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stockexchange is halal or haram..

Started by imrankhawaja, June 27, 2016, 03:15:55 AM

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imrankhawaja

I just want the views from members , whats about the business of shares in stock exchange ?

I think its against the quran . its something like game of chances . the harms are more than benefits.

8 years ago I start stock exchange and at that time I lost all of my money which I earn by hard work so I figure it out  that may b I did something which I should not .that's why its a lesson for me not to engage such type of earnings..

and what I did ,  do I have to worry about it ? becoz I also earn from it in beginning and suddenly had a huge loss .. that all my savings lost ..


Man of Faith

Actually it is so that you own a part of the company. That it fluctuates in value is due to its estimated purchase value depending on the market and currency is a factor. It is not exactly a "game of chance" even though some risks are involved.

Shares are often issued in order to raise funds for investments.

Be well
Amenuel
Website reference: [url="http://iamthatiam.boards.net"]http://iamthatiam.boards.net[/url]

imrankhawaja

hmmm, but by default every share holder is a part of company..  and after that I realised its all gambling lie in a casino, sharing market is something first they boost the price and suddenly they drop it down, its mean on both occasion company is in benefit whereas share holder suffer loss.. its a big game , in the hands of some powerful investement corporations.

Man of Faith

Yes, capitalists or greedy bastards adheres to fraud, but that happens not only in this kind of market system. A problem is they can often get away with it. Many times it is a crime, if someone can expose them, but often it goes unnoticed.

Shareholders can vote and it is dependent on how big percentage of shares they possess that determines how much influence they have.

You cannot do whatever you like in a business like this, it is regulated by laws.

Stock exchange is not gambling on a fundamental level because it is SUPPOSED TO be the company's value that determines the value of each company share. And when you buy a share with its value you own a percentage (share) of that company. Usually once per year a healthy company also pays its shareholders a sum of money as a share of the profits which is dependent on the number of shares and not the value of each share you own.

Not that I love capitalism, but I would not call the principle of stock exchange gambling per se. It is not more gambling than if you supported a friend to start a business by becoming an investor, asking your friend for a share of the profits in return and then later sold that share to someone else. The money you gave your friend went into the company's property.

Be well
Amenuel
Website reference: [url="http://iamthatiam.boards.net"]http://iamthatiam.boards.net[/url]

Jafar

Quote from: imrankhawaja on June 27, 2016, 03:15:55 AM
I just want the views from members , whats about the business of shares in stock exchange ?

I think its against the quran . its something like game of chances . the harms are more than benefits.

Think again.... from the selling their shares of the company, the company will have capital to do expansion, recruitment, generate more value to their customer.

Quote
8 years ago I start stock exchange and at that time I lost all of my money which I earn by hard work so I figure it out  that may b I did something which I should not .that's why its a lesson for me not to engage such type of earnings..
and what I did ,  do I have to worry about it ? becoz I also earn from it in beginning and suddenly had a huge loss .. that all my savings lost ..

I don't believe you lost ALL of your money.
It's very very very rare to have company share went down to zero..

The valuation of company's shares goes up and down.. that's natural.. depending on the performance of the company.
But in the process.. the company will do the things I mentioned above.. which generate value to the society as a whole.

If you're not too greedy, buy the shares of 'well established' companies..
The valuation of their share will only moves slightly... less risk.. but also less potential gain..

imrankhawaja

Quote from: Jafar on June 27, 2016, 05:50:18 PM


I don't believe you lost ALL of your money.
It's very very very rare to have company share went down to zero..

The valuation of company's shares goes up and down.. that's natural.. depending on the performance of the company.
But in the process.. the company will do the things I mentioned above.. which generate value to the society as a whole.

If you're not too greedy, buy the shares of 'well established' companies..
The valuation of their share will only moves slightly... less risk.. but also less potential gain..

trust me bro. what exactly happen, suddenly I see a boost in a company call JHSL jahangeer Siddique group in Pakistan ,

I buy a share at face value 40 rs per share, and after two three days the market freeze in the (freeze) position you are unable to sell any share as there are multiple sellers but no buyers.. so freeze cap open when face values comes at 9 rs per share ..

