Question
I had a question regarding the trading of shares using this method.
Please can you examine the content on the website below and let me know as to its permissibility with details.
Basically, from my understanding, you are selling the right to someone to buy a share off you at a later date at the current price. Look forward to hearing from you shortly.
http://www.cashforlifesystem.co.uk/
Answer
Muhtaram / Muhtaramah
In the Name of Allāh, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāh wa-barakātuh.
We have examined the content on the website referred to in the query. We understand that the Company guides its clients in dealing with options and helps them in making the right decision to avoid loss and gain profit.
An option is the right to buy or sell a certain item at a fixed price within a certain date. It is not recognized as a tangible asset in Shari’ah; hence, it will not be permissible to buy or sell an option.
Moreover, Shari’ah has prohibited the sale of ‘Urban as understood from the Narration of Nabi (Sallallahu ‘Alaihi Wasallam) mentioned hereunder:
عَنْ عَمْرِو بْنِ شُعَيْبٍ عَنْ أَبِيهِ عَنْ جَدِّهِ أَنَّهُ قَالَ نَهَى رَسُولُ اللَّهِ -صلى الله عليه وسلم- عَنْ بَيْعِ الْعُرْبَانِ. (رواه ابو داؤد)
It has been narrated on the authority of ‘Amr bin Sh’aib, who narrates from his father, who in tur narrates from his grandfather that Nabi (Sallallahu ‘Alaihi Wasallam) forbade one from the sale of ‘Urban. (Abu Dawwod)
‘Urban (also known as ‘Urboon) is a sale wherein the purchaser pays a certain amount to the seller to reserve the right to purchase the item. Thereafter, if he goes ahead with the sale and decides to purchase the item, he will pay the remainder amount and purchase the item; but if he decides not to purchase the item, the amount will not be returned to the purchaser. Dealing in options is also similar to this sale wherein a person reserves the right (option) to buy a certain item, but may not conclude the sale if the circumstances are not in his favour.
And Allah knows best
Darul Iftaa
Madrasah Inaa’miyyah
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