Is it permissible for a father to invest in the stock market with his son, on condition of sharing in the profit but not the loss? And is it permissible for the son to conceal the loss and compensate his father from his own money?
It is permissible to invest the father's money in a lawful project in exchange for a known percentage of the profit. It is also permissible to agree to stop the investment if a loss occurs. The loss is borne by the owner of the capital if the worker contributes only with his effort. It is not permissible to stipulate that the worker will not incur losses, nor to stipulate that he guarantees the capital or bears part of the loss. However, it is permissible for the worker to voluntarily compensate the capital owner for the profit or bear the loss without a prior condition. What the son takes from his father is not considered a loan, but rather a Mudarabah (profit-sharing) if he contributes only with his effort, or an Inan partnership if he contributes with both his money and effort. The father must be convinced that trade is based on profit and loss, or he should invest in low-risk financial instruments such as real estate investment or gold.
It is permissible to invest in pure shares of lawful activities that do not involve Riba (interest), and it is forbidden to trade in forbidden and mixed shares. It is forbidden to deposit money in interest-bearing banks with interest. It is not permissible to deposit it even without interest unless there is a fear of its loss and no other means of preserving it can be found.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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