I buy 20000 shares and think about what I left... and when freeze open I was also unable to sold at nine rs some how I manage to sold at  6 rs per share... and when I was purchasing the shares I put all my investement in one company the biggest mistake ever... anyway . its all game .. big game we are small pllayers in all of it,, about two years ago I come to know this company did a fraud on big llevel and somebpdy exposed them ...and it was in news that they arrested some of the company directors..

imrankhawaja

@ ammanuel

its something like power and timing what you can say,,

just for a example I will share some more tricky things of these bastards.. what they actually do ..

let say a company of coke... and their dealers... now dealers r playing a main role between company and customer...

one rich dealer buy all the stock from market and now he sale the stock to his own dealer and then buy again... like he buy from company at one pound and sell it to other dealer at 2 pound and buy again at 3 pound and sell it to other at 4 pound , noew the old stock in market is finished and customers need coke but price is very high like 4...

and suddenly they open the stock and small dealer who buy at 4 pound , when coke send another shipment of new stock the rich dealer again buy it from company and now he sell at original price,, its mean the dealers who have 4 rs stock they are in huge loss...

that's how this market work,, its not gambling its something you can say.. abusive use of authority...

truthseeker11

Salaam Imran,

When you trade in the stock market you have to learn everything about trading before you risk real money. It is just like going to school for any other profession. If you start to perform surgery on someone without going to medical college first, and training under a skilled surgeon, guess what is going to happen.

In trading you have to MASTER 3 M's:

1. METHOD (entry setups, fundamental and technical analysis)
2. MONEY MANAGEMENT (stop loss, exits, targets, size of investment - SETS)
3. MIND (psychology of trading, how to control fear and greed)

If you start trading without mastering these 3 there is 100% chance of you losing.

You violated some of the basic principles. Some of the mistakes you made were:

1. You invested in a company without doing your due diligence and research about the company. That is why I trade only rock solid companies with a tried and tested good product, which are consistently profitable year after year, with certain entry criteria that have to be present. (METHOD)

Additionally you bought the shares at the top when the price had already gone up a lot. Generally you wait for a pullback to a level determined by technical analysis and then buy. (METHOD)

2. You violated basic principle of MONEY MANAGEMENT by putting all eggs in one basket. That is why I never invest more than 2% of my money in one company. Even if I lose all my money in that company (which is very difficult in the first place), I will have to lose entire investment 50 times before I lose it all, which is almost impossible.

In your example, if I had 800,000 to invest, and share price was 40, I wouldn't have bought at 40 to start with, and waited for pullback to daily 20 or 50 moving average or 38.2% Fibonacci retracement. Even if I bought at 40, I would have bought only 400 shares, which would be 2% of my money.

3. It appears that you succumbed to the human emotion of greed (MIND), because you put all eggs in one basket trying to get rich quick. In trading you have to have realistic expectations and make money slowly over time, winning few percent per year and then reinvesting over and over again, just like any other business.

So as you can see you violated all the 3 M's. If you can master the 3 M's and learn everything about how to trade, it will become extremely difficult for you to lose, and your chances of success will be very high.

Please go through my following thread in which I have talked about trading in detail and posted many lessons to learn how to trade. I focus mainly on day trading, but the same principles can be applied to any form of trading, whether buy and hold, or swing trading, or day trading, because they are all fractal:

http://free-minds.org/forum/index.php?topic=9607734.0

Salaam
6:116 And if you obey the majority of those on Earth they will lead you away from God?s path; that is because they follow conjecture, and that is because they only guess.

10:36 Most of them only follow conjecture. While conjecture does not avail against the truth in anything. God is aware of what they do.

2:170 And if they are told: ?Follow what God has sent down,? they say: ?No, we will follow what we found our fathers doing!? What if their fathers did not understand anything and were not guided?

28:75 And We will extract from every nation a witness, then We will say: ?Bring forth your proof.? They will then realize that all truth belongs with God, and what they had invented will abandon them.

imrankhawaja

peace truth seeker,

my brother i was aware about these things, already but what actually happen. i get my lesson from lord not to earn easy money,lol

so when God wanted to give you loss nobody can save you from it.. this stock thingie was old like 8 years ago..
#after that i was very careful of taking and risking my money,,

guess what happen just last year,, i again lose lot of my money whatever i earn in last five years.. and that time i even start argue with my lord , thats whats going on.. but soon i reaise God is telling me something again and again .. that all this we have to leave behind one day anyway so .. from that day i decide not to worry much about these money thingie.. it just give me headache while earning and while losing... i m just you can say tired from earning, saving as well as loosing ,, wait a minute,, i dnt have anything to lose and that thing keep me relax  :rotfl:

i still beleive profit and loss are part of life and God is also testing us by different things so we should pay thanks to God in every condition... sorry i wwas being out of topic

about stock i try to do some forex shit but due to some reasons i could not... from that stock loss i was just uncomfortble there so i moved to europe and this time i was thinking i will win the game but again i suffer a loss although it was due to my personal fault of trusting people ,, but what i learn , you cannot escape from loss ...or profit..

peace

truthseeker11

6:116 And if you obey the majority of those on Earth they will lead you away from God?s path; that is because they follow conjecture, and that is because they only guess.

10:36 Most of them only follow conjecture. While conjecture does not avail against the truth in anything. God is aware of what they do.

