Fatwa: Is Day Trading stocks and shares gambling?

This is iA the most comprehensive resource for this question on the internet.

We present views from IslamQA, Seekersguidance, and Islamweb, then our resident expert Mufti Faraz Adam presents his views, and finally IFG present a commercial perspective on the matter.

View One: Islamqa

Day trading is defined as the buying and selling of a security/stock within a single trading day. Once the stock owned by the shareholder is sold, it does not belong to him. The repurchase of the stock at a lower price is a separate and completely new transaction. Day trading is permitted provided the underlying traded stock is Shariah Compliant.

And Allah Ta’āla Knows Best

Ismail Desai,

Darul Iftaa

Taken from: https://islamqa.org/hanafi/askimam/103462

View Two: Seekersguidance

Shares from the stock market are generally purchased for two reasons. Some people purchase shares for the purpose of investment, hence their main aim is to become a shareholder in a company’s assets and receive the annual dividend. Others, on the contrary, purchase shares with the intention of capital gain, in that they speculate as to which shares’ value will increase and then purchase them. In other words, they purchase shares when its price is low and then sell them when its value increases; hence their aim is to make profit.

Some contemporary scholars have reservations with regards to dealing in shares with the intention of capital gain. Their basic argument is that purchasing and selling shares with the intention of capital gain is based on speculation, hence giving permission to transact in shares on this basis will open the door for gambling (qimar), which has been decisively prohibited in Shariah. Thus, according to these scholars, it will only be permitted to trade in shares with the intention of investment and receiving the annual dividend of the company.

This viewpoint, however, is a minority one; hence the majority of contemporary scholars including Shaykh Taqi Usmani, Dr Wahba al-Zuhayli and many others are of the opinion that purchasing shares is permitted regardless of whether one purchases them for capital gain or to receive the annual dividend, provided no other rules of Shariah are violated. (The conditions for the permissibility of trading in shares have been mentioned earlier)

They argue that the ruling of trading in shares is not based on the intention of the purchaser; rather, it is based on whether a “share” qualifies, in of itself, to be purchased and sold. Buying and selling shares of a company is in reality buying and selling one’s proportionate ownership in the company’s assets, hence it is permitted to trade in shares. When it is established that “shares” are a justified article of trade, then, with whatever intention one purchases them, investment or capital gain, it makes no difference. It will be permitted for one to purchase shares with the intention of capital gain, just as it is permissible to purchase them with the intention of receiving the annual dividend.

It should be remembered that speculation is not, in of itself, unlawful or disliked, for that is part and parcel of trade. A trader speculates as to which item’s value has decreased and which item’s value seems to have increased. He purchases items and commodities when their price falls and sells them when the price goes up. Thus, this kind of speculation and guess is not unlawful in Shariah.

What is unlawful is that by speculating one violates a particular injunction and ruling of Shariah, such as selling something that is not in one’s ownership, selling something that is not in one’s physical or constructive possession or getting involved in gambling and other such unlawful matters. Therefore, it will not be permitted to sell shares before they come into one’s ownership or possession. Many times, shares are sold in the stock market without they having come into one’s ownership, neither are they delivered. The idea of the various trading parties is also not to own the shares, rather they merely settle the difference in the end. At times, transactions as many as hundreds take place on a single share in one day. All of this is, without doubt, unlawful and a form of gambling.

In conclusion, the majority of contemporary scholars are of the view that trading in shares is permitted, regardless of whether the intention is capital gain or to receive the annual dividend (provided certain conditions are met, which were discussed in an earlier answer). However, one must ensure not to violate any other injunction of Shariah.

Thus, it will not be permitted to transact in shares where one sells them before actually acquiring its ownership and possession. Short sales, future sales and forward sales are not permitted for this very reason. It will only be permitted to trade in shares if the transaction is at spot and one owns the shares. As far as selling shares before the delivery of the share-certificate is concerned, Shaykh Taqi Usmani is of the opinion that this may be permitted, as the ownership in the company’s assets is established by mere transaction and not the delivery of the certificate. Ownership in the share is legally transferred from the seller to the buyer with the mere transaction taking place, hence it would be permitted to sell the shares before its delivery, although better to avoid.

