Islamic scholars and bodies ruling on binary options.
Who ruled·What they said·Where to read it
Every ruling we found prohibits binary options. Nothing is sold, and one side takes exactly what the other loses.
Last reviewed 23 October 2026.
Rulings and positions
Islamweb was asked in 2019 about the classic binary trade: you predict whether a currency or other price will be higher or lower within minutes or hours. The questioner argued it was not gambling, because it relied on economic analysis and a strategy rather than chance.
The fatwa rejects that. Studying the market does not change what the contract is. Its subject is neither money, nor a benefit, nor a financial right that can be exchanged, which is the Fiqh Academy's test in Resolution 63, so binary options in their current form are forbidden. An earlier Islamweb fatwa, from 2014, reaches the same ruling and adds that one side's gain comes at the other's expense.
SourcesIslamweb, Fatwa 396433Islamweb, Fatwa 237190IIFA Resolution 63
Asked in 2020 about a business giving paid buy and sell indications on a binary options platform, the answer rules the trading itself impermissible: what is sold is only a right to buy or sell, not property, and the contract involves uncertainty and gambling.
It rules the advice business out as well, as cooperation in sin (Al-Ma'idah 5:2), and holds that the income stays unlawful even when it is meant for the poor.
Indonesia's national Shariah council ruled on currency trading in 2002. Exchanging currencies on the spot is permitted, though not for speculation. An option on a currency, a contract for the right to buy or sell an amount at a set price by a set date, is ruled haram "karena mengandung unsur maisir": because it contains gambling.
The fatwa does not name binary options, which were not a retail product in 2002. It is included here because it rules on options over currencies, the thing binary platforms most often sell, and its reason, maysir, applies even more plainly to a contract that pays all or nothing. That application is ours.
SourcesDSN-MUI Fatwa 28/2002
Foundations and principles
The rulings rest on two grounds. A valid sale needs something to be sold: an asset, a benefit or a recognised financial right. A binary option sells only a payout that depends on where a price ends up, which the Fiqh Academy's Resolution 63 holds cannot be the object of a sale.
And it is a wager. Each side stakes money on an uncertain price, and the winner takes what the loser pays. On many retail platforms the platform itself takes the other side of every trade, and a payout below 100% of the stake is its built-in edge. The prohibition of gambling rests on Al-Ma'idah 5:90-91, and Al-Baqarah 2:188 forbids consuming one another's wealth unjustly.
What passes
- Nothing in the rulings collected here permits a binary option, on any platform, under any name such as "fixed time trades", or with an "Islamic" or swap-free account.
- Buying a halal asset on the spot and receiving it is the permissible alternative.
Further reading
References
- Islamweb Fatwa Centre, Qatar (21 April 2019). Fatwa No. 396433: Binary Options Are Forbidden. Source
- Islamweb Fatwa Centre, Qatar (23 January 2014). Fatwa No. 237190: Binary options contracts are prohibited in Islam. Source
- International Islamic Fiqh Academy (9 to 14 May 1992). Resolution No. 63 (1/7) on Financial Markets (Shares, Options, Commodities, and Credit Cards), Jeddah. Source
- Islam Question & Answer (23 November 2020). Answer No. 323501: setting up a business giving buy and sell indications where binary options are sold. Source
- Dewan Syariah Nasional, Majelis Ulama Indonesia (28 March 2002). Fatwa No. 28/DSN-MUI/III/2002 on currency trading (al-Sharf), as published by TafsirQ. Source
ShariaQuant summarises what each body ruled, quotes the wording that matters, and links to every source so you can read the full ruling yourself. This is a record of their rulings, not a fatwa of our own.