Fatwa: # 41799
Category: Business Matters
Country: India
Date: 15th May 2019

Title

CFD Trading

Question

I intend to buy shares of a company which is offered in lots

The size of 1 lot is 2300 shares

I can buy as many lots as i want

The price of 1 share is ~195 therefore the total valution would be ~450000

But instead of paying the full amount of ~450000, i pay only ~75000

Once purchased these shares will be in my possession for a month

If the price goes up say to 200 i get a profit of 5 per share and if the price goes down say to 190 i incur a loss of 5 per share

Is this type of trading halal?

Answer

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

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

According to our understanding your query refers to CFD Trading.

A CFD stands for 'Contracts For Difference'. When you trade CFDs, you don’t physically own the underlying asset, instead you are speculating on the price movement of that asset (financial instrument). This means you can take advantage of prices move up or down in value, on thousands of global financial markets including currencies, indices, commodities and more.

In essence, CFD is equivalent to exchanging fewer amounts of money for more, or vice versa. Such an exchange is not permitted in the Shariah as it falls within the purview of Gambling.

And Allah Ta’āla Knows Best

Anas Sharieff Qasmi 

Student Darul Iftaa

Hyderabad, India

Checked and Approved by,

Mufti Ebrahim Desai.

_______

CFD TRADING

رد المحتار: ج 9 ص 665 

لأن القمار من القمر الذي يزداد تارة وينقص أخرى ، وسمي القمار قمارا لأن كل واحد من المقامرين ممن يجوز أن يذهب ماله إلى صاحبه ، ويجوز أن يستفيد مال صاحبه وهو حرام بالنص

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