Are Stock Options Halal – Ask Shaykh YQ #234

Yasir Qadhi


Channel: Yasir Qadhi


File Size: 4.07MB

Share Page


AI: Summary © The speaker discusses the issue of stock options in moderniteries, where parties are trying to win by purchasing something, but they are not willing to commit to something. This is due to uncertainty and a lack of certainty in the future. The majority position is that options are not allowed because of these uncertainties.
AI: Transcript ©
00:00:00--> 00:00:29

Brother Mustafa from Bangladesh emails and says our stock options halaal or stock options halaal. Once again, this is rapid q&a. So I'm going to quickly go over this maybe one day I'll go into a lot more detail 107 I mean Kobe league in Ilari Jalan No, he lay him first IRLO recovery

00:00:36--> 00:01:20

but for those who are not aware, an option is a contract between two parties that gives the buyer the right to buy or sell the security at a predetermined price on or before a predetermined date. So it gives you the right, but you don't have to do that. It gives you the option. But it does is it is not something that is obligatory on you. And in essence, what happens is that two people are basically gambling against each other one party wants or hopes that the price will go up and the other party wants or hopes that the price will go down. And so they're kind of betting against each other. That's the only reason why the two would do this. And because of this, the vast majority of

00:01:20--> 00:02:06

modern scholars, including the field Academy Counsel of the robot of the OYC, including the European fatwa Council, including the University respected body of Islamic economics and finance fat was the AOP a RFI is called the EO fee. And many other scholars. In fact, this is the default position of pretty much everybody that is respected in the field that they have all ruled that options are impermissible haram under the shadow. And this is because there are multiple problems involved with this contract most significantly is the issue of uncertainty or a quarter and also the you basically you do not know you are not actually there is an element of uncertainty, you do not know what

00:02:06--> 00:02:46

exactly you are having each one is betting against the other. And this is another problem that there's an element of MMR or gambling. And the two parties are both expecting the other two to lose, and one of them will win. So it's a zero sum game, where one basically takes all and the other party basically goes into a loss. And this is in contrast to the one who purchases stock directly. The one who purchases stock is a part owner, and he wants the company to flourish, and he's expecting the stock to go up. He doesn't know the future. But the point is, he's a part owner and if the company goes up Alhamdulillah pseudocyst profit if it goes down well then that's the collective loss that

00:02:46--> 00:03:09

they all share. He's not betting against another person and there's no uncertainty that would be haram over here. And therefore, the majority position the default position is that stock options are not allowed because there is a level of Islamic uncertainty horror and a level of Kumar or gambling and ALLAH SubhanA wa Tada knows best. Yeah, man