Salem le swing trading est-il hallal ?
Yes, swing trading is permissible.
Hmm that’s interesting. I always thought it isn’t halal since it is almost completely equivalent to gambling. I mean, when you are swing trading you are not really “investing”. You are simply hoping that the stock price will go up a few cents to flip it. I am curious to learn as to why some say it is permissible.
Not really sure what to say to that other than “well, that’s what you thought…”
It’s not gambling because there is an exchange of an asset for value, each of which have utility and use to the counter party. Additonally, there’s no wagering happening here between two people. One person is buying and bearing the risk of the asset in the future, and the other is selling and relinquishing the assets risk.
The base rule for all transactions is that they are permissible until they are proven otherwise. What explicit prohibition is being violated here? None.
As the term “swing trading or day trading” says it’s trading. However that by itself does not make it impermissible.
You could call it speculative or not. It depends. Maybe you have an edge in a trade…
I’ll give an example of a swing trade that have some fundamental bent to it.
(1) a company that was being acquired by a larger company , sells off, as the merger does not go through. Heavy selling pressure has depressed the stock. You think it is overdone. Buy a position. When selling stops and then buyers step in maybe the stock recovers. You hold for that. You can call it swing trade or not. I don’t care about the title you give this “trade”. It’s clearly shorter term in nature.
That said , markets are tough to beat. And one of the edges for small private investors is the longer duration of investing. There is less competition there. The shorter you go , the more competitor from bots, algos, hedge funds etc.
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Thank you for sharing
Salem alikoum
Trade: Obviously a generally permitted activity. However, things to watch out for include:
- The asset being traded should be halal to own in the first place.
- You should have ownership of the thing you are selling. So for instance, you aren’t selling something you borrowed .(When do we own our shares after the purchase?)
- You aren’t using broker/seller provided margin. This is because this margin is provided conditional on you using the borrowed funds to buy from the broker/seller. Therefore, the loan is attached to a conditional benefit to the lender which makes such benefit riba and the loan haram to either extend or receive.
salem alikoum I have no knowledge of this subject it is part of the article that I looked for, I added the question (at what point do we have our shares after 'purchase ? after sorry i only took part of the article the rest of the article is probably true concerning the opinion, about the length of time one must hold an asset before deciding to sell it. , but I don’t have the knowledge and the ability to verify it so I prefer to share that this part sorry, Allah knows best