I indulge in what is known in the states as Day Trading. I buy and sell shares but not on a daily basis as they do in the states or as the term Day Trading implies. I trade on a settlement margin of 20 days i.e. after 20 days I have to either buy the shares or sell the shares.
Most of the time I have the capital to hold the shares. So after 20 days I pay up and hold the shares on what I term as long term investment. Other times I purchase shares on a pure speculative basis. i.e. I buy shares that I do not have the capital to hold after 20 days. On speculative purchases I carry out extensive research on the company whose shares I am proposing to buy before I purchase the shares and therefore it is never a shot in the dark or a punt. Sometimes my speculations prove very profitable and on others I have made a loss.
It is this speculative aspect of trading that I do not find comfortable. Although I do extensive research to minimise the risk it is however never risk free and I ask myself that is this not akin to gambling.
Finally I do not buy stock and shares in Banks, Breweries and other companies, which I consider unethical or plain haram .
Here is my question to you. Is speculating on stock and shares the way I have described it akin to gambling?
Your views will be greatly appreciated.
[This message has been edited by Kajoor (edited December 03, 2000).]
This might not be the opinion of scholars across the board, but it is the opinion of majority of the islamic sources that i have studied, and it makes sense to me as well. Hence i follow it.
Buying and selling of stocks, whether long term or short term, is not haram. What would make it haram are the types of companies u mentioned above, margin accounts and short trading. Margin accounts involve interest, and short trading involves directly capitalizing on the losses of others, which is a forbidden practice.
However, as mentioned above, ur best route is to ask a scholar, and go through as many avenues as possible before u understand the rulings.
You had submitted the attached question at “Understanding Islam”.
The simple principle that you should keep in mind is that if you are buying
shares according to their ‘present’ market value, even if you have to make
the payment (or sell these shares off) after 20 (or more or less) days, then
there is nothing wrong with such a transaction. However, if in such a
transaction, the purchase is not made at the ‘present’ market value, then it
either involves ‘future trading’ or it involves an element of ‘Riba’
(interest). In either case, Islam would then not approve of such a
transaction.
Thanks not needed, as it was you who directed to the site. The answer is in line with what Akif had said also. I have a clear understanding now but should I ask a few other scholars to be absolutely certain?
Nomaan thank you as well, I contacted the website you advised but I could not put the question to the Imam because they only allow certain number of question that can be submitted each day. I unfortunately so far missed the quota. No fear I will try again.
Once again thanks everyone.
[This message has been edited by Kajoor (edited December 05, 2000).]
Kajoor.
We all employ different forms of logic to run our lives. One of the basic laws regarding Islamic rulings is that you have to understand it and be sure of it…meaning, it has to make sense to you. If a scholar tells u about something being right, and u follow it without being fully convinced of it, that will only serve that scholars’ interests. It wont serve Islams’ interest, and it wont serve your interest.
You can go to as many sources as you want, and ask as many scholars as you want…but whatever answers u get from them, have to make sense to you as well. If I dont understand the logic behind a certain ruling passed by a scholar, I dont follow it. I keep on searching for more answers and more clues. And if something makes sense to me the first time, I stick by it, even though there might be a million and one interpretations of that ruling out there in the world
I cannot really add anything else to what Akif has rightfully pointed out. It is really your choice. If you do want to ask somebody else, then you will need to go to somebody who really knows what he/she is talking about. For some people, financial markets are not their forte. That is why I felt that this above scholar would do some justice to your query.
Akif is right. If you feel satisfied and have a clear understanding of the issue, then there really should be no problem. But if you do want some feedback, show the response of the above scholar to other people who you feel should be asked. If they agree, then there really should be no problem. If not, you have to ask why. Demand an explanation. Understanding is the key to the solution. Then return their response to the above scholar and see what he makes of it.
Yes it really is a question of fully understanding something and making sure its clear in your mind before you can arrive at what you hope is the right decision. When we stand before Allah(swt) on judgement day, we will be judged on the path we choose for ourselves, the decisions we made for ourselves and not, which scholar we followed or listened to.
What troubled me the most, was this whole idea of speculation and in particular the risk element involved in buying stocks and shares. At this moment in time the stock markets are very volatile so buying shares now would in my opinion be very risky. So when the risk increases then the chance of making losses increases. Now making a loss itself would not be haram but the element of chance that now comes into play made me feel it was it was akin to gambling.
I now want study what Islam says about risk and chance and then apply it to my situation. Like you both have said it is matter of understanding and satisfying myself and not really question of how many scholars I ask.
[This message has been edited by Kajoor (edited December 05, 2000).]
Because, from what I see. Having FUN is an act of Satan, and Allah doesn't like people having fun, afterall Muslims are servants of Allah, and they should all be working, and not playing or procrasticnating.
Who cares about Pakistani politics anyway, it stinks worst than a gutter. All the Pakistani leaders pronounce the word 'Politics' as 'pai lutto kisey' and who ever is in power, is always busy filling up the swiss banks.
One leader after another has been coming to power by stabbing the one before him in the back. AND YOU CALL IT POLITICS?????
You obviously seem to care and know so much about Pakistani politics. It must be really infuriating you, so much that it’s blinding you. You cannot see that you are in the wrong forum. It would be better if you take your garbage and yourself to the political forum. We can discuss Pakistani politics there, rather than shielding in this forum like a COWard that you are.
That reference was made because aria confessed that he had little knowledge of Pakistani politics. That was a fact, which I stated. Check it out in the political forum. It was a valid link because his knowledge was also limited with respect to Islam and in particular to this thread. Again I reiterate, this is not a political forum. The topic of this thread is clearly stated. If you want to discuss that be my guest.