Most Islamic scholars consider margin trading, day trading, options and futures prohibited by sharia (according to Faleel Jamaldeen). Options (stocks, assets, etc.) are considered haram, as they are based on ambiguity and speculation. Islam insists on mutual benefit and, in options trading, one entity benefits at the expense of the other party. This type of transaction is included under the heading of prohibited transactions that it is not allowed to initiate or trade.
As we said earlier, there is no definitive answer for options trading to be halal or haram. While many people consider options trading to be halal and therefore participate in the options market, there is a significant population that considers that it is not in accordance with Islamic principles. Options are a type of derivative, which are all zero-sum games. Sheikh Yusuf DeLorenzo has a similar view and states that this type of economic activity is clearly prohibited by the shariah.
Trading CFDs or binary options is certainly prohibited, since you don't own any part of the asset. There are many who are of the opinion that it depends on the nature of the trade and the underlying of the option. Options trading is generally considered inadmissible; this was discussed at the IFG Fatwa Forum by the Mufti Billal Omarjee and the Mufti Faraz Adam here. And please don't trade leveraged products without understanding the risks involved, there is a reason why 80% of retail traders lose money trading with CFD brokers.
With about 14.2% (census 201) of the country's population is Muslim, it is increasingly being asked whether options trading is halal or haram. In short, I think the distinction you have created between speculating on stocks and options is a bit arbitrary: a stock is a “derivative”, in a sense, as much as it is an option. On the one hand, you say: “The option contract can only continue when both the seller and the buyer agree to proceed and then say “YES NO”, the seller or buyer can terminate and close their option contract at any time they wish. When options contracts are used to hedge risk, the backpack full of rocks represents the risk and the options contract represents the mechanism by which the backpack full of rocks is transferred from the back of one person to the back of another person who is more willing and able to carry the weight.
The seller (or buyer) of an option can close his position, but only if there is a willing participant on the other side of the trade: a willing buyer (or seller). A binary option is an exotic financial option in which the result is a fixed monetary amount or nothing. Therefore, what is sold is the option itself, and this contract is binding on one of the two parties, namely the seller of the option, while it is not binding on the other party, that is, the buyer of the option. In any case, in order to be able to trade options, you will need a significant amount of money in your broker account (more than 100,000) and a sufficient margin.
There is a minority view adopted by some scholars who believe that options trading is allowed. It should be clearer if you are discussing long options or spreads positions, short options positions, or anything else. From what I understand from your post is that options trading becomes halal if you have the underlying stocks and if you are hedging the risk. Just because it's good doesn't make an exchange halal, I guess and I expect an opinion that just because it's an option doesn't make it haram.
