Stocks Settlement Date

Asslaam alaykum shaykh Faraz,

I hope you’re well. I’ve been learning and practising day trading for last few months. You’ve mentioned the difference of opinion on selling shares before the delivery of the share-certificate. Even though I’m inclined towards the opinion of it being permissible I wanted to learn about the argument of scholars who deemed it impermissible so I can make a more informed decision.

You mentioned that 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. I am inclined towards this view as shares are not a physical commodity so taking possession (قبض) seems to be completed as soon as the transaction is completed as risk and reward are transferred to the buyer immediately. The buyer can’t cancel the purchase, neither can he get the money back if the company goes bust the very second the transaction was completed. This seems similar to car traders when they buy cars in a car auction. As soon as they pay and take possession of the keys for bought as seen cars, they become effective owners even though car is not registered on their name legally (V5). They usually never put V5 on their name as putting an additional owner on the car would reduce the car value.

Can you please kindly share the argument of scholars who deemed it impermissible so it can help me to come to a decision

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