If You're Muslim, You Should Know This:
5 Main Reasons a Financial Transaction Can Be Prohibited in Islam:
Riba (Interest) – Involves giving or receiving interest on loans.
Gharar (Uncertainty) – Deals with unclear or risky contracts.
Maysir (Gambling) – Involves betting or speculation based on chance.
Fraud (Ghash) – Includes price manipulation or dishonest trading.
Selling What You Don’t Own – Trading assets you don’t possess yet.
Examples of Prohibited Financial Activities:
Leverage Trading
What it is: Using borrowed money (e.g., 50x or 100x leverage) to increase trade size.
Why it’s not allowed: Involves high risk (Gharar), may include interest (Riba), and resembles gambling.
Futures Contracts
What it is: Agreeing to buy/sell an asset later at a fixed price.
Why it’s not allowed: You're selling what you don’t own, and there's a lot of uncertainty.
Binary Options
What it is: Betting on whether a price will go up or down in a short time.
Why it’s not allowed: It’s pure gambling with no real investment.
Short Selling
What it is: Selling an asset you’ve borrowed, hoping the price drops.
Why it’s not allowed: You don’t own the asset, and it carries risky speculation.
Price Prediction Markets
What it is: Platforms where people bet on the future price direction of assets.
Why it’s not allowed: Based on chance, not true investment—considered gambling.
Perpetual Contracts
What it is: Contracts that don’t expire and are used with leverage for long or short positions.
Why it’s not allowed: Full of uncertainty (Gharar), similar to gambling, and lacks real settlement.
Crypto Lending with Interest
What it is: Earning a fixed return by lending your crypto (e.g., Binance Earn).
Why it’s not allowed: Involves Riba—guaranteed interest without any business risk.
