Is Binary Option trading allowed in Islam?

Question:

As Salaam Alaykum Wa Rahmatullah,

My deep respect to all members of the Eshaykh staff.

I would like to know whether binary option trading is allowed in Islam. It is a type of trading where the trader purchases an item (currencies, commodities, etc.), if he thinks that the price of the given item will be higher than the current price and where he sells the item if he thinks that that the item’s price will be lower of the current price. If the trader is successful in his transaction, he receives a percentage profit and if he is unsuccessful he receives nothing. Thank you in advance for your enlightened viewpoint.

Answer:

wa `alaykum salam wa rahmatullahi wa barakatuh,

By explaining what is “gharar” in Islamic law and you will conclude for yourself whether binary option is halal or Haram. In this kind of trade there is uncertainty – either you get a lot of profit or nothing at all. This is “gharar” which is risky or hazardous sale where details of the sale commodities are unknown. Gharar is generally prohibited being excessively risky.

Imam Senad Agic
American Islamic Center – Chicago
www.aicchicago.com
www.imamsenadagic.com

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