Islamic scholars and bodies ruling on options.
Who ruled·What they said·Where to read it
Options are ruled out by the Fiqh Academy and AAOIFI. The one permissive ruling on record is narrow, and it is below too.
Last reviewed 26 September 2026.
Rulings and positions
The Academy's objection is to what an option actually sells. You are not buying a sum of money, a benefit or a financial right that can be exchanged, only the choice to go through with a deal later or walk away. That is not something Islamic law lets you sell.
The 1992 resolution adds that options "do not fall under any one of the Shariah nominate contracts." Because the contract itself is not permitted, trading options afterwards is not permitted either.
SourcesIIFA Resolution 63
AAOIFI's Shari'ah Standard No. 20 reaches the same conclusion for the same reason, as quoted in Jordan's 2022 fatwa. What is being sold is not an item, a benefit or a financial right, so the contract fails.
Jordan adds a second objection in its 2022 fatwa on currency options. Both sides are betting on which way the price will move, and one wins exactly what the other loses. The Department treats that as gambling, and rules options out.
Malaysia takes a narrower view. In 1995 the Commission's Islamic Instrument Study Group allowed call warrants, which give you the right to buy a fixed number of shares at a set price within a limited time, as long as the shares themselves are Shariah-compliant. The resolution appears in the SAC's published resolutions.
Foundations and principles
The core objection is to what is being sold. An option sells a right to buy or sell, not an asset, a benefit or a money claim. The rulings above hold that a right of that kind cannot be the object of a sale.
Jordan's fatwa adds the gambling objection and cites Al-Baqarah 2:188, which forbids consuming one another's wealth unjustly.
What passes
- Of the rulings collected here, only Malaysia's permits an option-like instrument, and only call warrants on Shariah-compliant shares.
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
- General Iftaa' Department, Jordan (16 November 2022). Fatwa No. 3732: Ruling on Trading Currencies Using Option Contracts (quotes IIFA Resolution 63 and AAOIFI Shari'ah Standard No. 20). 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.