Why Is Future Trading Prohibited in Islam?

Future trading is considered haram (prohibited) in Islam due to several key Shariah violations:

Uncertainty (Gharar) – In futures contracts, transactions involve goods that do not yet exist, with prices set for a future date. This uncertainty and lack of clarity lead to gharar, which Islam forbids.

Gambling and Speculation (Qimar & Satta) – Many traders engage in speculation rather than actual buying and selling. Since profits and losses depend largely on price fluctuations and chance, this resembles gambling, which is strictly prohibited in Islam.

Selling Without Ownership – Islamic principles require a seller to own and possess an item before selling it. However, in futures trading, people often sell assets they do not physically own, violating the hadith:

"Do not sell what you do not possess." (Tirmidhi 1232)

Interest (Riba) – Futures trading often involves interest, especially when using leverage or deferred payments. Since riba is strictly forbidden in Islam, this further makes futures trading impermissible.

Due to these violations, most Islamic scholars consider future trading haram.