Leverage is forbidden and trading on credit

Leverage is a dangerous tool in the world of trading, as it enables investors to open trades that exceed their actual capital, which multiplies potential profits but also increases losses. This tool can quickly lead to the loss of all capital, especially during market volatility. From a Sharia perspective, leverage is considered forbidden because it relies on usurious loans, where the trader borrows from the broker in exchange for interest or an implicit condition that falls under usury. Furthermore, it opens the door to gambling, making its use contrary to the principles of Islamic Sharia law regarding lawful trading.