Trading according to Islamic law
Trading in financial markets has become one of the most important economic activities in the modern era, through which assets such as stocks, commodities, currencies, and various contracts are bought and sold. With the expansion of these activities, the need has arisen to ensure their compliance with the provisions of Islamic law, which sets specific controls to ensure the integrity of transactions and protect them from gharar, riba, and prohibited practices.
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The concept of Islamic trading
Islamic trading is an investment and trading method that complies with the provisions and principles of Islamic law, which are based on the Holy Quran and the Sunnah, and avoids prohibited transactions such as:
Riba (interest): any conditioned increase on capital in exchange for time.
Gharar (ignorance and excessive risk): such as selling what one does not own or cannot deliver.
Gambling (maysir): transactions that rely on pure luck rather than real economic activity.
Investing in prohibited activities: such as companies dealing in alcohol, gambling, usury, or any activity contrary to Sharia
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Regulations of legitimate trading
1. Owning the asset being traded
It is not permissible to sell what the trader does not own, and the commodity or stock must be in their possession before selling.
2. Freeing the transaction from usurious interest
Especially in traditional forex accounts that impose overnight interest on trades.
3. Transparency and clarity
The terms of the contract must be clear without deception or concealment of essential information.
4. Avoid excessive speculation
which resembles gambling or relies on pure risk.
5. Ensure the company's activity
The company whose shares are being traded must engage in activities that are permissible by Sharia.
--Types of permissible trading
Buying halal stocks: shares of companies with legitimate activities and a balance sheet free from usurious or prohibited transactions.
Real commodities: such as gold, silver, oil, and agricultural products, provided they are delivered or the ability to deliver them is guaranteed.
Spot contracts: where buying and selling and immediate settlement occurs without deferring entitlements.
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Trading in forex according to Sharia
Traditional forex contains Sharia violations, the most prominent of which are usurious overnight fees (Swap), but some brokers offer Islamic accounts without interest, with the necessity to ensure they are free from any hidden fees or ambiguities.
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Advantages of adhering to Islamic trading
Compliance with Sharia rulings and earning lawful income.
Avoiding unlawful risks and arrogance.
Enhancing the psychological reassurance of the investor.
Contributing to an ethical economy based on justice and transparency
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Trading according to Islamic law is not just a religious option; it is also a safe economic choice in the long term. It balances the achievement of lawful profit while maintaining moral values and limits the descent into destructive speculation or prohibited transactions. With the investor's awareness and commitment to regulations, trading can become an effective tool for financial growth in accordance with Islamic teachings.
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