Hedging FX Risk on Foreign Share Purchases

Praise be to Allah

Is it permissibe to hedge the fx risk on Amercian share purchases using CFDs?

For example I want to invest £10000 in an American sharia compliant company but if the GBP/USD rate goes up I will make a loss. Could I open a long GBP/USD CFD position for 10K units in order to hedge my fx exposure?


May Allah bless you.

CFDs are not shariah compliant, so you shouldn’t use them to trade.

Please see the link below:

And Allah knows best

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Jazakhallah Khair for your answer.

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