2:170 And if they are told: ?Follow what God has sent down,? they say: ?No, we will follow what we found our fathers doing!? What if their fathers did not understand anything and were not guided?

28:75 And We will extract from every nation a witness, then We will say: ?Bring forth your proof.? They will then realize that all truth belongs with God, and what they had invented will abandon them.


Adam The Warner

Quote from: imrankhawaja on June 27, 2016, 03:15:55 AM
I just want the views from members , whats about the business of shares in stock exchange ?

I think its against the quran . its something like game of chances . the harms are more than benefits.

8 years ago I start stock exchange and at that time I lost all of my money which I earn by hard work so I figure it out  that may b I did something which I should not .that's why its a lesson for me not to engage such type of earnings..

and what I did ,  do I have to worry about it ? becoz I also earn from it in beginning and suddenly had a huge loss .. that all my savings lost ..

Stock exchange, you have to dig deeper. Who on earth would want to give a company their money? Like there are no people around the world who can use your money to buy clothes and food?

I think it's a form of modern gambling. There are millions of people that are starving, and yeah, you want to tell me that you are going to invest in a company?

You are doing no work, no efforts, all you have to do is to give them your money, and in exchange you will be able to receive extra money. That's exactly how gambling works..
May He the Hearer grant us victory in the worldy life, and Hes abundance of Light on the Day of Judgement, and may He the King of kings grant us the eternal Paradise. Peace.

~Natasha~

 I think you have to be educated about the situation.  Riba or interest is clearly forbidden in the Quran, however there is a possibility that you could have a leg in the stock market if no interest was involved or if you knew what you were doing - the main goal is to buy low and sell high which could be interpreted as game of chance, however if your reasons are to invest and support a company or cause you believe in there could be benefit. It would boil down in the end to your intentions. I know many IBM retiree's who are quite financially fluent because they bought stock into the IBM company to support the company they spent their lives working for and felt the company was a cause and company they could support. They invested themselves in the company and the company invested in them as a return and those who bought stock into the company received benefit in the end.   These people's intentions were not to buy low sell high.  I would have to study more on Islamic and Quranic economics but the only thing clearly forbidden is interest.  The rest would up for you to research and decide for yourself.

In America, its almost hard to get around with no interest so research research and research.  Example, our company requires all employees to take a 401k which has interest involved. The 401K administrator borrows your money to play the stockmarket which personally makes me a little uncomfortable but I don't have much choice.  It's not an option that employee's could opt out of, so in some cases there is no choice. In regards to the stock market with buying or selling stocks and the like, it can be a tricky situation and you have more options to consider.

If you are wanting some money smart investment options.. possibly savings bonds and other avenues could accomplish your goals with a non interest bearing route.  The bonds take longer to mature but as far as I understand, interest is not used or used like other things.

HP_TECH

I wish brother & @Hanslan could address this. He's very knowledgable about finances.
Natasha is right, there is no way out of interest in the US. Unfortunately if you simply place your money in a regular savings account you are losing money due to inflation. I know hear about investing into insurance policies which give higher interest rate return.
I also feel uneasy about such things, and I will be seeking Allah's Help concerning this matter.
إِنَّنِي مِنَ الْمُسْلِمِي

My Lord I repent to you for anything I uttered concerning You for which I have no knowledge of. Indeed You are the Oft-Forgiving, Most Merciful

imrankhawaja

i just find no more interest in money i dnt know why from last one year i start hating to earn money...

i feel the money thing make me feel distract i lose a lot... already , and i see the power of money in negetive sense..

when i had money i feel lot of greedy individual around me... but i also thankful to the money due to which i see lot of faces and i m relaxed i get rid of all that hypocrates ...

but right now i stop doing all investements , i stop doing any job/business .. you can say i m on long holidays of earning money.. i dnt know when it will finish..  you guys can say that i m giving a test of money or may b i m still unable to understand what money is... :hmm

money is responsible for lot of things in my life... even it give me advantages only in sense to lose more people and relations due to this thing.. which is infact another loss  :rotfl:

lot of times i help people , give them credits but in the end they refuse to pay back and i remeber when they were in trouble and i helped them ,, so this thing also make me feel confused that if money was not there atleast i saved that relation ...

but anyway .. how you feel when you earn something by spending your time/ hardwork/ energy/ mind .. and suddenly you realised you just did all the effort to fill somebody else pockets or problems...

and lot more problems i had with money so right now i decide to punish money  :police: the rest of the money i had i sentenced that money to jail i mean in lock lol

hanslan

Salam.

Halal or haram depends on what you do in the exchange. 

Basically a stock exchange is a market place where you buy goods in this case the goods can be any of these (only): equities/stocks/shares, bonds (debt or i-o-u instruments that companies issue) and options/derivatives (speculative bets issued by investment banks and companies listed on the exchange ? these are the instrument that is causing the last and current global financial crises).

