My question relates to trading by “Big Option” an entity claiming to have Islamic Account for muslim traders. It describe that they are “riba-free”, practising “hibah concept” and do not involve with alcohol and swine etc. Kindly advise of its permissibility. Your prompt reply is greatly appreciated. Jazaakumullahu khairan kasira. Wassalam.
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh
Conventional binary trading is impermissible due to various reasons including the sale of call/put options in order to hedge against risks, Gharar (future uncertainty) and Riba (interest).
With regards to your specific question, the information provided on the website is not comprehensive and does not explain the financial structure used for the Islamic Binary product offered by the company.
In essence, the core concept of binary options is impermissible. We find it difficult to understand how a Shariah Compliant product has been developed. The mere removal of interest, hidden charges and having swap free accounts does not make the product Shariah Compliant. Kindly advise on the financial structure used for the Shariah product and the terms and conditions of the product. What are the functionalities of the product and what differentiate this product from general conventional binary trading.
And Allah Ta’āla Knows Best
Checked and Approved,
Mufti Ebrahim Desai.