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Islamic Ruling On Prop Firm Account
السلام عليكم!
I hope you are doing well. I would like to seek guidance regarding the permissibility of Prop Firm Account trading in Islam.
A Prop Firm (Proprietary Trading Firm) allows traders to use the firm’s capital to trade financial markets. Typically, a trader pays a fee to take an evaluation or challenge, and if they pass by meeting specific profit targets and risk management rules, they receive a funded account where they can trade. The firm then shares a percentage of the trader’s profits (e.g., 70-90%), while losses are absorbed by the firm, up to the agreed limits. Also at the end they get their initial fee back along with profit that the participant makes.
Things to be noted here:
The proprietary firm does not allow participants to trade in a real market account. Instead, all trades are executed in a demo account on the firm’s own server. Even after passing the challenge, the Funded Account is still a Demo account and not a real trading account.
Given this structure, if a trader is not engaging in actual market transactions but is instead operating within a simulated environment, where the market data is real, but the trades are not executed in the live market, the evaluation process seems to be more of an assessment of analytical skills rather than actual trading.
In this context, one could draw a comparison to a person playing a shooting game: while real-life shooting has clear ethical and religious prohibitions, a simulation does not carry the same ruling. Similarly, could it be argued that since the trading activity in a prop firm challenge is purely simulated, the associated earnings would not fall under the same prohibitions as real-world trading?
I would appreciate your insights on this matter.
Thank you.
جَزَاكَ ٱللَّٰهُ خَيْراً کثیراً.
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6 Replies
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Islamic Ruling On Prop Firm Account
updated 6 days ago
4 Members
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6
Replies
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All business transactions are valid except for the ones which involve deception and haram. If there is no deception or harm intended there, one can adopt it.
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Assalam Alaikum sir, I would like to know it more clearly, I have same confusion for propfirm trading, so basically they provide us virtual funds to trade and they copy our trades and do trading from our analysis and give use profits for that, thats basic principle, and yeah its not free we need to pay fees for a challenge and then prove ourself as a good trader by completing their 15% profit target under some conditions, only after that they provide us funds, and they dont always put their money in real market always if we did so, and we cant know when they will follow our trades or not, so thats basic defination of propfirm trading, and one thing, the way they trade is future trading and cfd trading, but we dont do so, because we are not putting even a single dollar in real market, we are just helping them to decide for trades,
so after all this, my question is that, sir can you give me fatwa that its permitted in Islam and I can easily do this? and you will be resposible for my all sins in this type of trading if its haram in actual, thanks sir, I would love to know your answer plz.
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@Umer25 please guide.
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Please read the discussion in the link below where I have already discussed these points. Reflect, and absorb the point of view I presented there. If you feel satisfied with it, then go for it otherwise refrain from it. In religious matters, especially ijtihadi matters, accountability depends on one’s actions in accordance with their honest understanding of the matter. No one gives the kind of Fatwa that you are seeking. Follow the course which you honestly feel is the right religious requirement.
For official fatwa, please write at the following link but keep in mind this fatwa service is primarily for personal matters like divorce and inheritance. However, there is no restriction in asking for fatwa on any matter:
https://www.ghamidi.org/fatwa/
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plz sir clear it, sir Irfan Shahzad replied its permissible, and you also said that if it doesnt harm anyone then its halal, so sir you are a respectable scholar and sir irfan as well, so why you dont give fatwa even when you understand its permissible, sir see people like me dont know too much about Islam thats why ALLAH says ask the people who have knowledge, so you are the ones who have knowledge and I have clearly described this whole business model, nothing is hidden, so sir plz why I cant get fatwa?
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ok sir I have filled forum and also sent message to a phone number given to me after filliing forum,
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