13 Jan IS TRADING BINARY OPTIONS HARAM OR HALAL?
Trade and commerce are daily activities and not at all wrong. But when it comes to illegal and unjust trading, it is certainly not acceptable in the eyes of law or god. Almost every Muslim options trader in the financial industry has this doubt in common whether online binary option trading is haram or halal? The vast advancement of Binary Options trading has opened up new opportunities for traders belonging to several races and creeds. Muslims being one-quarter of the entire world’s population, have also become active participants in the field of trade and commerce. The main point is that according to the Shariah law, it has forbidden to charge any sort of interest or “Riba” and is also considered to be a major sin in the eyes of God. Several brokers after having a discussion came up with the idea of “Halal” trading, or Islamic, trading accounts which would be beneficial not only for them but also for other traders. Here are the answers to some of the basic questions that almost every Muslim trader has regarding the collision of their religion with trading:
Is Binary Options Halal or Haram?
The Sharia Law is the ultimate guidance of every Muslim man. The principles of Islam cover all the important aspects of a Muslim man’s life whether it be their social or economic matters. The Sharia law has strictly forbidden the activity of charging interest while lending. According to Sharia law, accepting any sort of interest or charging for an overnight position is strict. Hence, in the case of the spot financial markets, the trading is carried out within 24 hours. All the positions of the open market are rolled over to the next cycle of 24 hours after the started 5 PM New York timing. The interest earned on the daily basis is transferred to the broker’s account. Still, despite the process of debit or credit being carried out by the accounts of the binary broker, the interest earned or paid during the transaction ends up making it a “haram” to the Muslim people. In the end, there is still a collision with religious beliefs.
· What is Riba in Binary Options trading?
Riba is the most concerning matter in Sharia law as well as Binary Options. The process of earning interest while trading in any trading positions is considered a sin and is strictly banned. No exceptions will be considered. If you accept any sort of interest from your broker on your overnight positions, you are simply earning “Riba” through the trading field of binary options. This will be considered as haram. But due to the efforts of some binary options brokers, this problem has been overcome with the introduction of halal trading accounts.
· Is Binary Options Gambling?
Technically, Binary Options is certainly gambling. But this is not applicable for all the forms of investment made. There has to be some sort of investment performed at some of the other points of time in some manner, maybe financially or in some other form. Investment is carried out by several bodies whether it be an individual, the government, different companies, or organizations. Hence, there has always been an argument regarding whether Binary Options is actually gambling or just an investment by keeping aside all the risks involved. Several strategies are used by professionals to manage the money they invest. They also chalk out a plan to carry out their trades in order to reduce the risk involved. This relatively helps them achieve more stable results over the time period. In order to become a successful trader, a systematic plan needs to be approached to minimize the risk involved. If you are able to do so, then no one can stop you from becoming a professional trader. Hence, if you perform the trade in a systematic manner it shall be considered halal.
· Is trading with Binary Options being greedy?
The laws of Islam are strictly against greed and jealousy. It all depends upon you while trading whether you are being greedy or not. This matter too is always considered to be a relevant discussion on the basis of surrounding finances. If you are capable of trading in a balanced and generous manner, then you have certainly not fallen to become prey to greed. Whereas, if you allow the trading process to totally overcome you, by disrupting your faith, believes, family, friends, and the community you belong to, then you are certainly committing a haram.
Halal Binary Options Brokers in Malaysia:
There are several Binary Options Brokers in Malaysia who respect the Sharia Law of trading. These brokers have the facilities of marketing specific types of account which operate as Halal. Some of the Binary Options are IQ Options, Ayrex, and BD Swiss.