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Many of the rules used to prohibit derivatives trading are superseded in my opinion.
Posted 26 February 2026
My website makes me very easy to contact, so I regularly receive requests for advice. Particularly religious advice about Islamic finance issues.
My April 2025 column for the magazine "Islamic Finance News" was based on one such request. You can read it below.
My approach with all such enquiries is to encourage the person to think for themselves, while adding some perspectives that they may not have considered.
The key point with all religious rules is to think about the purpose those rules are seeking to achieve, and ask how they fit into the world as it is today.
I eventually add each of my monthly columns to the Islamic finance section of my website, after a few months delay to ensure Islamic Finance News has a reasonable priority period. My website contains much else besides Islamic finance, such as articles about politics, career advice, book reviews etc.
Every website page allows readers to post comments, using technology from Disqus. I receive an email each time someone comments, and usually they are asking a question. I respond whenever I can, while deleting occasional attempts at “comments spam.”
A few days ago, I noticed that although my site has over 800 pages, over the last year a disproportionately high number of comments arose from just two articles:
As well as public comments on my website, I also receive private questions via email, or last month by Facebook Messenger, copied below with one redaction and minor grammatical corrections:
“I’m XXXXXX from Pakistan. I have done a Masters in finance.
I just want to ask about online forex trading (derivatives market). Is it allowed in Islam or is it haram?
Secondly, I want to ask about short selling or futures trading on the Pakistan stock exchange. My question: is it halal or haram? I read your article about this but still want to ask about (1) possession, (2) the ulemah says there is interest in it, (3) and we get benefits at the loss of the other party.
Please guide me. I have skill but am very worried and confused about this. Please guide me about the above points.”
I have been thinking about why I get so many questions of this type.
Most of the questioners strike me as being young. Of course, when you are 74, most other people are young!
Obviously, they think they can make money trading currency or equity derivatives. Some may even be right!
For the others who trade at a loss, unless they are speculating with borrowed money, the margin requirements should limit losses to 100% of their savings. They will have long working careers ahead of them to make up what they lose.
Personally, I occasionally used to buy traded options when younger but haven’t bothered for many years. There is no point speculating with a tiny proportion of my portfolio, since even small amounts require time and effort. Conversely at my age and being retired, I don’t want to risk a meaningful proportion of the portfolio in such risky activities.
I always remind enquirers that they must answer religious questions for themselves, since they are individually accountable to God for their actions and cannot shift the responsibility by asking someone else.
They need to think about the purposes which underlie the rules they are asking about, and whether they are still the same in today’s environment when exchanges have precise rules governing trading arrangements, collateralisation, margining, etc.
In my opinion, too many people fail to think from fundamental principles. Instead they try to shoehorn new questions into old categories. I illustrated this in my 7 March 2018 column “Shariah scholars should stop analyzing corporations as if they were partnerships.”
Mohammed Amin is an Islamic finance consultant and former tax partner at PwC in the UK.
