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Spread Betting Account Under Islamic Financing


Guest Arxi

Question

Hi, 

Can anyone tell me if the Spread Betting Account of IG is Halal in the context of Islamic Investing.

It is a margin account where we can do short selling too.

There is no interest/riba charged in the Spread Betting account (Forward Contracts).

Only we have to pay higher spread to IG which I personally think is kind of share in our profits that we are giving to IG.

Please confirm me if its Halal or not. 

The only reason I am considering Spread Betting Account is to do Short selling on Stocks to take advantage of the downward movement in the stock prices. 

Kind Regards

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Guest Spread Betting Account
On 04/01/2020 at 22:43, Guest Arxi said:

Hi, 

Can anyone tell me if the Spread Betting Account of IG is Halal in the context of Islamic Investing.

It is a margin account where we can do short selling too.

There is no interest/riba charged in the Spread Betting account (Forward Contracts).

Only we have to pay higher spread to IG which I personally think is kind of share in our profits that we are giving to IG.

Please confirm me if its Halal or not. 

The only reason I am considering Spread Betting Account is to do Short selling on Stocks to take advantage of the downward movement in the stock prices. 

Kind Regards

 

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According to our understanding, you are referring to the option of either purchasing (call) or selling (put) an item in the future based on the difference between the exercise price (agreed purchase or selling price) and the market price.

If one profits through the exercise price either by purchasing or selling shares, one exercises that option or else he forfeits the option. A price is paid for the option namely premiums. According to the Shari’ah, the purchase of options is not Maal (commodity) and is not permissible. Furthermore, it has the element of gambling (Qimaar) in it. Effectively, the option purchaser and the company enters into a bet. If the exercise price is better, the option purchaser wins the bet or else he loses and the company wins the bet. This is not permissible.

 

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On 21/05/2020 at 23:57, Asif147 said:

According to our understanding, you are referring to the option of either purchasing (call) or selling (put) an item in the future based on the difference between the exercise price (agreed purchase or selling price) and the market price.

If one profits through the exercise price either by purchasing or selling shares, one exercises that option or else he forfeits the option. A price is paid for the option namely premiums. According to the Shari’ah, the purchase of options is not Maal (commodity) and is not permissible. Furthermore, it has the element of gambling (Qimaar) in it. Effectively, the option purchaser and the company enters into a bet. If the exercise price is better, the option purchaser wins the bet or else he loses and the company wins the bet. This is not permissible.

 

If you buy a software or service in order to make profit by selling it in near future is that haram? Because it is not "maal".

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