What is the ruling on working with a currency trading company where you deposit $500, and it grants you a trading balance of $200,000 (400 times the capital), and its commission is the fixed difference between the buying and selling price of currencies?
Trading currencies in this market involves numerous -related prohibitions. These include the fact that the broker or intermediary lends to the client either with interest or on condition of dealing through them, all of which is forbidden because it is a loan that draws a benefit, hence usury (riba). Most of what transpires in the currency speculation market is fictitious, as the intermediary does not possess the amount they deposit into the client's account, and possession does not occur until two business days later. Margin trading means the intermediary lends the client multiples of the amount with which they open the account, and what the intermediary takes and benefits from the client's transactions is considered usury because it results from the benefit of their loan; consequently, this transaction is forbidden.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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