Resolved Question: Is Binary options Halal or haram?
Question
Mohmmad asks: ()
Binary options are traded through websites such as www.anyoption.com, www.startoption.com etc.. I just want to know that weather Binary option it is permissible in Islam or not. The trading system is like, if you think that the price of a selected market such as “FTSE100″ or “Barclays” will go up or down. If your prediction or your study is correct, then you get a fixed return such as 69% – 81% or if your wrong you get a return of either nothing or up to 15%. The trading it self is based on timing and accuracy, so the option can be expired in 30 mins, 1 hour, 1 day, 1 week, 1 month or 1 year.
Now i know that betting is haram in Islam, and I also know this as well that prediction is not premissionable. But is BINARY OPTION it self a trade or gambling..
Please i want know from some Islamic scholars or maybe a trader who knows stock trading and Binary Options Trading as well as Islam as well.
I would really appreciate that.. and it might help other people as well.
Answers
Forex And Islam – The Rules Of Islamic Forex
Islamic laws or Shar”ah does not allow Muslims to trade Forex or any other financial market in the way that a non Muslim does. According to Islamic law, one is not allowed to give or receive interest payments on any of their transactions.
Now, you are probably thinking: “Wait, Islam is a religion, what could a religion possibly have to do with the Forex market?” The answer is simple. Islamic laws or Shar”ah does not allow Muslims to trade Forex or any other financial market in the way that a non Muslim does.
The main difference between a standard Forex broker/account and an Islamic Forex account and the service offered by Islamic Forex brokers is the interest involved in trading. According to Islamic law, one is not allowed to give or receive interest payments on any of their transactions.
In Forex, there is interest in many steps along the way. For example, when leaving your positions open overnight, there are what is called rollover fees, which are basically interest payments for not closing your trades at the end of the day. In Islamic Forex account, there are no rollover fees.
However, it is not that simple, because if it was, everyone would open an account with an Islamic Forex broker. There are of course some minuses to Islamic Forex trading. These disadvantages sometimes show their face in the form of higher commissions, stricter rules or in a variety of other ways.
The Islamic Forex community enforces the strict observance of Islamic law by making sure that every Islamic financial institution appoints an independent religious advisory council, that will guide the organization’s business practices and transactions.
The members of the council are authorized to issue fatawah, or religious rulings, regarding the institution’s practices. They are therefore generally experts of both Islam and economics, with experience in banking and finance.
In the Forex broker industry, there are countless Islamic Forex brokers as well as regular Forex brokers who offer their customers the ability to open an Islamic Forex account.
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