And Allah knows best
Muhammad ibn Adam
Darul Iftaa
Leicester , UK

Taken from: https://seekersguidance.org/answers/hanafi-fiqh/buying-with-the-intention-of-capital-gain/

View Three: Islamweb

It is impermissible to sell the purchased item before taking possession of it first. Zayd ibn Thaabit said, " Do not sell it in the spot where you have bought it until you take it to your house for the Messenger of Allaah, sallallaahu ʻalayhi wa sallam, forbade to sell the goods where they are bought until the traders take them into their possession. " [Abu Dawood]

It has been narrated on the authority of Ibn ʻAbbaas that the Prophet, sallallaahu ʻalayhi wa sallam, also forbade the resale of foodstuff by somebody who had bought it unless he had received it with exact full measure. [Al-Bukhari, Muslim, and others] Ibn ʻAbbaas also reported that the Messenger of Allaah, sallallaahu ʻalayhi wa sallam, said, " If anyone buys a grain, he should not sell it until he takes possession of it. " Ibn ʻAbbaas remarked, " I think all things are considered the same in this regard. " Another version reads, " I regard everything like food (so far as this principle is concerned). " [Muslim]

The scholars held different views as to whether the prohibition in this regard includes all purchased items in general or merely foodstuff in particular; the scholarly view that we adopt in Islamweb is that it includes all purchased items.

However, it should be noted that “taking into possession” in this context is determined according to the common practice. Therefore, if registering the shares in your account or transferring them to your online wallet, for instance, is considered an acceptable manner of taking possession of the shares by the buyer according to the definitions and practices of the stock exchanges, then this is acceptable in the sharee’ah and the buyer is entitled to sell them after taking them into possession; otherwise, it would be impermissible.

Dr. Yousuf ibn ʻAbdullaah Ash-Shubayli wrote:

“It is permissible for the owner of shares in a bank to sell them to anyone else, even before its exchange starts (in the stock market), because he has actually bought such shares and taken possession of them as per the sharee’ah given the fact that these shares are legally registered in his name. Accordingly, he is legally entitled to dispose of them as he wishes. Nevertheless, the buyer is not allowed to sell these purchased shares until the shares are transferred to his name; selling the shares before they are transferred to his name is not allowed in the sharee’ah. He cannot sell them to another party before the ownership is legally transferred to him, namely registering the shares in his name for two reasons. Firstly, the buyer in this case, even if he owns the shares, has not taken possession of them as they are still registered in the name of the seller. The Prophet, sallallaahu ʻalayhi wa sallam, deemed the sale of purchased items before taking them into possession forbidden. Secondly, if the shares are traded among multiple parties while still registered under the name of the first seller, then this leads to disputes, conflicts, and loss of rights.”

Hence, it is clear that selling shares in your case is not prohibited on account of selling what you do not own, because you mentioned that you buy the shares first and then sell them, and, therefore, these shares are legally owned by you. However, the problem lies in whether it counts as “taking into possession” as per the sharee’ah or not, as stated above.

Day trading that is carried out in accordance with the Islamic sharee’ah is not similar to gambling. Hence, it is permissible, in principle, unless it is intended merely to manipulate the stock prices or the like. Al-ʻUsaymi wrote, "In principle, it is permissible to partake in day or week trading. There are disadvantages in day and swift trading; however, banning it is practically impossible.”

Allaah knows best.

Taken from: https://www.islamweb.net/en/fatwa/314083/buying-shares-and-selling-them-on-same-day

The IFG view:

We agree with the above views that day trading is permissible.

However we would strongly caution against embarking on this type of investment strategy with your savings.

To day-trade well you have to spend many many days and months actively involved in the market and learn hard lessons through losses. Day-trading is not something that is suited for every temperament and it is not something most people who start it ever successfully do.

If it is something you’re keen on - do paper-trading initially (i.e. use a practice account with a stockbroker) and see how that goes.

For everyone else, we recommend one of two things:

  1. Use funds or robo-advisory platforms to take the headache out of investing and let them just do it for you. You can compare all the halal investment funds on our comparison page here (just filter for “stocks & shares”).
  2. If you’re keen to get more hands-on (I know we personally often are) then learn how to screen stocks in a halal way, invest for the long-term, and pick high-quality and revenue-generating businesses.

You can learn how to screen shares on the stock market for sharia-compliance here.

You can also actually set up an account with a company called SimplyEthical who only show companies on there that are halal. If you mention that you heard about them through IFG when you sign-up it helps us keep the lights on – and doesn’t cost you a penny.

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Jzk for compiling the above Fatwas, May Allah Reward all of you in both worlds


Assalamu Alaikum,

So this means if we buy a share because we think the stock price will go up, and a few days later we sell it, and we keep doing this it is halal?

Also, my company offers stock at a discount to employees on a quarterly basis. Can I keep purchasing this stock and selling it soon after I receive the shares? The intention would be just to take advantage of the employee discount on the stock purchase.

Wa alaykum salaam,

Only trade with an Islamic account if the company is Shariah certified and has a Shariah advisor.

I would abstain from any leverage unless a Shariah advisor has outlined exactly how it is operating.

