The modern era witnesses a wide spread of trading activities, which include the buying and selling of various financial assets such as stocks, currencies, commodities, and cryptocurrencies, with the aim of making profits. With easy access to markets through modern technologies, an important question arises among Muslims regarding the permissibility of these transactions: Is trading halal or haram in Islam?
First: Controls for trading in currencies and stocks:
Trading is considered permissible according to Islamic law if it meets the following conditions and controls:
Free from usury: Trading operations must be free from any form of usury, whether in the form of interest on accounts or when using leverage (margin trading) that requires paying interest on the loan provided by the broker.
Avoiding uncertainty and gambling: Trading decisions should be based on thorough study and analysis of the assets and market conditions, not on random speculations or pure luck. Trading based on unstudied speculation resembles gambling (maysir) which is prohibited in Sharia.
The permissibility of the traded asset: It is not permissible according to Islamic law to trade in shares of companies that operate in forbidden areas such as alcohol production, or dealing with usury (like traditional usury banks), or trading in goods and products that are prohibited in Islam.
Ownership of the asset (in some cases): Some jurists see the necessity of actually owning the sold asset before dealing with it and selling it, especially in trading goods. This prevents fictitious sales or selling what the seller does not own.
Transparency and clarity in contracting: Trading contracts must be completely clear, avoiding any form of deception, fraud, or exploitation of either party.
Secondly: Cases of prohibition of trading in Islam (when is it forbidden?):
Trading is considered religiously forbidden in the following cases:
Margin trading with usury: Using leverage (Margin Trading) if it involves borrowing at interest from the trading broker.
Trading in forbidden assets: Buying and selling shares of companies with activities that are religiously prohibited or currencies that do not meet the Sharia controls (if any).
Speculation based on ignorance and uncertainty: Relying in trading on luck, or unverified rumors, or making decisions without adequate knowledge or analysis, which makes it a form of forbidden uncertainty.
Trading in suspicious cryptocurrencies: Dealing in cryptocurrencies that are surrounded by ambiguity regarding their nature and origins, or that are linked to fraudulent or unethical projects.
The opinions of scholars and jurisprudential assemblies:
The majority of contemporary scholars have permitted trading in financial markets under clear Sharia conditions and controls, emphasizing the necessity of avoiding usury and uncertainty and everything that contradicts the provisions of Islamic law. Fatwa bodies and Islamic jurisprudential assemblies have confirmed the importance of adhering to these controls to ensure the permissibility of trading.
Summary:
Trading itself is not prohibited, but it becomes halal if it is done in accordance with the provisions and controls of Islamic law, avoiding clear prohibitions such as usury, uncertainty, gambling, and trading in forbidden assets. A Muslim must seek what is halal and avoid doubts in their financial transactions.
(Quoted with modification)