I would imagine that it is permissible and is no different to buying and selling for a longer period of time. After all why would buying and selling one year apart be halal but buying and selling during the same day be Haram?
What could make it problematic is the large degree of speculation involved in day trading. Over a long period, the stock has always trended upwards especially if you are investing in funds. However, stock picking and day trading is super high risk and involves a lot of speculation.
That’s a fair point. But ultimately it’s like a learned skill where one is relying on a proven set of mathematical based technical indicators which inform one whether it’s going to go up or not
I think it’s quite different to say gambling where it is nothing but random. Here one is exploiting their knowledge of technical indicators, volatility and the daily market to believe that the stock will be going up
Oh right actually one thing I didn’t consider is… in day trading often it can take a longer period of time before the share you’ve bought is actually transferred to you. This means that potentially one could be selling a share before it’s been transferred over (if the hold time is shorter than the time needed to transfer) and thus be selling something that they don’t even have ownership over yet! Which I believe would be Haram right?
Let me know if you want me to explain this further
Yess, I would love to know as well, it just seems like, trading every day and making profits every day as opposed to trading and looking at long-term gain. I assume day trading is short term profits and you don’t make much money compared to a more long term one.
Agreed, I can’t think of a reason for it not being sharia-compliant besides the fact that you might be trading in haram stocks or whatever you are trading in. The underlying premise is the same as any other type and yes, the risk is involved but as you clearly said, it isn’t gambling, it is doing the necessary research and making a prediction through long hours of study.
I wonder if Wahed has any classes or seminars or courses on day trading and its permissibility, they should have events to talk about these, no doubt, it will make lots of money for them too if they charge and get a sheikh in to speak about it.
I wouldn’t think so, again, everything is risky, even buying a kitkat for your shop and selling it is risky, we can’t argue this. As muslims, we should all try and figure all this out and see if there is benefit and bring all the muslims into it so we can all prosper financially.