Islamic scholars and bodies ruling on futures.
Who ruled·What they said·Where to read it
Most bodies rule futures out. Malaysia's Shariah Advisory Council is the notable exception, and both views are below.
Last reviewed 26 September 2026.
Rulings and positions
The Academy sorts commodity trades by timing. Where the goods and the money change hands immediately, the trade is fine.
A contract for delivery at a later date is not, because both sides of the exchange are postponed. The Academy notes it can be reworked into a salam sale, where the full price is paid up front, and then it becomes permissible.
The most common futures contract of all, one that never ends in delivery and is simply closed out, the Academy calls "essentially not permissible by Shariah."
SourcesIIFA Resolution 63
The Council's 2006 ruling on margin trading names futures and options among the prohibited dealings that margin money is used for.
Malaysia's SAC is the main exception. In 1997 it ruled that the crude palm oil futures contract is permissible and in line with Shariah principles.
A year later it found that stock index futures do not contradict Shariah either, provided every company in the index is Shariah-compliant.
Foundations and principles
Two hadith carry most of the case against futures that never end in delivery: the prohibition of selling what you do not own (Abu Dawud 3503), and of transactions with excessive uncertainty (Sahih Muslim 1513).
The disagreement is real. The Fiqh Academy and the Muslim World League's Council rule futures out. Malaysia's SAC permits specific exchange-traded contracts. Our own view, and the reasoning behind it, is in the article linked below.
What passes
- Salam: paying the full price now for a described commodity delivered later. The Fiqh Academy names it as the way to make a forward contract permissible.
- Spot purchases, with immediate delivery and payment.
Further reading
References
- 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
- Islamic Fiqh Council of the Muslim World League, 18th session, Makkah (8 to 12 April 2006). Resolution No. 18/1 on margin trading, as published by IslamOnline. Source
- Securities Commission Malaysia (2006). Resolutions of the Securities Commission Shariah Advisory Council, Second Edition. 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.