Why do many trading professionals say not to trade in futures contracts and leverage?
This question has been repeated very often, and many people may still not understand the topic from its roots.
That’s why I decided to explain again in a clearer way, so it reaches the largest possible number.
The subject simply is that futures contracts are not just trading…
It is a completely different transaction both legally and realistically, and there are 3 very big problems, which is why scholars have prohibited it.
Let's take it step by step 👇
1️⃣ In futures contracts… you do not actually buy an asset at all
In the spot market, when you buy a currency like $BTC or $ETH, you actually own it.
But in futures contracts, you do not actually buy a currency nor own it.
You are actually betting on whether its price will go up or down.
And this makes the process closer to gambling than to trading.
✔️ Islamic jurisprudence requires ownership of the commodity before selling it or trading on it
And this is not available here.
2️⃣ Financial leverage = Borrowed money + Amplified risk
Futures contracts are always linked to financial leverage.
And leverage means you are trading with borrowed money, not your own.
And this falls under:
❌ Riba suspicion
❌ Dealing with unowned money
❌ Possibility of paying interest or financing costs
Even if the platform says "no interest," leverage itself is based on the idea of borrowing...
And this is prohibited by Sharia.
3️⃣ High uncertainty and gambling
Islamic Sharia has prohibited any sale in which:
Great ignorance
Severe uncertainty
Gambling
And futures contracts involve:
⚡ Very high volatility
⚡ Betting on the future without owning an asset
⚡ Uncalculated risk that could wipe out the entire account
And this falls completely within the realm of uncertainty that Sharia has prohibited.
🔍 Summary
Futures contracts have 3 clear Sharia prohibitions:
❌ Not owning the asset
❌ Presence of borrowing/financial leverage
❌ Uncertainty and gambling
That's why scholars unanimously agreed that it is prohibited in its current form in cryptocurrency markets.
⬅️ As for spot trading without leverage and with actual ownership...
So this is what is being discussed, and opinions on it differ according to the method of use.
We ask Allah to grant us and you beneficial knowledge and lawful sustenance.
📚 Reliable Sharia sources you can search in:
Council of Senior Scholars – Kingdom of Saudi Arabia: Decisions of the Islamic Jurisprudence Assembly regarding futures contracts
International Islamic Fiqh Academy – Resolution No. (63) regarding deferred and future sales
Al-Azhar Al-Sharif – Fatwas on dealing in derivative contracts
Egyptian Fatwa House – Fatwas on uncertainty and gambling in sales
Book "Prohibited Sales" – Dr. Wahba Al-Zuhayli
🔖 Ready hashtags
#علي_ابوماهر #IslamicFinance #Futures #HalalTrading #Write2Earn
