Assalamualaikum,

I have 2 questions regarding futures trading.

Firstly, I would like to say that I have read Discussion 50049 and it didn’t clear all my doubts.

Discussion 50049

Secondly, let me briefly explain Futures trading. It involves two types of trading. Long and short trades.

Long Position in Futures Trading: When you take a long position, you agree to buy an asset in the future at a specific price when the contract expires. The buyer hopes that the price of the asset will go up in the future. If the price does increase, the buyer can sell the asset at the higher market price and make a profit from the difference.

Short Position in Futures Trading: When you take a short position, you agree to sell an asset at a specific price when the contract expires. The seller is hoping that the asset’s price will go down. If the price does decrease, the seller can buy the asset at the lower market price to cover the short position, making a profit from the difference.

First Question

Now based on the previous responses, I have read regarding futures trading discussions on this page, it says that it is halal. But I have also read in the sunnah of the Prophet SAW that “You should not sell, what you don’t own”.

After keeping in mind all of this, can futures trading still be considered halal?

Second Question

Futures trading involves borrowing capital often called leverage, based upon your capital you can borrow money which ranges from 5x to 100x (x=times your money). This could potentially lead to you gaining profit or loss on the amount of leverage you choose

Is this type allowed in Islam or not?

Would like your answer with an detailed explanation

Thank you for your time and consideration in reading this question

Jazak Allah Khair