Salaam,
I have a question regarding Trading for a living -
Before reading on, please understand that I converted to Islam as an adult male. I have however, believe and have ALWAYS believed there is ONE god. I have also read the holy Qur'an many times, differing revisions, with different translations, from different locations.
So unfortunately, I cannot read Arabic and perhaps something *gets lost in translation and emphasis*,
hence the Qu.
All the text that I have seen regards ANY trading for a living as Haram and all proceeds must be forfeited (given away) to charity.
Having read the Qur'an I have yet to read specific details regarding this, or ANYTHING that comes close,
to Trading as a living.
The references I have seen, are in regard to buying and selling LIKE items, in that neither the BUYER of SELLER are to make a loss .... LIKE for LIKE transactions. Call it win-win if you like. This is an interesting point, which I will discuss later.
Usury, is another conflicting issue. Sharia banks do not charge interest, however BUNDLE a *profit* component in the repayments, over the term of the loan. Sorry, but a horse is still a horse, no matter what you call it.
In regard to the prevailing LIKE for LIKE, win-win preference in Islam, share trading and any form of transaction, where another party loses out, is Haram. This is a common occurrence, with those chasing $$$ and is greed oriented, period, which occurs in ALL forms of Trading / Investment and general business activities too for that matter.
Chasing dollars is greed, period. Hence, the man in the street, is unable to fathom the complexities of Markets, what makes them tick and does not have the patience to grow and learn, as they are greedy and want profits QUICK. This is why 2-5% of market participants succeed while the remainder fail. We must remember that, the 98% that fail, never return - it's the professionals that create, maintain and utilise markets, not amatuers.
The stock market, is NOT a gambling den - which is Haram. Unfortunately, trading is looked upon as PURE speculation, without science or understanding - this is fanciful thinking, to a seasoned market professional.
In regards to LIKE for LIKE transactions, the concept is, in all reality, an an effort to preserve win-win scenarios and also preserve the concept of equality in transactions. Therefor (as a stretch in concept)is it not possible, that successful market participants, are only successful because there transactions ARE win-win ORIENTED, for if they were not, they would not be in market(s)long and would fail miserably. Every transaction needs the other side to:
1. Exist, and
2. Preferably succeed with there perceived investment strategy, as is necessary to provide the re-balancing of commodity pricing.
I understand that this topic is contentious, with the current GEOP and Econ circumstances we find ourselves in in 2011. Remember IT IS greed that put us here!!!!
I believe that the Islamic banking and trading model has merits - from a risk perspective. However NO matter how you look at it, trading isgenerally viewed as Haram, especially when viewed from certain perspectives.
The following read was interesting regarding Shari(sorry spelling) investment -
From what I can ascertain, seems the scholars of the day determine relevance - for best fit understanding and application.
The general public. Hence, they interpret it as they go along:
There are also other requirements that a company must meet before most scholars would deem it acceptable to invest in.
These are as follows:
Companies must have a debt to equity ratio equal to or less than 33%.
Companies must have Account Receivables to Total Asset ratio equal to or less than 47%.
Companies must not receive more than 9% of total income from non-operating Interest activities.
Which I can understand as it limits exposure - risk. This is a good thing.
So my interpretation, for now, stands as follows, in it's most general sense.
Halal Investment (and Trading, perhaps) can only be done:
When executed, in a way that minimises risk and structured in a fair and equitable manner for both parties.
I was unable to find the link, however am sure that one site claimed that a way to be safe*halal*, was to look at venture capital avenues as a form of direct company investment - IS this not perhaps the highest form of speculation and high risk - what contradictions of contradictions. Then again perhaps the relevant point is, the *Venture Capitalist*, knows what they are doing and structures there *investment* accordingly. It is, however, at the end of the day a speculative effort based on considerable knowledge and capabiltiy. Hmmmm, sounds like some traders / investors I know!
BTW, I'm not interested in justifying my own morality and undertakings, in this conversation. I am only seeking perspectives from
educated professionals, who can be OBJECTIVE and aren't afraid to speak there minds, irrespective of what popular belief would have us cconclude. We all know how easy it is, to follow the pack and not question ourselves to think and learn.....as we are advised to do
in the holy Al Qur'an.
I will leave the introductory Qu. as is, as I hope it will generate FURTHER questions and dialogue..........
If I have misunderstood religious text in ANY way, I am grateful for guidance and it is why I am here!
