Is Future trading on Binance halal?
A wide range of the derivatives available on Binance are not halal. For example, in future trading, they lend you money to buy or some crypto to sell and in return, you have to pay the interest which is clearly Reba.
The basic principle in futures trading and transactions is that it is Halal except as stipulated by the legislator. The shareholding company, although not regulated by Islamic law its controls must be legal and ethical in its activites and contracts.
Futures trading is just like a zero sum game, +1-1= 0, and such games are forbidden in Islam.
It is confusing because leverage functions like a loan, even if there is no interest involved. Ultimately, leverage trading is halal in Islam because all you are doing is utilizing debt to purchase a stock or employ a specific strategy. The issue you may have is if the investment is compliant with Shariah.
only Ribah (interest on money) is not halal at any cost. Financial derivatives and futures are haram in Islam because you are not trading a real asset.
In short, three factors i.e. Gambling, Trading on assets we do not own, and Interest make future trading forbidden in Islam.
Margin trading, day trading, options, and futures are considered prohibited by sharia by the "majority of Islamic scholars" (according to Faleel Jamaldeen).
Futures contracts have been ruled by the Shariah Advisory Council of Securities Commission (2006) as being Shariah-compliant.
Crypto in general is halah to buy, sell or keep as an asset, but for binance (or any other exchange) only spot trading is halal, so margin trading, futures, staking, defi staking, earn services, loans, dual investments, borrowing ALL are Haram, and binance in particular even for normal staking gives you the rewards + ...
It is because of both riba and selling the stock without ownership that short selling is prohibited in Islamic finance.
What is leverage in futures binance?
Leverage refers to using borrowed capital to trade cryptocurrencies or other financial assets. It amplifies your buying or selling power so you can trade with more capital than what you currently have in your wallet. Depending on the crypto exchange you trade on, you could borrow up to 100 times your account balance.
Similar to spot trading (directly buying or selling an asset), margin involves the immediate exchange of a digital asset. The main difference is the ability to incorporate leverage into these trades, multiplying the trade value anywhere from 2X to 10X, as is possible with futures contracts.
Futures are a type of derivative contract agreement to buy or sell a specific commodity asset or security at a set future date for a set price. Futures contracts, or simply "futures," are traded on futures exchanges like the CME Group and require a brokerage account that's approved to trade futures.
Futures bets are wagers placed on events such as which team will win the championship or who will win the MVP. These bets are decided by longer-term results and outcomes that are usually settled at the end of a season or tournament.
Buying, holding and selling of lawful stocks is permissible in Islam.
In Islamic finance, most derivative contracts are forbidden and considered invalid because of the uncertainty involved in the future delivery of the underlying asset.
Futures bets are wagers placed on events such as which team will win the championship or who will win the MVP. These bets are decided by longer-term results and outcomes that are usually settled at the end of a season or tournament.
Futures, in and of themselves, are not any riskier than other types of investments, such as owning equities, bonds, or currencies. That is because futures prices depend on the prices of those underlying assets, whether it is futures on stocks, bonds, or currencies. Moreover, futures tend to be highly liquid.
Crypto futures trading is a type of trading that mimics futures trading in the mainstream markets. It involves using futures contracts, which are legal agreements to buy or sell an asset in the future at a predetermined price.
While short-selling is not permitted by the Shariah, more and more Islamic institutions and hedge funds claim to offer Shariah-compliant shorting solutions.
