Assalamu Alaikum,
I’m looking for a detailed Islamic finance perspective on SNDU (T-REX 2X Long SNDK Daily Target ETF).
I understand that SNDK itself may potentially pass certain Shariah stock screens, but my concern is specifically about the leveraged ETF structure.
From what I understand:
- SNDU is a 2x daily leveraged ETF
- It likely uses derivatives/swaps/leverage internally
- I am considering using it for short-term momentum trades, not long-term investing
- I also considered selling covered calls on the position
My questions are:
- Would the leveraged ETF structure itself generally make this non-Shariah-compliant?
- Does the use of derivatives/swaps automatically make it impermissible according to AAOIFI-style standards?
- Are covered calls on such an ETF generally considered impermissible by most scholars?
- Are there any halal alternatives that provide similar tech/momentum exposure without leverage?
I’m looking for a structural/mechanics-based answer rather than just a simple halal/haram verdict.
JazakAllah Khair.