Short answer
Options, futures settled without delivery, CFDs and selling indices are prohibited by the International Islamic Fiqh Academy (resolution 63): they involve selling a right that is not an asset, or betting on a price movement. Diyanet also prohibits warrants (2025). A genuine forward purchase that meets the conditions of salam remains permitted.
What the institutions say
Official positions, with their reference. The badge sums up the institution’s position, not an opinion of Assabile.
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International Islamic Fiqh Academy Organisation of Islamic Cooperation, JeddahProhibited
Options relate neither to an asset, nor to a usufruct, nor to a financial right that can be sold: they are prohibited, as is reselling them. Futures without actual delivery and selling indices are also prohibited; a forward contract that meets the conditions of salam is permitted.
Resolution 63 (1/7), Jeddah, 1992; resolution 238 (9/24), 2019 (hedging)
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AAOIFI Accounting and Auditing Organization for Islamic Financial Institutions, BahrainProhibited
Excludes options, futures and interest rate swaps as they are practised; accepts promises and genuine sales that comply with the rules of salam and sarf.
Shariah standard 20 (sale of commodities on organised markets)
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Diyanet Presidency of Religious Affairs, Türkiye (High Council of Religious Affairs)Prohibited
The right to buy or sell later at a fixed price cannot be sold for a price; warrants, like options, are not permitted.
Decision 2025/64 (warrants)
Positions are reported as they stand; other scholars may hold other views. Method and disclaimers
Depending on your country
- Türkiye
- VİOP (Borsa İstanbul’s derivatives market) and varant (warrants) fall under these prohibitions.
- Gulf states
- To hedge risks, Islamic institutions use unilateral promises and adapted contracts, within the framework set by the Academy (resolution 238 on hedging).
Options
An option gives the right to buy or sell an asset later at a fixed price, in return for a premium. The International Islamic Fiqh Academy ruled that this right is neither an asset, nor a usufruct, nor a financial right that can be sold: the option is prohibited, and so is reselling it (resolution 63 (1/7)). Diyanet ruled likewise on warrants, pointing out that most contemporary institutions refuse to allow the sale of a “right to buy or sell” (decision 2025/64).
Futures and forwards
The Academy distinguished four forms of contracts on commodities and currencies (resolution 63):
- immediate delivery and payment: permitted;
- immediate delivery and payment guaranteed by the market’s clearing house: permitted;
- deferred delivery with payment on delivery, with actual delivery: prohibited, unless it meets the conditions of salam (price paid in advance);
- deferred delivery settled by an offsetting transaction, without delivery: prohibited; this is the most common form of futures.
CFDs, binary options, indices
CFDs and binary options confer no ownership: you receive or pay a price difference. They combine gharar and maysir. The Academy described selling indices as pure gambling (resolution 63).
Hedging risks
Islamic businesses and banks can protect themselves against price or exchange-rate movements using compliant tools (unilateral promises, genuine sales), within the framework set by the Academy (resolution 238 (9/24), 2019).
The verses
يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوٓا۟ إِنَّمَا ٱلْخَمْرُ وَٱلْمَيْسِرُ وَٱلْأَنصَابُ وَٱلْأَزْلَٰمُ رِجْسٌ مِّنْ عَمَلِ ٱلشَّيْطَٰنِ فَٱجْتَنِبُوهُ لَعَلَّكُمْ تُفْلِحُونَ ٩٠ إِنَّمَا يُرِيدُ ٱلشَّيْطَٰنُ أَن يُوقِعَ بَيْنَكُمُ ٱلْعَدَٰوَةَ وَٱلْبَغْضَآءَ فِى ٱلْخَمْرِ وَٱلْمَيْسِرِ وَيَصُدَّكُمْ عَن ذِكْرِ ٱللَّهِ وَعَنِ ٱلصَّلَوٰةِ فَهَلْ أَنتُم مُّنتَهُونَ ٩١
90 O you who have believed, indeed, intoxicants, gambling, [sacrificing on] stone alters [to other than Allāh], and divining arrows are but defilement from the work of Satan, so avoid it that you may be successful.
91 Satan only wants to cause between you animosity and hatred through intoxicants and gambling and to avert you from the remembrance of Allāh and from prayer. So will you not desist?
The hadiths
Abu Huraira (Allah be pleased with him) reported that Allah's Messenger (ﷺ) forbade a transaction determined by throwing stones, and the type which involves some uncertainty.
عَنْ بَيْعِ الْحَصَاةِ وَعَنْ بَيْعِ الْغَرَرِ .
Hakim asked (the Prophet): Messenger of Allah, a man comes to me and wants me to sell him something which is not in my possession. Should I buy it for him from the market? He replied: Do not sell what you do not possess.
لاَ تَبِعْ مَا لَيْسَ عِنْدَكَ "
Frequently asked questions
Is buying an option to protect myself against a fall any different?
According to the Academy, the protective purpose does not change the nature of the contract: the option remains prohibited. Compliant hedging tools exist for businesses (resolution 238).