Darul Iftaa Mahmudiyyah

Is it haraam to own a stock for a short time? Pls see the attached and comment.

· 26 Dhuʻl-Qiʻdah 1424 AH1 min readFatwa 10695English

Question

http://muslim-investor.com/answers/day-trading-a.html When we buy stocks (islamically ok companies) obviously one waits for it to reach a low price. Purchases it at the low price, waits for the price to go up and then sells it to make a profit. This can happen in a short time or long time and depends on how much profit one wishes to make. One also has stop orders to sell the stock if it falls to a certain price to limit their losses. Is this not halaal? The stocks are selected after research, and the overall market trend is kept in mind. If this is not the right way, then what is the correct way to trade stocks? Don?t we all invest in any business to make a profit, and when WE THINK there is no more potential sell it. The person buying thinks there is more potential.

Answer

In principle, it is perfectly permissible to purchase stocks at a low price and thereafter sell them after at any price suitable to the purchaser. He may also have a stop order to sell.

and Allah Ta'ala Knows Best

Mufti Ebrahim Desai

Answered by
Mufti Ebrahim Desai
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Source: Darul Iftaa Mahmudiyyah — https://askimam.org/public/question_detail/10695
Fatawa SA: https://fatawa.co.za/fatwa/askimam-10695

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