Allah knows best

السَّلاَمُ عَلَيْكُمْ وَرَحْمَةُ اللهِ وَبَرَكَاتُهُ
Mufti Sahab i just want to ask that if i purchased sharia compliant stock… Then it is necessary that i can sell only after that particular share will transfer on my demat account… Generally T+2 days taken by broker to transfer the share inyo demat account
So if i bought the share today which is shariah compliant and want to sell within 2 days (not intraday) that is before transferred into demat account… Then it will be permissible or not?
جزاك اللهُ خيرًا in advance.

Wa alaykum salaam,

Trading before settlement is a very debated and disputed issue. I would recommend to not trade before settlement to ensure your trade is halal and that you’ve avoided the difference of opinion.

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Assalamu alaikum,

So if we purchase a share on Monday, are we allowed to sell that on Wednesday or would it be Thursday? I’m not sure if there is a way to know exactly what time settlement occurs - from what I read it’s usually 2 business days.

Also, if one did not wait until settlement in the past, does one have to purify those earnings?

JazakAllah khair

Continuing the discussion from Fatwa: Is Day Trading stocks and shares gambling?:

Asalamualikum mufti saab
Iam from india and I earn a lot of money in intraday trading on halal stocks which is I buy and sell on the same day is it permissible or prohibited please answer my questions if it’s prohibited I’ll leave intraday trading
Jazak allah khair

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As-Salaamu 'alaykum, Mufti Faraz,

jazakAllaah khayr for the guidance on the topic.

Does the same position apply to intraday stock and share trading (scalping)?

Assalaamu alaykum,

I’m currently reserved on day trading and don’t have a definitive answer. The senior scholars are against it and this is more prudent and wise to follow.

Could IFG consider producing an article resource summarising and elucidating the varying respected opinions?

JazakumAllah khayr

Aww Mufti Sb.

Just reading this thread and wanted to ask for some clarity. You’re detailed view above suggests that you view day trading as permissible. However, this comment suggests otherwise. Please can you clarify?

Also, what is the opinion of AAOIFI on this?


Assalaamu alaykum,

My personal view at present is that it requires some thought and review from more scholars. Although I have my individual opinion, I would prefer senior scholars review and give more guidance on the matter.

Assalam o alaikum mufti Sab,
Can share be considered as physical asset .

If it is then can we sell it whenever we want and not waiting for t+2 days.

Mufti Sab what what are the views of ulema because of which they cansider same day trading impermissible

Jazakallah khair

Wa alaykum salaam,

Many scholars are of the view that selling before T+2 is not permissible because ownership is not realised.

However, I believe this issue needs further research.


My broker said that i become owner of a share immediately. That from the order it will become under my name. And another thing is that islamicly app (stock screener) said that it is permissible by AAOIFI

What is ur thoughts on this matter ?



Wa alaykum salaam,

Can you get a reference from the Islamicly app on where AAOIFI have said this?


yes i can this is what islamicly said:
AAOIFI Shariah Standard No. 21 - Financial Paper (Shares and Bonds) talks about the rules of investment in equity of companies. Section 3/2 states “It is permissible to buy and sell shares of corporations, on a spot or deferred basis in which delay is permissible, if the activity of the corporation is permissible irrespective of its being an investment (that is, the share is acquired with the aim of profiting from it) or dealing in it (that is, with the intention of benefiting from the difference in prices).” Section 3/7 states “It is permissible to the buyer of a share to undertake transactions in it by way of sale to another and the like after the completion of the formalities of the sale and the transfer of liability to him even though the final settlement in his favour has not been made.” A combined reading of the above two sections clearly indicate that: 1. Trading of Shariah compliant shares with the intention of making a profit from the price difference is permissible 2. Taking actual possession (delivery in your digital share certificate store/wallet) is not essential as long as you have completed the formalities of becoming the owner of the share you intend to sell before selling the same. Given the above, it seems AAOIFI as well permits intraday trading of Shariah compliant shares, given you follow the conditions mentioned above.

so what do u think of this brother ?


This is not explicitly saying what is being assumed.

The main argument here is AAOIFI (and we all agree with this point) is saying that the “transfer of liability” must go to the trader - this is more than just price risk. By reading the rest of the AAOIFI Standards, it becomes very clear that AAOIFI and all scholars regard liability transfer with asset risk passing onto the trader as a result of actual or constructive possession.

This is the main area of concern against intra day trading that is the full risk of the underlying investment transferred to the trader.

This needs further discussion among scholars.



thanks for reply !
so i have another question.
I am actually a swing trader so my positions are ofcourse longer then 2 days.
But i do have a very strict risk management. so sometimes when i make a wrong decission my stop loss gets triggered the same or the next day. is this okay ?