I receive many questions regarding various financial dealings & their Islamic Rulings especially in light of my Master's connection to Liquidity Management & my PhD's connection to Risk management. I will answer these questions in this thread IA. #invest #money #Islam #Banking

#Options- Impermissible- as any transaction with ambiguous outcomes due to betting on the likelihood of a future event, and considered to be a 'zero-sum' transaction, in which one party can only financially benefit from the trade; are impermissible in Islam.

In terms of a zero-sum transaction, the above tweet should read: "in which one party can only financially benefit from the trade at the expense of the counter-party".

#forextrading- In short; it would be impermissible via a Market-Maker if it involved any of the following:

1. Interest paid on lots that are held overnight.
2- A Margin- a loan in order to trade.
3- A pip spread before any profits are realized.
4- Leverage based trade.

Derivitive based #Futures & #Forwards- Impermissible due to high levels of gharar (ambiguity) and it mostly used as a process of betting against future price differences with no counter party interest in any underlying assets.

#Bonds- Impermissible as these are interest based debt securities and fall under the catagory of 'Riba' (Interest) based transactions.

Commercial #Insurance- Impermissible, as it is a zero-sum transaction and entails a gamble, as well as high levels of ambiguity. However, through local scholarly consideration, it may be ruled permissible as an exception due to unique circumstances as discussed in Islamic Fiqh.

Commercial #lotteries- Impermissible if it entails paying an amount, or purchasing a product, or calling a number with hire tariffs in order to be part of the draw, due to it being a zero-sum transaction, a gamble, and an exchange with unacceptable levels of ambiguity.

The concept of receiving #points for purchases which can then be used to receive discounts when certain conditions are met, like we find with certain supermarkets, is permissible, as long as the underlying transactions are considered halal.

Purchasing #discount #vouchers and apps such as 'Entertainer' are permissible as long as certain conditions are met. These conditions are cited here: https://www.sajidumar.com/ruling-regarding-the-purchase-of-discount-booklets-apps-and-coupons-%E2%80%8B/

Bank Guarantees are permissible, especially if the norm mandates them, however on condition that the guarantee covers funds already available (not overdrafts), to ensure that the guarantee will not transform into a Riba (Interest) transaction in the future.