Fatwa: # 44858
Category: Business Matters
Country:
Date: 30th June 2020

Title

Am i allowed to daytrade stocks?

Question

Assalumalikum hope you are well i have two question regardinf stock shares.

1. Am i allowed to invest into shares like soical media platforms such as facebook and instagram and selling platforms such as ebay and amazon. On socal media stocks such as facebook make money on advertsiment so if you to sell your service or products you can use facebook and other socal websites and pay them for advertisments. Now here is the confusion. On the socal app like facebook you can advertise halal stuff like if you selling phones or clothes and also people can sell haram stuff like alcohol and betting app however facebook will not own these stocks or service they just advertise what people want to sell. So will this will be a hala investment? On selling platforms such as ebay and amazon people can sell products which are halal also haram so would this be a hala investment?

2. Am i allowed to daytrade stocks. So for example i buy a stock at 10am at £50. I use techincal analysis and watch the charts to predict if the stock will go up or down (we dont know if it will go up or down) i use indicators such as simple moving averages and support and resistance on the candlestick charts to predict it now 3 mins later the stock has gone up £5 and i sell and i am happy with profit could i do this and is it allowed. Some people say this is speculation and haram but im not sure how because i use techincal analysis.so can i day trade like this?

Thanks for your time may Allah reward you.

Answer

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

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

Brother, in order for us to advise you can you please clarify the following points:

1.      What stocks are you buying? Is the underlying traded stock Shariah Compliant?

2.      Are you in possession of the stock before selling it?

3.      There are different types of day trading on the stock market such as short selling etc. Which day trading are you doing?

Email your clarity to admin@daruliftaa.net. Ref Ahmad Patel.

And Allah Ta’āla Knows Best                                      

Ahmad Patel

Student Darul Iftaa

South Africa

Checked and Approved by,
Mufti Ebrahim Desai.

 

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