Binary options and trading

Answered according to Hanafi Fiqh by


Is binary option halal or haram?

For forex, or commodities? where you invest on a currency, for example from 30 seconds to days.. on a fixed time?the other person behalf.


Bismillahi Ta’ala

Assalamu alaikum warahmatullahi wabrakatuh,

Binary Options/Trade in simplified terms, for lack of better word, is simply “gambling on the fluctuation of the price of a given commodity”. 

You put a “bid” [investment amount] on a commodity at its “present rate”, with anticipated “strike rate” at the “expiry time”. If at the expiry time your “strike rate” is as you “predict” the “current rate” at that time to be, you win this gamble. Otherwise, you lose. 

At its core, this is nothing but a straight up gamble based on an uncertain event in the future. Such a sale or purchase is expressly prohibited in Islam. 

On a technical level, we will have other problems associated with call/put options of transacting in a “right of sale or purchase”. This form of transaction is equally problematic as well.

While we understand the need to innovate along with the times, even in trading and commerce, we cannot do so at the cost of indulging in Shar’an impermissible form of trading.

And Allah Ta’ala Knows best,

Wassalamu `alaykum, 
Mufti Faisal al-Mahmudi

This answer was collected from, which is a fatwa portal operated by Mufti Faisal al Mahmudi from Canada. 

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