alqalam.org.uk/fatawa/investments-fatwa/is-it-permissible-to-purchase-stocks-using-call-and-put-options/ Binary options (all-or-nothing options) are simply another form of call or put options and are not sanctioned in Islam.    

Read more...

Can I invest in premium bonds?

Q: Can I invest in premium bonds? The Al-Qalam Shariah Scholars Panel is respectfully requested to advise on the Islamic position regarding premium bonds. Are they a suitable way for Muslims to invest? الجواب حامدًا و مصليًا و منه الصدق و الصواب A: Premium Bonds are not suitable for Muslims to use as an investment […]

Read more...