Assalamu alaykum,
What is the ruling with regards to participating in the stock market?
1 Answer
Waalykum assalam,
According to Grand Ayatollah Sayyid al-Sistani (may the Almighty prolong his life):
There is no problem in such participation in and of itself, however, one must abide by the conditions of permissibility [shara'it al-jawaaz] and the conditions validity [shara'it as-sahhah] of transactions, which include:
1 - It is not permissible to participate in [i.e. buy shares of] companies and banks which deal in usury with those whom it is not permissible to take interest from, since such partnership with them in their capital means entering upon the usurious transactions that they perform, unless he is to declare his dissatisfaction in entering into such transactions [such that no further transactions of this kind will be valid due to his refusal] .
2 - It is not permissible to participate in [i.e. buy shares of] companies who invest their wealth in impermissible ways such as selling liquor.
3 - It is not permissible for both the commodity [al-mabee'] and the price [al-thaman] to be debt which is owed [dayn fi'l-thimmah] before the contract [i.e. the transaction, al-'aqd]. Similarly it is not permissible for both of them to be postponed in the contract [mu'ajal fi'l-'aqd], due to the invalidity of selling debt for debt [bay' ad-dayn bid-dayn].
According to Grand Ayatollah Sayyid al-Khamenei (may the Almighty prolong his life):
In general, if the activity on the stock exchange is according to the relevant laws as well as the [Islamic] legal standards (such as being non-usurious, and the stocks not being for companies with impermissible activities such as selling intoxicants or pork), then there is no issue in such participation.
May the Almighty grant you tawfeeq in all of your affairs