Know which markets are open to you.
Rulings first. Instruments second.
Before any strategy, a Muslim investor needs the market-level ruling. Below: every major instrument class, its status under established fiqh principles, and the reference behind it.
Spot Cryptocurrency
Halal — Subject to AssetBuying and selling actual tokens directly. You fully own the tokens immediately upon purchase.
Shariah Reasoning
Spot trading of compliant utility tokens, commodities, or currencies is permissible: immediate exchange (qabd) and real ownership are present, and no interest is involved. The condition is non-negotiable — the underlying token itself must be halal. That is exactly what our screener rules on.
AAOIFI Shariah Standard No. 50 discussions on trading in cryptocurrencies; scholarly fatwas on digital assets as māl.
Spot Stocks / Equities
Halal — Requires ScreeningPurchasing shares of publicly traded companies outright, without margin or leverage.
Shariah Reasoning
Permissible when the company's core business is halal (no alcohol, gambling, or conventional finance) and it passes the financial ratio screens — debt-to-asset limits and haram revenue below the accepted threshold.
AAOIFI Shariah Standard No. 21 — Financial Paper (Shares and Bonds).
ETFs (Exchange-Traded Funds)
Halal — Islamic ETFs OnlyFunds that track an index or sector, traded on exchanges like stocks.
Shariah Reasoning
Only Shariah-compliant (Islamic) ETFs qualify. Conventional ETFs routinely hold haram constituents — banks, casinos — and use non-compliant structures such as securities lending.
Securities Commission Malaysia — Guidelines on Islamic Exchange-Traded Funds.
Indices
Doubtful / ConditionalA mathematical measure of a market's performance (e.g., S&P 500).
Shariah Reasoning
You cannot own an index directly. Trading indices via CFDs or futures is haram — no underlying asset changes hands. Investing through a Shariah-compliant spot index fund or Islamic ETF that tracks the index is halal.
AAOIFI guidance on the prohibition of trading abstract indices without underlying real assets.
Margin & Leveraged Forex
HaramTrading fiat currencies on margin using broker leverage.
Shariah Reasoning
Fails on three counts: riba (swap fees and rollover interest), gharar (excessive uncertainty), and the absence of real possession (qabd). The broker's loan is conditioned on trading through them — a stipulation that itself violates Shariah.
OIC International Islamic Fiqh Academy ruling on margin forex trading.
Futures & Options
HaramDerivative contracts to buy or sell an asset at a future date and price.
Shariah Reasoning
The assets do not exist at the time of contract; neither party takes possession; and the dominant use is speculation on price movement rather than delivery — squarely within maysir (gambling).
AAOIFI Shariah Standard No. 20 — Sale of Commodities in Organized Markets.
Prediction Markets
HaramMarkets where participants trade contracts on the outcomes of future events.
Shariah Reasoning
Pure speculative betting on uncertain outcomes — qimār and maysir by definition, explicitly forbidden. No screening can rehabilitate the structure.
General fiqh consensus on maysir; Qur'an 5:90.
Bonds (Fixed Income)
HaramDebt instruments where an investor loans money to an entity in exchange for interest.
Shariah Reasoning
A bond guarantees the return of principal plus interest — the textbook definition of riba, strictly prohibited. Sukuk, which represent ownership in real assets and share risk, are the permissible alternative.
Consensus of all major fiqh academies; Qur'an 2:275.
Disclaimer: these classifications reflect the general consensus of major Islamic finance bodies (AAOIFI, OIC Fiqh Academy). Specific implementations vary — consult a certified Shariah scholar before investing.
The market is halal. Is the asset?
Spot crypto passes at the market level — every token still needs its own screen.