Assalamo alaykoum,
Say I buy a stock then decide to sell it couple hours later to book a profit. is it permissible to use the profit to buy another stock on the same day? I heard there is settlement period of 3days but I am not sure I understand what that means. In my understanding, orders are executed immediately so the share and the money are immediately transferred between the buyer and the seller. Note that I am referring to cash brokerage account (ISA account).
Jazak allah khair,
Wa alaykum salaam,
According to most scholars, trading before T+2 does not result in complete transfer of ownership, and therefore you should wait until settlement and not just execution.
Jazak allah khair @Mufti_Faraz_Adam
I agree we have to wait T+2 to sell the shares. Once we sell the shares, it is permissible to immediately use the proceeds to buy more shares? or do we have to wait another T+2?
So in other words, you can’t actually day trade stocks ?
What is T+2? Thank you for your help.