Online Forex trading

Q: It is right, you can't sell what you don't possess. But in online trading you actually not dealing with any party directly. It is new technology and electronic trading. The possession of gold is in electronic form. I have a lot of gold I purchased and I can sell that gold through a broker to any person in the world. The electronic possession of gold will be given to the other person and the cash transfer will also take place and I will get my money (profit or loss) through the broker and the person who is buying will also pay the broker. You are not deceiving or lying to anyone. You deal with the broker directly and the broker is known to every trader. In online trading with broker, actually you get possession of that thing in a system which we are going to sell. Every buy should be closed with selling and every selling should be closed with buying. It is new technology online trading. Buying something itself in the system has the physical possession which is online possession because as I sell it, it becomes changed to money which I get (profit or loss). A more easy example is, there is one dealer who is taking care of my gold, and I say him to sell my gold, and he gives me money back. If I want more gold, I purchase and keep with him, which he takes care online (broker). In broker record, I have the possession of that gold electronically (but not physically). I don't see my gold physically but electronically I have possession of that gold and when I want to sell it, I get my money back. In my understanding, in physical business why you can't sell something until it comes in possession because that thing can be defective or have flaws and if you sell, the other person will have a disadvantage and it comes with deceiving and lying. Here you are not deceiving or lying to anyone. It's like a knowledge and study. Good performer gains money and bad performer loose money or depends on the gold market price rates.

A: The Shar'ee principle in regard to business transactions is that in a situation where both exchanges are specific commodities (i.e. both have the potential of being a مبيع (a sale commodity)), then in order for the transaction to be valid at least one exchange should be received at the time of the transaction (though the other item be deferred). However, if a specific commodity is being sold in exchange of an unspecific commodity (e.g. gold being sold in exchange of money) then in order for the transaction to be valid at least possession of the specific commodity should be taken. In the case explained, since possession of the gold does not take place and nor is it possible for you to take physical possession of it, the transaction will not be permissible.

And Allah Ta'ala (الله تعالى) knows best.

 

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)


Q: Please can you advise why constructive possession of the gold is not allowed as this transfers all legal and ownership rights to the recipients? Is their a different fatwa with regards to goods e.g. clothing, can constructive delivery (receipt and acceptance of an invoice) be taken from the supplier and delivered directly to a customer?

A:

1. The law of shariat is that it is impermissible for one to sell the purchased item before taking possession of it. Nabi (sallallahu ‘alaihi wasallam) has said in his mubaarak Ahaadeeth that a person should not sell the purchased item before taking possession of it (Saheeh Muslim #1525).

2. This law applies to all movable items. This law does not apply to immovable things (i.e. properties and lands).

And Allah Ta'ala (الله تعالى) knows best.

عن ابن عباس قال قال رسول الله صلى الله عليه وسلم من ابتاع طعاما فلا يبعه حتى يقبضه قال ابن عباس وأحسب كل شيء بمنزلة الطعام (صحيح مسلم #1525)

ف(لا) يصح اتفاقا ككتابة وإجارة و (بيع منقول) قبل قبضه

قال الشامي : (قوله : وبيع منقول) مجرور بالعطف على كتابة (شامي ص147 ج5)

وأما شرائط الصحة فعامة وخاصة ... وأما الخاصة ... ومنها القبض في بيع المشترى المنقول (الفتاوى الهندية ص3ج3)

وإذا عرفت المبيع والثمن فنقول من حكم المبيع إذا كان منقولا أن لا يجوز بيعه قبل القبض (الفتاوى الهندية ص13ج3)

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)