A broker guarantees profits
9-8-2004 | IslamWeb
Question:
The forex market is equated to gambling (people might win or lose money) but I have found a broker who is guaranteeing profits. If he goes into loss, he will simply return my money. The profits that I get are calculated on the amount of investments I make, not the profits that he makes. Is it Halal?
Answer:
Praise be to Allah, the Lord of the Worlds; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.
Investing money in the market you described is Haram as it is a form of gambling. Allah says: "O you who believe! Intoxicants (all kinds of alcoholic drinks), gambling, AlAnsâb, and AlAzlâm (arrows for seeking luck or decision) are an abomination of Shaitân's (Satan) handiwork. So avoid (strictly all) that (abomination) in order that you may be successful. (Al-Ma'idah 5:90)
In addition, the form in which the broker ensures the money is unlawful as well for two reasons:
First because the profit is calculated on basis of the capital not on the basis of the benefits that were actually gained. It is unlawful in partnership to fix a given profit on the basis of the percentage of the capital because this contradicts the principle of risk on which partnership is founded in the first place (which is to accept to bear the profits and losses according to the known fixed percentage of benefit.
Second, it is unlawful to guarantee the capital as mentioned earlier.
Allah knows best.