Assalam o alaykum!
I hope you would be doing fine by the grace of Allah Almighty.
I have a query regarding the online trading whether it’s halal in Islam or not?
The procedure being followed in this online trading is as follows:
Any person who wants to carryout trade can open an account with that company and deposit money in their account. In return they create an online trading account for him and all of the money which you have paid to them appears in his online trading account. They also provide $50 as welcome gesture to the account opener or trader. This $50 can be used for trading purpose but cannot be withdrawn. In contrast, the money which one has deposited to carryout online trading can be withdrawn by him at any time.
Now you start trading in oil, gold, silver currencies, shares, stock exchange etc. If you have deposited $100 in your account, you may trade up to 2500-3000$. All of the profit earned by you will be transferred to your account and any loss will be deducted from your account. For example, if you trade gold worth of 2500$ while your account was having only 100$, if you lose 10$, your account will be $100-$10=$90 while if you earn $10, it will be $100+$10 = $110.
You can either buy or sell gold according to your desire. Even in the start if you have $100 in your account, you can sell gold for a price and if gold price decreases below that for which you have sold it, you may close the deal and the difference will be transferred to your account as profit.
I just want to clarify whether this process is halal in Islam or not? If you could give some examples or references as well, I would be highly grateful to you.
May Allah Almighty bless you in this life and hereafter for this guidance. JazakAllah o khairan katheera.
Your brother in Islam,
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuhu
You have explained that if one deposits $1000, he may trade up to $2500. You did not provide details of the $2500. Will this amount be a loan or a partnership. In distributing the profits and losses, what criteria is used in consideration of the $2500. Explain in detail.
And Allah Ta’āla Knows Best
Checked and approved by,
Mufti Ebrahim Desai