My question is regarding forex trading, in this trade you buy or sell currencies through a broker. You either do trade by your own money e.g. €1000 investment you can trade currency with that money, or you can borrow money from broker who will share in profits but if loss he will not lose anything. Your buying and selling can be on spot rate, futures and swaps. I know for sure futures and swaps is Haraam. If you trade in a day you don’t get interest charged but if you trade carries over to the next day then depending upon your buying and selling they charge interest or pay interest. But now there are brokers who are not charging interest on it.
In short, I will be buying one currency on spot rate with my money (nothing from brokers) and wait for the right time to sell it off on a spot rate and that is the profit I make, is this Halal or not? (No interest element involved in it, in this transaction I can gain or lose).
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykumwa-rahmatullāhiwa-barakātuh.
We are aware of the different methods of forex trading. In the trading explained by you kindly clarify if physical possession of the currency takes place or not?
If not then provide us with details of the procedure.
And Allah Ta’āla Knows Best
Mufti Hussein Issa,
Mozambique
Checked and Approved by,
Mufti Ebrahim Desai.
www.daruliftaa.net