Hi, I’m Hazem, a Muslim by religion. I have read a lot about Islam and it’s somewhere written that forex and binary options trading can be Haram. I do trading and have several accounts on different brokers. Especially i like short-term options trading. But i once argued with one of my colleagues about it: he said it’s Haram. I use SWAP free accounts and Islamic Trading accounts (as it was written on brokers’s sites). I asked a question to the tech support of one of the broker and got the answer:
‘Chat operator: Rashid Iqbal
Good afternoon! Thanks for your interest in our company and asking your question. We understand it can be confusing so let’s look at some points:
- The worldwide spread of such a religion as Islam was largely obtained through worldwide trade.The Islamic world was always connected to trading - as we all know, Muhammad himself was a trader.
- According to the Quranic declaration: “Allah has permitted trade and forbidden riba [usury].” Our company don't take commissions at night, do not take commissions for prolonging a trading position, and do not write off or charge interest for the presence of funds or trading activity. We are focused on working in Arabic speaking countries for over 10 years and all of our accounts are Islamic.
- Gambling addiction is haram. But trading is not haram if you are not addicted to trading like gambling and if you apply technical analysis, research the global economy, and practice financial planning.
- Another good example to see the difference: a car may be used for both good and harmful purposes. You can break traffic rules because you’re driving an ambulance and need to save lives or because you’re driving a car and want to crush a crowd of people. Your income from trading can be used for both good and bad purposes. The car itself cannot be haram, as well as the trading platform.
- Speaking about trading in our conpany, we are providing binary option tranding services means no risk of losing more than allocated in the trade. In the binary trading mode the amount of possible profit and loss is known in advance.
- Binary option trading refers to the practice of an investor selling/buying a trading instrument that he does not possess at the moment of sale. He sells/buys them with the belief that the price of those instruments will changed, allowing him to profit by repurchasing them at price change. So, a binary option is a contract that gives the buyer the right, but not the duty, to purchase a certain underlying at a specific price and on a specific date. As a result, it just grants you the right but not the responsibility. And it is more like making a down payment on a car or house with no obligation to purchase it. The buyer has the option to decline to purchase the underlying and forfeit the down payment. If you had the right to buy a house, but in a month the price of this house fell 2 times, why would you use the right to buy this house at the old, higher price? Agree that such rights and actions are not haram in everyday life, and in the same way it cannot be haram in the field of online commerce.
I’m curious: as Muslims, are you satisfied with this answer? Or does this broker manipulate the facts to deceive me? What is your opinion?
I want to continue trading because i get profit and earn money but i want to be sure.
