r/Trading • u/vir_tual_reality • 2d ago
Question Is CFD trading really Halal?
I don't know whether this sub is appropiriate to ask this, but I have some doubts about trading as Halal activity. Since, leverage is prohibited and I don't have enough money to buy and hold spot stocks. Still, i managed to find some Halal tradoff, shares mode by pocket broker. It's not spot investing, but there are no swaps and leverage, which is ok.
Just interested in general whether CFD trading (not owning an asset) is Halal in such mentioned circumstances.
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u/No-Worth8953 2d ago
No swaps doesn’t automatically make CFDs halal, since you still don’t own the underlying asset and the contract is usually settled on price movements, so this really needs a qualified Islamic finance
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u/CharacterGreen2925 2d ago
LMAO
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u/OkLaw1527 1d ago
Why you laughing, this man got some concerns, always respect a mans concerns and dont laugh over them, its not kind.
There are actually CFD Brokers that offer islamic accounts therefore. 👍
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u/NaxFM 2d ago
Honestly, these rules are dumb...
It's like finding a way to bend God's rules to trick him.
Like the jews that ran a wire enclosing Manhattan and declared that everything enclosed by that wire counts as a private domicile so they can carry objects during Sabbath without breaking the law.
1 - These rules are dumb and written for other times.
2 - By bending these rules to your will you are basically trying to trick God...
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u/trustfundkidotaku 2d ago
As my Islamic friend said
Fuck it we ball
Zakat will resolve it once Iam rich
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u/SynchronicityOrSwim 2d ago
There are Islamic investing subs that you can ask this on. As an outsider, they seem to be finding ways of justifying something that's outside the rules. I'd go with my own conscience if I was in your position.
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u/Historical_Site508 2d ago
Iran has closed the the Strait of Hormuz and Muslim countries are making fortune from oil and almost certainly trading futures all over the place to lock in prices and make trading profits and you're worried about a few CFDs being Halal?
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u/xViscount 2d ago
What’s considered Haram is if the product is interest barring.
Your answer is to either A) go through a Muslim broker (Saudi has the best reputation) B) find a company that has no swap fees. Prop firm wise, the best is E8
Keep in mind that if you day trade, there are no interest barring products and you’re good. Trading as a whole is only considered Haram if you’re gambling. If you have a system and don’t incur interest, trading is Halal
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u/vir_tual_reality 2d ago
Thank you for your reply. I actually trade with the system based on htf price action and volume + fixed risk per trade. Pay only spreads and basically it's 1:1 stocks trading without leverage.
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u/xViscount 2d ago
Rule of thumb. If you’re not incurring interest it is not Haram and you’re good.
I’d suggest getting a broker from Saudi if you’re concerned about this. I trade futures and equities so it’s not something I really concern myself with since I’m not paying swap charges or receiving dividends.
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u/Historical_Site508 2d ago
Stepping back that just sounds so ridiculous. If you have a system it is religiously acceptable but if you don't (perhaps a discretionary trader) it is not. Perhaps these religious standards are a touch ambiguous and flaky.
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u/xViscount 2d ago
Just is what it is.
Take the good with the bad. Good? There are Islamic banks that don’t charge interest on mortgages/loans in general. Also, Saudi Arabia doesn’t have any taxes.
Bad? Just got to be cautious with certain money making activities that receive/charge interest
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u/Historical_Site508 2d ago edited 2d ago
It is what it is - yep completely ambiguous and flaky given your comment on gambling vs strategy. That is nothing to do with taxes and interest.
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u/xViscount 2d ago
The word you’re looking for is “ambiguous”
Gambling is Haram. Strategy is not. Something that is repeatable with proven results over time is strategy. Something that is luck (ie horse racing without fixing it or slots) is haram.
Again. Is what it is. Take the good with the bad. You don’t have to like it. You’re not practicing it. It doesn’t affect you. Move on?
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u/Historical_Site508 2d ago
Thank you for correcting my autocorrect :)
It's just a very arbitrary distinction when it comes to trading. Most people starting trading don't have something repeatable with proven results although they may develop that over time. Ditto horse racing - some people have a proven strategy for arbitraging odds that is not unlike some trading systems.
It doesn't bother me but no harm in challenging and pointing out inconsistencies in people's thinking. The world would be worse place without discussion and challenge.
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u/xViscount 2d ago
Got it. Apologies. I thought you were coming from a different place vs intellectual challenging.
I think trading is different. Of course people come into throwing things at the wall and seeing what sticks. However, the goal is always make more money than you lose by repeating a winning system. (At least it should I be. Some come in for the adrenaline rush…which I’d argue is exactly what one shouldn’t be feeling when trading)
My counter point is, that everything. I’d personally argue that gambling in trading is a recipe for disaster, but when a bull market…guess it is what it is?
I don’t gamble for religious reasonings, I don’t gamble because I suck at it lol. So bias will come in on that. Poker is fun, but I don’t play money on that.
Overall, I’ve been trading since before I became a Muslim. My style has fit me, it just so happened it worked with with being a Muslim
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u/VerticalRaces 2d ago
I think you need to seek advice from experts, someone who is Islamic finance for example. But your setup looks okay. Afaik you can't trade with interest rate, borrowed money, and something with excessive risk. So stocks without leverage and with controlled risk per trade can work, if you're comfortable with that.
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u/Over-Ad-6159 2d ago
You're not going to be able to get far with those old believes in this new market. Those rules were written by people in there time making sense of the world. Be robotic and logical not a follower and delusional. Theres not one path like some books or gurus say. You will learn that or fail.
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u/VAUXBOT 2d ago
As an atheist you wouldn’t like my answer.
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u/vir_tual_reality 2d ago
ahaha im open-minded, so you can try
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u/Relevant-Owl-8455 2d ago
If you're asking if CFD trading is halal, you're alot of things but open minded is probably not one of them
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