Forex/share/commodities Trading on Internet

Answered according to Hanafi Fiqh by
As-salaam Alikum,

Please let us know the ruling about the forex / share or commodities trading over internet.

I have recently open an account to do trading with and, Is this kind of trading or any income from it is allowed by shariah?

Please guide us to follow the command of Allah and his Rasool in this matter.
Jazak Allah,



Al-jawab billahi at-taufeeq (the answer with Allah’s guidance)

Trading in stocks is permissible in the Shari’ah subject to the following conditions:

1. The main business of the company is not violative of Shari‘ah. Therefore, it is not permissible to acquire the shares of the companies providing financial services on interest, like conventional banks, insurance companies, or the companies involved in some other business not approved by the Shari‘ah, such as companies manufacturing, selling or offering liquors, pork, Haram meat, or involved in gambling, night club activities, pornography etc.

2. If the main business of the companies is Halal, like automobiles, textile, etc. but they deposit their surplus amounts in an interest-bearing account or borrow money on interest, the share holder must express his disapproval against such dealings, preferably by raising his voice against such activities in the annual general meeting of the company.

3. If some income from interest-bearing accounts is included in the income of the company, the proportion of such income in the dividend paid to the share-holder must be given in charity, and must not be retained by him. For example, if 5% of the whole income of a company has come out of interest-bearing deposits, 5% of the dividend must be given in charity.

4. The shares of a company are negotiable only if the company owns some illiquid assets. If all the assets of a company are in liquid form, i.e. in the form of money they cannot be purchased or sold except at par value, because in this case the share represents money only and the money cannot be traded in except at par.

(An introduction to Islamic Finance, by Mufti Taqi Uthmani (DB))

With regards to Spread betting, this is a form of gambling, which is Haram. Thus, any spread bets on shares, commodities are also Haram. Also it will not be permissible to trade in companies such as IG index which involves spread betting deals.

Forex trading is not permissible. Please see the Fatwaa of Mufti Taqi Uthmani (DB):

And Only Allah Ta’ala Knows Best.

Moulana Qamruz Zaman
London, UK

This answer was collected from, based in London (UK). It is one of the fruits of Darul Uloom London. Many ‘ulama are involved in answering the Q&A on the site, including: Shaikul Hadeeth Mufti Umar Farooq Sahib, Mufti Saifur Rahman Sahib, Mufti Abdullah Patel Sahib, Maulana Qamruz Zaman Sahib, Mufti Abu Bakr Karolia Sahib.

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