The money that you place to buy any of those ?goods? goes to the seller i.e. the money rarely goes to the companies that bears the name on the ?goods? be it shares, bonds and options.  Example: Apple does not get your money when you buy Apple shares from the stock exchange.  Many of the trades that goes on the exchange are called secondary trades ? trades amongst buyers and sellers.

The rare occasion that Apple gets money from you is when you buy a new share/bond issuance direct from Apple in which case Apple will issue a prospectus.  Only on occasions like these your money goes to Apple for whatever purpose it was meant to be.

Valuation of stocks/shares are normally based on the company?s ability to generate profit.  And that profit against its share capital base provides a ratio of return.  This ratio of return is measured against the share price to come up with a Price to earnings ratio which tells you the level of speculation/premium that is on the stock.  A higher ratio means higher speculation or its over priced.  This ratio normally called the PE ratio translate like this: PE = 10 provides 10% return, PE=20 provides 5% return, the higher PE actually provides lower returns = higher speculation on the stock.

Valuation of bonds will depend on interest rate movement and some instances based on foreign xchange movement.  Sometimes its linked to share prices if the bonds can be converted to shares and when this happens the bonds don?t get repaid but instead repayment is via conversion to shares and the eventual sale of it. 

Is buying and selling of debt haram? Most muslim jurisprudence says it is haram but some say it is not ? that is why the emergence of ?sukuk? an Islamic IOU.  A Sukuk is generally like a bond with a Syariah twist.  A bond is a bond with the expectation of fix interest income and principal repayment at redemption ? yes its normally a change of name to the same product to make it halal.

But the Quran is clear on debt ? theres no profit to be made from debt ? it?s an instrument necessary in an economic system to facilitate certain transactions ? and in some cases its better to forgive debt.  In fact, one of the key instrument to correct global financial problems we faced today is debt forgiveness amongst nations, public and private sector ? a one off global financial adjustment ? anyway that?s a different story. 

Valuation of derivatives/options are mathematically complex ? the maths are there to fool you - its pure speculative/gambling - so stay away from it.   The world needs to get rid of this financial weapon of mass destruction.

So buying and selling shares are just like buying and selling commodity.  Buy low sell high.  But most people buy high and lose everything because these people are not disciplined nor accustom to the stock exchange. They usually end up chasing speculative run up of a share price and then become greedy (some say its riba due to overpricing) and expects returns of  >100% from their investment, and in most cases people lose money with expectations like this ? like gambling ? spend little win big.

Warren Buffet does the same strategy ? buy low and sell high ? he buys those shares that have gone down or undervalued based on his research and waits for it to go up and then sell.  Of course there are risks of making losses, there is no guarantee you can make profit just like any business.

Just like any business, stock investments and trading requires skills in research, timing, patience and discipline ? even for a day trader (someone who tries to buy and sell on the same day and make a margin).  There is- no such thing as spend US1 to get US1000 in a day but losing the US1 is a sure thing.

Thus in conclusion, for share trading and investment, halal or haram depends on your intention and actions and this applies to any business.

Some contention: the definition of riba. 
Some people include the concept of ?receiving rent without working? as riba.  Just like buying shares and you get dividends ? some people classify dividends as riba.  Under this concept the dividend from stocks are considered haram.   This concept calls for a total revamp of the current economic system where nobody can have excesses in their holdings of wealth ie any excess are given away.  Thus for those who invest in houses, no rent can be earn; he can only make money from capital appreciation after selling.  Those with extra money cannot earn dividends/interest fixed or variable, in fact they have to pay the institutions to keep the money for them.  This will impact human civilisation to the point where the wheel needs to be reinvented.  A mind shift is required ? to motivate people to produce, trade and distribute wealth 

Abdul-Hadi

Greetings and Peace, all  :group:

Stocks do not generate interest income. Bonds do. Some stocks generate dividends regularly, some irregularly, and some not at all. When properly researched, buying and selling stocks is not gambling--although just like any other business, returns are not guaranteed. Capitalizing business has many benefits, including creation of jobs, economies of scale, and creation of products (such as modern medicines) that can't be created otherwise. 

Riba can be understood one of several ways; one way is any form of interest; another (middle) view is anything that is an excessive burden. For a person that has sufficient income and pays a credit card on time, it isn't an excessive burden. For a person living paycheck to paycheck, the credit card with interest rates of 29% is an excessive burden. To take advantage of a person's situation is riba in this view, even if interest is not involved. An example is price gouging.

I do find the Islamic banking models to be interesting, but that's going on a tangent from stocks and bonds...

ALLAH knows best.

:peace:

~Abdul-Hadi