Category: Financial Transactions
Fatwa#: 36603
Asked Country: Denmark

Answered Date: Aug 22,2016

Title: Day Trading

Question

Assalamu alaykum respected mufti sahib

 

Is it permissible to daytrade stocks.. for example if you own stocks in a company which increases by 10% and you sell it.. and Then at The end Of The day you See it has fallen til 2% and buy it back.. now from The same money you have more stocks in the company? Is this type Of trade permissible or is it Only allowed to invest in a long period Of time

 

Jazakallahu khair 

Answer

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuhu

Day trading is defined as the buying and selling of a security/stock within a single trading day. Once the stock owned by the shareholder is sold, it does not belong to him. The repurchase of the stock at a lower price is a separate and completely new transaction. Day trading is permitted provided the underlying traded stock is Shariah Compliant.

 

And Allah Ta’āla Knows Best

Ismail Desai,

Darul Iftaa

 

Checked and approved by,

Mufti Ebrahim Desai

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