Is Prop Firm Trading Halal?

Investment Questions and Chats
#1

This thing of prop firm trading is popping up all over social media and has been for a while.

I understand the general consensus for Forex Trading/CFDs is not permissible.

However, this thing about prop firms paying out for the below:

  1. All accounts given by the Prop Firm are DEMO accounts. You would not be trading REAL MONEY. All Prop Firms say this.

  2. You are not trading on the LIVE markets therefore you are not engaging in CFDs, Leverage etc with a broker. The market conditions are simply simulated.

It seems as though the pay outs are from the revenue generated from ‘Challenges’, and you get paid out based on your performance (in the demo environment) from these failed challenges of others.

Another thing to note, these prop firms suggest they do not copy trades from your demo account to their Live accounts. They pay you based on your performance for ‘data’ and ‘statistics’.

Thoughts?

#2

Prop firm trading using demo accounts avoids real money trading and typical issues like leverage and interest. Payouts come from fees paid by traders for challenges, not from live market profits. Since it’s a simulated environment, the permissibility may vary based on the firm’s practices and transparency.