Forex is Halal or Haram?
There are generally two kinds of foreign exchange transactions:
If this question can be reworded to fit the rules in the help center , please edit the question. Let see definition of Forex from Wikipedia:. The foreign exchange market forex, FX, or currency market is a global decentralized market for the trading of currencies.
This includes all aspects of buying, selling and exchanging currencies at current or determined prices. If it's for trading it's permissible for Islam. Generally Muslims see Forex halal supporting with this hadith: I am getting this from islamqa. If the types are different then sell however you like, so long as it is hand to hand.
However, buying stocks from companies which are selling or providing non-Islamic products is not permissible. Like buying stocks from alcoholic beverage seller:. Having reduced the issue to one of trading spot Forex and assuming there is no interest element deemed to be involved, we move onto the next issue. So clearly, the Prophet Mohammed peace be upon him had in mind exchanges of different types of commodities that would be made between two parties, recognizing that this was a natural and just aspect of commerce.
In fact, one could extrapolate that it was natural and accepted for a deal to made between two different parties.
In modern times, it can be argued that in regards to Forex trading, the deal is made between a Forex broker and a trader, so this would qualify under such a definition of two different parties, which would be permissible according to Islamic law. We would seem to be on solid ground here, as when a trade is made with a Forex broker, it takes effect immediately. Interestingly, this could suggest that all non-market trades i. They are simply speculating that the value of one with go up and the value of another will go down.
Is such speculation permissible according to Islamic law? This is an extremely difficult question to answer and it may be one that should be discussed with your own religious leader rather than being decided base on an internet article. We can start by saying that Islam recognizes that nearly all adult human beings strive to improve their financial positions, and that life involves a large element of uncertainty.
In life we are confronted with many choices, the outcome of which is unclear, and we strive to use intelligence and skill in choosing the available option that will produce the superior outcome. However, we then must go on to say that gambling is strictly forbidden by Islamic law, even as a form of recreation or entertainment when undertaken with small monies which the gambler might be said to be able to afford to lose.
Would you like to answer one of these unanswered questions instead? Home Questions Tags Users Unanswered. Is buying or selling forex, commodities and stock indices halal in Islam?
According to these decrees, the conditions for trading currency are: Immediate buying and selling without delay The currencies needs to be transferred from the account of the seller to that of the buyer and vice versa The cost of the trade should be paid without delay No interest on trades.
Noah 1, 7 20 Speculating is a problem, as it is very similar to gambling. However, if you invest without speculating, that is fine i. Commodities are also fine, but indices can be risky as they can involve companies which muslims cannot invest in.
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Based on my own research, here are the problems: The company must not have a product which is forbidden in islam, alcohol, interest based loans etc etc The company must not be in debt, i.
Salaams and welcome to Islam Stack Exchange. Unlike a typical internet forum, here we're attempting to build a high-quality library of questions and answers; as such, we typically expect answers to be referenceable. As written, this post looks like mere personal opinion and should be backed up by evidences or it risks deletion. See also this blog post.