Islamic scholars on trading: halal or haram?

Online trading is booming right now. Millions of people worldwide flock to financial markets, trying to make trading an additional income source for their families. Naturally, many people of the Islamic faith also want to participate—but some still hesitate, unsure whether trading is actually allowed (halal) for Muslims. 

Is trading halal according to Islam?

Islam permits for-profit financial operations, including trading. However, most Muslim traders need special trading conditions to keep their trading experience ethical and Sharia-compliant. While different schools of Islamic thought have slightly different views on what's permissible and what's not, the three key principles of halal trading are commonly agreed upon.

• No riba (usury). Financial transactions should be free from any form of interest. In online trading, it usually suggests you avoid using swaps which involve paying or receiving swap fees for holding your positions overnight.
• No maysir (gambling). No profit should be made through games of chance. It suggests that you trade only on real markets with real-time prices. This way, you can always put in some effort and learn how to better predict price movements instead of guessing and relying on mere luck.
• No gharar (uncertainty). All trades should be clear and fair. This rule suggests you should trade only known instruments on clear terms without postponing the transaction—prohibiting forward or option contracts. Gharar can also mean excessive risk, interpreted usually as using too extreme leverage rates or choosing too volatile assets.

Octa strictly adheres to these principles to provide the best halal trading experience on the market. There are no swaps, no manipulation with prices, and no deceit—only permissible instruments with tight spreads and convenient trading tools. Learn about Octa's Islamic accounts and discover your unique halal trading opportunities.

Is trading on Forex pairs halal?

Yes. Dealing in currencies is permissible as long as the exchange takes place on the spot. Making profit from such operations is also permissible. Of course, the key principles should still be met: no interest, no gambling, and no excessive risks are allowed.

Is trading on crypto halal?

Mostly yes. Cryptocurrencies are mostly viewed as a particular variety of traditional currencies now, so trading crypto is halal in principle. However, some scholars frown upon too volatile altcoins, condemning them for excessive risk. If you share this opinion, stick to the most reliable and widely accepted options, such as Bitcoin, Ethereum, or Solana.

Is trading on gold and other commodities halal?

Yes. Gold and silver can be traded as long as the exchange takes place on the spot without delays and with transparent conditions to avoid excessive uncertainty. Trading on other commodities is also halal.

Is trading on stocks and indices halal?

Yes. Trading on stocks is halal as long as you're not dealing with companies involved in haram activities, such as alcohol production or betting. Since indices are basically baskets of stocks, trading on indices is permissible as well. However, you might need to do some research in case you have doubts about some particular instrument.

Islamic scholars on trading: is it halal or not?

While the basic principles of halal trading are shared almost universally across the Muslim world, national Islamic councils might have their own opinions on certain instruments.

	MUI (Indonesia)	MUIS (Singapore)	MKI (Malaysia)
Currency pairs	halal	halal	halal
Commodities	halal	halal	halal
Stocks	halal	halal	halal
Indices	halal	halal	halal
Cryptocurrencies	haram*	halal	halal

* Legal yet currently not recommended by MUI due to volatility. Use risk management tools or choose other instruments.

MUI (Ulama Council of Indonesia) on trading

MUI, Indonesia's top council of Islamic scholars, published the Fatwa No.28/DSN-MUI/III/2002 concerning buying and selling currencies in March 2002. The document proclaimed exchanging currency permissible, but only under certain conditions:

• no gambling involved—in the sense of relying on sheer luck, not analysis
• transactions done at the actual exchange rate at the time of the transaction
• only spot transactions settled within 2 days allowed—no forwards or swaps.

As you can see, trading with Octa actually meets these conditions. There's no gambling—you can always see and analyse actual market prices for better outcomes. Orders are executed almost instantly at market exchange rates. Finally, there are no swaps, so you don't pay or receive any interest.

In 2024, the MUI Fatwa Commission member KH. Dr. Fatihun Nada clarified the official stance on trading: Forex trading is halal with the spot system, while using forwards, swaps, or options is haram. He added, however, that crypto trading is currently considered haram by the committee due to excessive uncertainty associated with such instruments.

Major cryptocurrencies, such as Bitcoin or Ethereum, are much less risky than smaller altcoins. Traders use them even for long-term investments now. However, if you want to fully adhere to MUI guidelines, you can always avoid trading cryptocurrencies and focus on other instruments provided by Octa, such as currency pairs or gold.

MUIS (Islamic Council of Singapore) on trading

MUIS, also known as the Islamic Religious Council of Singapore (IRCS), is the main committee managing Muslim affairs in the country, including halal certification. According to MUIS, trading is basically halal:

With Octa, your transactions get executed in under 0.1 seconds, ensuring that your experience stays fully compliant with these requirements. That means you can consider trading with Octa halal.

MKI (National Islamic Council of Malaysia) on trading

MKI, the central committee for managing Islamic affairs in Malaysia, allows trading on electronic platforms under certain conditions:

• both parties willing and able to execute the transaction (Ahliyyah al-Ta'aqud)
• transactions done at a certain price known to both parties and without delays
• only spot transactions allowed—but no options (Khiyar al-Shart) permissible.

Octa's trading conditions fully satisfy these requirements. You always get full information about tradable instruments, trade at actual market prices, and enjoy near-instant execution in under 0.1 seconds. That means trading with Octa can be considered halal by these standards.

How do you make sure your trading is halal?

To ensure that your trading experience stays fully Sharia-compliant, Octa has developed special Islamic accounts tailored for Muslim traders. You get no swaps, carefully chosen halal instruments, an extensive library of educational materials to help you grow, and a variety of risk management tools to manage and control market risks. Moreover, you can trade on the go via a unique halal trading application with trading ideas tailored to your interests, built-in AI tools, and a vibrant community of like-minded traders.

While Octa strives to provide only Muslim-friendly services, you may still have doubts whether a certain instrument or trading strategy is suitable for your personal beliefs. In such cases, consult some religious authority you trust or contact our 24/7 Customer Support for more information.