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Stocks And Options Trading
Assalamwalaykum, In naked call or put options we don’t buy or sell stocks . We just trade to get the option premium? Is that Halal ?
In Shorting Stock we are betting if the stocks goes down and we are selling the stock which we dont own it . Is this Islamically allowed?
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3 Replies
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Stocks And Options Trading
updated 1 year, 8 months ago
2 Members
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3
Replies
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There’s nothing inherently impermissible about stock or options trading. This includes short selling as well as premium collection. However, one should always be mindful of any immoral or unjust aspect of every transaction.
As a word of caution, stock and options trading are very difficult and most retail traders lose money. Please understand the risks and use common sense to decide whether or not you want to trade the financial markets.
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Jazakallah and Thank you for your detailed response. I truly appreciate you taking the time to address my inquiry. May Allah shower you with abundant blessings for all the efforts you’ve put in.
Could you please specify which Hadith or source indicates that naked options trading and short selling are permissible?
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Quran’s principle for financial transactions is mentioned in verse 2:188. Gambling and riba are 2 examples mentioned in the Quran elsewhere that violate this principle and are therefore haram. As long as this principle is satisfied, all financial transactions are considered halal.
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