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In the Name of God بسم الله

Plus 500 Trading app Halal/Haram

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Hi does anyone know if it’s halal/ haram to use the plus 500 trading app and buying into Oil/cryptocurrency/ non haram trades.

i follow Sayid Ali khamenei what’s the ruling on this? 

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As long as the company that you intend to buy shares in are not involved in any haram transactions (eg. gambling, riba, alcohol ect) then it’s halal. As for cryptocurrency, bitcoin and even forex in general, I would advice you to avoid them completely as they are highly speculative and merely based on price fluctuations. And unlike stocks, you are not investing your money on tangible assets that can potentially produce profit, such as commodities, gold, or R&D firms like biotech. 

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Jazak allah khayran 

yeah I wasn’t gonna do cryptocurrency was just an example also what if you put money into some company and later on you find out they use it for haram things? Also how can I avoid a situation like that?

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1 hour ago, Ali2196 said:

yeah I wasn’t gonna do cryptocurrency was just an example also what if you put money into some company and later on you find out they use it for haram things? Also how can I avoid a situation like that?

Honestly, I don't think you'd be able to invest in any Company if you were to deep dive into the list of things they do and whether or not those things are haram. Investing in any major Western Company would be questionable if I am to look at it this way.

As for using the app itself, no issues, avoid CFDs if you don't know what you are doing because otherwise it is as good as gambling. Shares you may go with basic research, they are a long term game anyway.

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36 minutes ago, Dreamcatcher said:

Honestly, I don't think you'd be able to invest in any Company if you were to deep dive into the list of things they do and whether or not those things are haram. Investing in any major Western Company would be questionable if I am to look at it this way.

As for using the app itself, no issues, avoid CFDs if you don't know what you are doing because otherwise it is as good as gambling. Shares you may go with basic research, they are a long term game anyway.

Okay so I downloaded it Since I got the okay to try it being halal. Well to be honest big disaster and all I did was a demo ahahaha I’m just gonna stick to construction 

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2 minutes ago, Ali2196 said:

Okay so I downloaded it Since I got the okay to try it being halal. Well to be honest big disaster and all I did was a demo ahahaha I’m just gonna stick to construction 

Takes months if not years of analytical skills, studying charts and what not. It's not that simple.

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On 5/28/2020 at 5:43 AM, Ali2196 said:

what if you put money into some company and later on you find out they use it for haram things? 

 In this situation,  assuming one had no previous knowledge that the company was involved in haram activities at the time when initially bought, then any gains that are accumulated from the book value that was initially invested is to be distributed to the poor, then the original amount can be reclaimed.  

Source: https://www.sistani.org/arabic/qa/02052/              

https://www.sistani.org/arabic/qa/0523/    

Quote

Also how can I avoid a situation like that?

 Use your judgement and your best intentions to research the company thoroughly before you are confident to put your money in it. For example, look into the nature of it’s business (eg. do they profit from halal or haram means?), it’s history of transactions and even the directors and CEOs (eg. Trump) if the information can be obtained. Moreover, the majority of companies traded in the international exchanges are categorized into three categories:  

Category 1: These are companies that are publicly known to earn the majority of their profits from haram transactions. Examples of such companies include banks, wine breweries and those that are involved in the music and film industry. In this case, investing in such companies is haram.  

Category 2: These are companies that are publicly known to earn all of their profits completely from halal transactions and there is no apparent evidence of them being involved in haram activities, even upon further examination. Examples of such companies are those that invest in commodities (oil, minerals, gold ect), telecommunications, utilities, technology or R&D (eg. health and biotech). In this case, investing in such companies is halal.  

Category 3: Companies that earn their a partial of their profits from haram transactions, even if the percentage of the haram transactions are small compared to the halal. I believe this is where some scholars differed. According to Sayed Sistani, it is also haram to invest in these companies.

