Is it permissible to deal with a brokerage company that allows margin trading in currencies, knowing that it does not charge interest for covering the transaction (the margin), and if it is impermissible, is it permissible to continue with it to recover the capital?
The forbidden aspect in brokerage firms is lending the client a multiplied balance against their investment of funds through the firm, because "every loan that draws a benefit stipulated in the loan contract is usury (riba)." However, if the investor deposits their money with the firm for speculation in buying and selling currencies, without stipulating a loan to them, or lending them without stip stipulating dealing through the firm, and the firm executes their buy and sell orders for a defined commission, then there is no objection to dealing with it, provided that the conditions for the permissibility of currency exchange, such as immediate possession (taqabud), are met.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Ftawy
- Original fatwa ID
- 122198
- 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