Futures Trading in Islam Clear & Simple
1. Selling What You Don’t Own
The Prophet ﷺ said: “Do not sell what you do not possess” (Sunan Abi Dawud 3503).
In futures, you sell contracts, not the actual asset. Most Islamic scholars say this is not allowed because you don’t own or possess it at the time of sale.
2. Contracts & Leverage
The Qur’an (2:282) says loans and deferred deals should be written. But having a contract doesn’t make a haram deal halal.
Leverage without interest removes riba, but the structure of futures can still break Shariah rules.
3. Funding Fees
Funding fees are payments between traders to keep price in line with the market not just a platform fee. The main Shariah concern is the overall futures structure, not just this fee.
4. Halal Alternatives
Spot trading or Shariah-approved contracts like Salam and Istisna’ are safe options if you want to trade according to Islamic rules.
Bottom line:
Most conventional futures and perpetuals are not Shariah-compliant due to ownership, possession, and uncertainty issues—even without interest.