For example:

 - Food retailers that serve non-halal food (eg. Walmart, McDonalds, ect)

- Clothing companies that promote haram pictures of women and men in their ads. (majority of clothing brands in the west)

- Transportations companies that are known to transport alcohol (eg. Amazon, Uber and cargo companies)

- Airlines and hotels that are known to sell alcohol

- Mutual funds, index funds, ETFs, bonds and RRSPs since the money invested in all of these funds is allocated to companies that include those involved in haram businesses.

Finally,  keep in mind that khums is also applicable to annual profits.  

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On 5/28/2020 at 9:56 AM, Al-Hassan said:

 In this situation,  assuming one had no previous knowledge that the company was involved in haram activities at the time when initially bought, then any gains that are accumulated from the book value that was initially invested is to be distributed to the poor, then the original amount can be reclaimed.  

Source: https://www.sistani.org/arabic/qa/02052/              

https://www.sistani.org/arabic/qa/0523/    

 Use your judgement and your best intentions to research the company thoroughly before you are confident to put your money in it. For example, look into the nature of it’s business (eg. do they profit from halal or haram means?), it’s history of transactions and even the directors and CEOs (eg. Trump) if the information can be obtained. Moreover, the majority of companies traded in the international exchanges are categorized into three categories:  

Category 1: These are companies that are publicly known to earn the majority of their profits from haram transactions. Examples of such companies include banks, wine breweries and those that are involved in the music and film industry. In this case, investing in such companies is haram.  

Category 2: These are companies that are publicly known to earn all of their profits completely from halal transactions and there is no apparent evidence of them being involved in haram activities, even upon further examination. Examples of such companies are those that invest in commodities (oil, minerals, gold ect), telecommunications, utilities, technology or R&D (eg. health and biotech). In this case, investing in such companies is halal.  

Category 3: Companies that earn their a partial of their profits from haram transactions, even if the percentage of the haram transactions are small compared to the halal. I believe this is where some scholars differed. According to Sayed Sistani, it is also haram to invest in these companies.

For example:

 - Food retailers that serve non-halal food (eg. Walmart, McDonalds, ect)

- Clothing companies that promote haram pictures of women and men in their ads. (majority of clothing brands in the west)

- Transportations companies that are known to transport alcohol (eg. Amazon, Uber and cargo companies)

- Airlines and hotels that are known to sell alcohol

- Mutual funds, index funds, ETFs, bonds and RRSPs since the money invested in all of these funds is allocated to companies that include those involved in haram businesses.

Finally,  keep in mind that khums is also applicable to annual profits.  

Thank you very much I made this post so others can benefit from it too if they wanted to know halal/haram and how to avoid such situations. 

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  • 2 weeks later...
Guest summuh

@Al-Hassan @Dreamcatcher @everyone

Salam, 

Slightly related to the above topic: What are the rulings on things like:

- option trading (call/puts)

- short selling

- day trading

Any help is appreciated (and the above post is also greatly appreciated, thank you)

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Posted (edited)
3 hours ago, Guest summuh said:

@Al-Hassan @Dreamcatcher @everyone

Salam, 

Slightly related to the above topic: What are the rulings on things like:

- option trading (call/puts)

- short selling

- day trading

Any help is appreciated (and the above post is also greatly appreciated, thank you)

Wa'Salam,

- Option trading is extremely risky and I will call it straight out gambling because in other CFDs, you may look at bigger time frames and thus able to deduce it better, you cannot do that in short times which is what calls/puts usually are.  In addition, its straight win or lose, betting the entire money. You will either gain 90% or lose it all. With other CFDs, you can get out anytime you want, you may end up with 30% profit or 100% profit, may end up with 0% profit or go in loss at any percentage. I don't think any Marja would allow it as Halal.

- Short selling is again quite questionable and won't be allowed.

- Day trading, I don't see a problem.

These are my personal opinions and you need to refer to your Marja for opinions to be valid.

Edited by Dreamcatcher
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