Asif147

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.