Question Summary:
The money is invested in the forex and the commodities market

Question Detail:

Clarification to question in Fatwa # 14850  
Assalam’alaykum wa’rahmatulaahi wa barakaatu

The dealer receives money from people wishing to invest. The money is invested in the forex and the commodities market. Commodities like coffee, oil and copper are bought and then sold. This is done by the experienced dealer who knows how the markets move up and down as he has spent many years studying them, so they are pre-empted. He buys and sells at the right time, which is when the profits are made. He then gives the investors their money back with the profit made. For example a person gives £10,000 and using this money he buys and sells which enable him to make a profit and the money is returned with the extra profit made. It could be £13,000, £14,000 etc. Could you explain to me in detail if this is permissible, as it needs to be explained to potential and current investors.
Wa’laykum asalaam
 

 
 

Answer :

In the name of Allah, Most Gracious, Most Merciful

You request a detailed answer to your query. That is not possible as you did not explain in detail the nature of the transactions. This issue is not as simple as you explain. The following issues need consideration.

1.    What type of transaction the dealer enters into with the investors?
2.    Where is the money invested?
3.    How is it done, physically or through internet?
4.    If it is done through internet, who is on the other side?
5.    Is there a physical possession of money and exchange?
6.    What type of currency is used, same or different?
7.    Are the commodities available and how is it exchanged?

If we have a detailed question, we will be able to assist, Inshallah.

And Allah knows best

Wassalam

Mufti Ebrahim Desai
Darul Iftaa, Madrassah In'aamiyyah