What is the ruling on dealing in "stock options" which grant the buyer the right to purchase or sell a share at an agreed-upon price within a specified period?

Option contracts are modern contracts defined as an agreement that grants the owner the right to sell or buy something at a specific price within a specified period, in exchange for consideration. These contracts are divided into two main types:

1. Call option: Grants the buyer the right to purchase securities at a specified price within a certain period, without being obligated to buy, while the seller cannot retract after receiving the option's price (commission). 2. Put option: Grants the option buyer (owner of the securities) the right to sell securities at a specific price within a specified period, without being obligated to sell, while the recipient of the option's price is obligated to buy if the buyer decides to sell.

What is contracted upon in these contracts is merely the right to buy or sell at a specific price, not the assets themselves. This contract is binding on one party (the option seller) and non-binding on the other (the option buyer).

Islamic Fiqh councils have declared these contracts, in their current form, impermissible due to their inclusion of gharar (excessive uncertainty) and maysir (gambling). The Islamic Fiqh Academy and the Al-Baraka Seminar have affirmed that option contracts are not among the recognized Sharia-compliant contracts, and that what is contracted upon is neither property, nor benefit, nor a financial right that can be compensated for. Therefore, they are not permissible under Sharia law and their trading is not allowed.

Dr. Sami Al-Suwailem believes that these stock options are contracts of gharar because their function is dependent on price changes, which leads to one party profiting at the expense of the other, making them closer to gambling. He also considered them a type of commercial insurance contract based on gharar.

In summary: This type of transaction is prohibited, and it is not permissible to initiate or trade in it.