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:

ASSLAMA ALAIKUM WARAHMATULLAH BARKATAHU

WITH THE GRACE OF ALMIGHTY ALLAH SUBHANATALLAH I HOPE YOU WILLBE FINE IN HEALTH INSHALLLAH.

WELL I HAVE A QUESTION REAGARDING THE SHARETRADING IN THE LIGHT OF QUARAN AND HADEES PLEASE EXPLAIN ME IN DETAILS AS RECENTLY I HAVE STARTED THE SAME BUSINESS

MAA ASSALAMAH WA ALLAH MUFAHIZ

(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)

Answer:

Shares and stocks

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, investment in shares and/or the stock market in its essence is permissible in Islam, provided the following guideless are honored:

The three main factors that make a stock haraam according to the scholars is as follows:

1.      The company should not deal in a product which is declared haraam in its essence in Islam. Eg. alchohol, prostitution, usury, pork, etc.

2.      The company should not deal in a product which is used to harm a muslim country. Eg. Arms manufacturing in a pagan country, etc.

3.      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 and derivatives are not lawful.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.

Your brother and well wisher in Islam,

Burhan