Q: What is the Islamic position on ‘Spread Betting’? Please find below two definitions given for this activity.
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), and investors bet whether the price of the underlying
stock will be lower than the bid or higher than the offer. The investor does
not own the underlying stock in spread betting, they simply speculate on the
price movement of the stock.
Investopedia explains ‘Spread Betting’
For example, assume that a spread-betting company quotes a bid of $200 and an
offer of $203 for ABC stock and you believe that the price for ABC will be
lower than $200. Since you believe that the price of the stock would be go
below $200, you could “bet” $2 for every dollar that ABC falls below
$200. Therefore, if the stock price after a week came to $190 you would receive
$20, but if the price was $215 you would end up losing $30.
A: Both definitions are quite clear that this is simply another form of qimār wherein a sum is wagered on an uncertain outcome with the gain of one party coming at the expense of the loss of a counter party.