What is the ruling on Contracts for Difference (CFDs) which are based on benefiting from the fluctuation of stock prices without actually owning them? Is it permissible to circumvent this by trading "pens" named after companies whose prices fluctuate like the prices of the shares of those companies? What is the ruling on a buyer selling pens that have become his property as gifts, and then buying them when their price drops, knowing that selling before buying is forbidden?

Short selling, or "بيع على المكشوف" in Arabic, is surrounded by several Sharia (definition)-related prohibitions, including: selling what one does not own, and the forbidden benefit in a loan, which occurs when the lender benefits from distributing the borrowed shares. Additionally, there is a commission paid by the investor to the broker. Due to these issues, the International Islamic Fiqh Academy decided to prohibit short selling, as it is impermissible to sell a share that the seller does not own, but rather receives a promise from the broker to lend him the share.