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What is the Islamic legal ruling on equally sharing losses in stock market speculation (mudarabah), knowing that the main reason for the loss was the brokerage firm's violation of trading law, and must the speculator bear the entire loss?

1 min readAlso available in العربية

Disputed matters belong in the Sharia courts or their equivalents, so that they can be heard from all parties to the dispute and the truth of the claims, evidence, and defenses can be ascertained. As for the Mufti, he only hears from one party. In a legitimate Mudaraba (profit-sharing partnership), if a loss occurs, both the Mudarib (manager) and the capital owner lose what they contributed. The Mudarib does not guarantee any of the money unless there is transgression or negligence. This ruling does not change even if the capital owner stipulates to the Mudarib, or the Mudarib stipulates to himself, that he will share in the loss; this condition is null and void by the consensus of jurists, and the contract remains valid according to the majority. Therefore, the worker is not obligated to pay anything from this money, unless the loss was due to his transgression or negligence.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

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