Salaam,
Peter
I have a question regarding Trading for a living -
Before reading on, please understand that I converted to Islam as an adult male. I have however, believe and have ALWAYS believed there is ONE god. I have also read the holy Qur'an many times, differing revisions, with different translations, from different locations.
So unfortunately, I cannot read Arabic and perhaps something *gets lost in translation and emphasis*,
hence the Qu.
All the text that I have seen regards ANY trading for a living as Haram and all proceeds must be forfeited (given away) to charity.
Having read the Qur'an I have yet to read specific details regarding this, or ANYTHING that comes close,
to Trading as a living.
The references I have seen, are in regard to buying and selling LIKE items, in that neither the BUYER of SELLER are to make a loss .... LIKE for LIKE transactions. Call it win-win if you like. This is an interesting point, which I will discuss later.
Usury, is another conflicting issue. Sharia banks do not charge interest, however BUNDLE a *profit* component in the repayments, over the term of the loan. Sorry, but a horse is still a horse, no matter what you call it.
In regard to the prevailing LIKE for LIKE, win-win preference in Islam, share trading and any form of transaction, where another party loses out, is Haram. This is a common occurrence, with those chasing $$$ and is greed oriented, period, which occurs in ALL forms of Trading / Investment and general business activities too for that matter.
Chasing dollars is greed, period. Hence, the man in the street, is unable to fathom the complexities of Markets, what makes them tick and does not have the patience to grow and learn, as they are greedy and want profits QUICK. This is why 2-5% of market participants succeed while the remainder fail. We must remember that, the 98% that fail, never return - it's the professionals that create, maintain and utilise markets, not amatuers.
The stock market, is NOT a gambling den - which is Haram. Unfortunately, trading is looked upon as PURE speculation, without science or understanding - this is fanciful thinking, to a seasoned market professional.
In regards to LIKE for LIKE transactions, the concept is, in all reality, an an effort to preserve win-win scenarios and also preserve the concept of equality in transactions. Therefor (as a stretch in concept)is it not possible, that successful market participants, are only successful because there transactions ARE win-win ORIENTED, for if they were not, they would not be in market(s)long and would fail miserably. Every transaction needs the other side to:
1. Exist, and
2. Preferably succeed with there perceived investment strategy, as is necessary to provide the re-balancing of commodity pricing.
I understand that this topic is contentious, with the current GEOP and Econ circumstances we find ourselves in in 2011. Remember IT IS greed that put us here!!!!
I believe that the Islamic banking and trading model has merits - from a risk perspective. However NO matter how you look at it, trading isgenerally viewed as Haram, especially when viewed from certain perspectives.
The following read was interesting regarding Shari(sorry spelling) investment -
From what I can ascertain, seems the scholars of the day determine relevance - for best fit understanding and application.
The general public. Hence, they interpret it as they go along:
There are also other requirements that a company must meet before most scholars would deem it acceptable to invest in.
These are as follows:
Companies must have a debt to equity ratio equal to or less than 33%.
Companies must have Account Receivables to Total Asset ratio equal to or less than 47%.
Companies must not receive more than 9% of total income from non-operating Interest activities.
Which I can understand as it limits exposure - risk. This is a good thing.
So my interpretation, for now, stands as follows, in it's most general sense.
Halal Investment (and Trading, perhaps) can only be done:
When executed, in a way that minimises risk and structured in a fair and equitable manner for both parties.
I was unable to find the link, however am sure that one site claimed that a way to be safe*halal*, was to look at venture capital avenues as a form of direct company investment - IS this not perhaps the highest form of speculation and high risk - what contradictions of contradictions. Then again perhaps the relevant point is, the *Venture Capitalist*, knows what they are doing and structures there *investment* accordingly. It is, however, at the end of the day a speculative effort based on considerable knowledge and capabiltiy. Hmmmm, sounds like some traders / investors I know!
BTW, I'm not interested in justifying my own morality and undertakings, in this conversation. I am only seeking perspectives from
educated professionals, who can be OBJECTIVE and aren't afraid to speak there minds, irrespective of what popular belief would have us cconclude. We all know how easy it is, to follow the pack and not question ourselves to think and learn.....as we are advised to do
in the holy Al Qur'an.
I will leave the introductory Qu. as is, as I hope it will generate FURTHER questions and dialogue..........
If I have misunderstood religious text in ANY way, I am grateful for guidance and it is why I am here!
Salaam,
Peter
