Islamic scholars and bodies ruling on margin and leverage.
Who ruled·What they said·Where to read it
Trading with money borrowed from your broker is ruled out by every body below, with or without interest.
Last reviewed 26 September 2026.
Rulings and positions
The Academy ruled in 1992 that you cannot buy shares with an interest-bearing loan from your broker, secured against the shares themselves. The loan is riba, and pledging the shares as security only locks it in.
SourcesIIFA Resolution 63
In 2006 the Council gave four reasons for rejecting margin trading. The extra you pay on the loan is riba. The broker only lends if you trade through him, so the loan comes bundled with his commission.
The borrowed money also funds other prohibited dealings, among them bonds, options, futures and currency trades without immediate exchange. And the Council judged the whole practice harmful, both to investors and to the wider economy.
Jordan's Iftaa' Department has ruled on this twice. In 2010 it called margin trading forbidden, first because you never actually or constructively hold the shares, and second because the broker profits from the money it lends you. It cited the Muslim World League's resolution in support.
In 2024 it widened the ruling to leverage of every kind. Its reasoning rests on a classic maxim: "every loan that brings benefit for the lender is considered usury."
SourcesJordan Iftaa' Department, Fatwa 645Jordan Iftaa' Department, Fatwa 3871
Foundations and principles
The prohibition of riba rests on Al-Baqarah 2:275-281. Every ruling above applies the same maxim. A broker who lends you money on condition that you trade, and pay commission, through him is being paid for the loan.
What passes
- Trading with your own money, fully paid, with nothing borrowed from the broker.
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
- General Iftaa' Department, Jordan (22 April 2010). Fatwa No. 645: Ruling on Margin Trading. Source
- General Iftaa' Department, Jordan (5 May 2024). Fatwa No. 3871: It is Prohibited to Trade with the Financial Leverage System. 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.