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Is Buying and Selling Shares for Profit Halal or Haram?

Answered as per Hanafi Fiqh by Muftionline.co.za

Q: If we interpret various Fataawa then it seems we can purchase shares and then sell them. But some people say that if you purchase the shares speculating that they will go up and sell within few minutes or after an hour or after some days then it is gambling. They say that the sole purpose of share buying should be the partnership of the company. If we are buying shares in anticipation of getting higher price afterwards, it is haraam. According to some muftis the sole purpose of buying the shares should be the partnership in the company and not trading. My question is can I buy the shares of a permissible company and then sell it when the value goes up?

Bismillaah

A: It is not haraam, for this does not fall under the definition of gambling. A partnership is permissible whether it is for short term or long term.

And Allah Ta’ala (الله تعالى) knows best.

كتاب الشركة : لا يخفى مناسبتها للمفقود من حيث الأمانة بل قد تحقق في ماله عند موت مورثه ( هي ) بكسر فسكون في المعروف لغة الخلط سمي بها العقد لأنها سببه وشرعا ( عبارة عن عقد بين المتشاركين في الأصل والربح ) جوهرة (الدر المختار 4/ 298)

كتاب الشركة : الشركة جائزة لأنه صلى الله عليه وسلم بعث والناس يتعاملون بها فقررهم عليه (الهداية 2/ 624)

Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)

This answer was collected from MuftiOnline.co.za, where the questions have been answered by Mufti Zakaria Makada (Hafizahullah), who is currently a senior lecturer in the science of Hadith and Fiqh at Madrasah Ta’leemuddeen, Isipingo Beach, South Africa.

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