Back to search
The question

Is it impermissible to use leverage in forex, even though it does not involve a real loan or borrowing any money, but is merely a feature that allows trading with original capital with the possibility of greater profit or loss? And how can it be usury (riba) or a loan that brings benefit in this case?

Share this answer

Source: FtawySummary from Ftawy's records · added here Sep 2, 20261 min readAlso available in العربية
The answer

What the questioner described as a feature allowing risk-taking in money trading is in the ruling of a guaranteed loan. If the broker stipulated that transactions must only be conducted through him, he has drawn a benefit for himself. Since this money is not real money that can be withdrawn, the transaction is invalid and forbidden, because the broker does not truly own the leveraged funds. The reality of the contract is that the broker lent the client what he did not possess, and the client sold what he did not own, combined with a condition and a loan. All of this is prohibited based on the Prophet's (peace be upon him) saying: "It is not permissible to have a loan and a sale, nor two conditions in a sale, nor profit from what you have not guaranteed, nor to sell what you do not possess."

Summary from Ftawy's records · added here

Reviewed by El Fatwa's sharia committee.

Read the full answer on Ftawy
Where this answer came from
Source platform
Ftawy
Original fatwa ID
187523
Added here
. This is when the answer was added to El Fatwa, not the fatwa's date.
Text
Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
Read the full ruling
Read the full answer on Ftawy