Buying selling shares
Mu' meneen Brothers and Sisters,
As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)
One of our brothers/sisters has asked this question:
would you please answer my question that the Shares business (buying and selling shares) is allowed in Islam or not?
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Buying selling shares
In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is no one (no idol, no person, no grave, no prophet, no imam, no dai, nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad(saws) is His slave-servant and the seal of His Messengers.
According to the view of most scholars in Islam, there is nothing wrong in the investment of shares and the stock market.
But the scholars have given a few guidelines to follow, to make sure that that the income is halaal and according to Shariah.
According to the scholars the three main factors that would make owning the shares of the company haraam is as follows:
The company should not deal in a product which is declared haraam in Islam. Eg. alchohol, prostitution, usury, pork, etc.
The company should not deal in a product which is used to harm a muslim country. Eg. Arms manufacturing in a pagan country, etc.
Only the pure buying, holding, and selling of stocks is termed halaal by the scholars. All types of other derivative transactions like shorting the stock, buying calls, selling calls, buying puts, selling puts, straddles, or any other variations are not legal.
The business of shares investment is deemed halaal in Islam and should be treated like any other trading business, provided the commodity being traded or transacted by the company is not in its inherent nature declared haraam by Allah and His Messenger (saws).
Whatever written of Truth and benefit is only due to Allahs Assistance and Guidance, and whatever of error is of me. Allah Alone Knows Best and He is the Only Source of Strength.
Your Brother in Islam,