As a matter of fact, religion plays an integral part in almost every field and every stage of life. Whether you buy it or not, but it surely does! Many people are themselves highly concerned to make all their approaches according to the teachings and guidance as per directed in their religion. A very common and highly discussed matter in all religions is to earn money through transparent ways what we call Halal in Islam. The top most priority of investors following Islam is undoubtedly to trade through Halal ways and avoiding to indulge with Haram (practices illegal in Islam).
Trading and business have got with them a complete set of principles in the light of Islam. At a broader level, Forex Trading has also been one of the phenomenon to be in the limelight as a point of questioning whether it is haram or halal in Islam.
What is Forex Trading?
Currently the world’s largest market with globally decentralized trading is the foreign exchange market. Keeping it more simple and clear, the market for trading currencies throughout the world, more likely to be known as Forex and the process called Forex Trading. Dealing with all the aspects of buying and selling and exchanging currencies, it works through financial institutions on different levels. It is the basic assistance for the international trade and investment through currency conversion.
Several countries from all over the world have been involved in this trade market through different aspects and strategies.
Is Forex Trading Haram in Islam
The perception of forex trading is quite controversial with respect to a particular school of thought in Islam. There is a frequent question asked by Muslims on this matter whether Forex Trading is Halaal or Haram in Islam. In the light of a general consensus, the situation where there is trading of one currency for other, such trading becomes permissible in Islam.
According to Islamic jurisprudence, the legal trading conditions based on Hadith and Sunnah all combine to two basic conditions that include ‘hand to hand’ and ‘equal for equal’ exchange. There have been long and disputed discussions on this issue for a long time and experts and jurists define the phenomenon of forex trading in Islam as a business to be careful with.
Mufti Taqi Usmani once quoted:
“Currencies are originally a medium of exchange and should only be exchanged for personal use in different countries. To make them a tradable commodity only for earning a profit is also against the basic philosophy of Islamic economics.”
Keeping in consideration various viewpoints from different Islamic jurists and scholars, there are some certain conditions, provided which forex trading becomes legal under the jurisprudence of Islam.
•The cost of trading or expenditure must be paid on time without extension.
•The buying and selling should be instantaneous or immediate without any delay that is known as spot on trading.
•In the case of trading through currencies, the money to be transferred should be done from the seller’s account to that of the buyer and vice versa.
•Any interest on the trade is considered haram in any case with respect to Islamic law.
Margin trading, calls, puts, straddle or any of its derivatives other than spot exchange are known to be unlawful and strictly prohibited in Islam.
So, look around! Satisfy your conscience with pure and clear ways of income through trading.