Full explanation with evidence 😧🕵️♀️
So, here’s the complete explanation of this issue that every Muslim trader faces 😢.. mockery from family and so much more 😭😭..
And here is the answer to that question 😉👉
❌ Why do many scholars say that futures trading is haram:
1. Gharar (excessive uncertainty):
Futures contracts involve buying and selling contracts for assets that are not owned or that are owned at the time of trading.
In Islam, it is not permissible to sell what you do not own (Hadith: ‘Do not sell what you do not possess’ – Tirmidhi).
2. Usury:
Futures contracts often involve the use of leverage and margin trading, which involves interest-based borrowing or overnight fees.
Any form of usury is strictly prohibited in Islam.
3. Speculation and gambling (maysir):
Futures trading often resembles gambling as traders speculate on price movements without any real use of the asset.
Islam prohibits transactions that resemble games of chance.
4. Delay in delivery and payment:
Islamic law requires that in a salam contract or legitimate exchange sale, at least one of the payments (whether the price or the product) must be immediate.
Futures contracts involve delays in the delivery and payment of assets, making them invalid under Islamic contract law.
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✅ When can it be considered halal:
Some scholars permit certain forms of futures contracts under strict conditions, such as:
The asset must be halal and tangible (not purely financial).
The seller must own the asset or have the right to sell it.
The contract should be used to cover legitimate business needs, not speculation.
There should be no leverage, interest, or short selling.
And this is closer to Islamic futures contracts or salam contracts, not traditional futures contracts.
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⚖️ Summary of the final ruling:
Show summary
❌ The majority of scholars view futures trading as it is practiced today as haram due to the uncertainty, usury, and gambling involved.
✅ The minority view (under strict conditions) may allow limited forms if they resemble salam contracts, with full ownership, no leverage, and a clear intent (not speculation).
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🕌 Trusted Islamic references on this matter:
The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI): prohibits traditional futures contracts.
Dar al-Uloom Deoband and other traditional schools: the ruling in general is that it is haram.
Some contemporary Islamic economists suggest designing Sharia-compliant derivatives, but not traditional futures contracts.
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📌Summary:
> Traditional futures trading is considered haram in Islam due to the presence of speculation, usury, and selling what one does not own.
It can only be halal if it involves specific non-speculative contracts like salam and istisna under appropriate conditions.
If you are interested in halal investing, consider:
Islamic investment funds
Sharia-compliant stocks
Sukuk (Islamic bonds)
Investments based on real assets