Derivatives
Are CFDs (contracts for difference) halal?
Read our methodology and editorial policy.
Summary
CFDs are impermissible by the strong majority of contemporary scholars. The trader never owns the underlying asset — it is purely a contract to exchange the price difference, which lacks the basic requirements of a valid sale.
The reasoning
A CFD does not transfer ownership of the underlying instrument. It is a synthetic bet on price movement, settled in cash.
Classical fiqh requires a sale to involve transfer of a tangible thing (ayn) or a defined commodity. Pure price differential contracts do not meet this requirement.
CFDs also typically carry overnight financing charges (riba) and use high leverage (maysir).
Scholar citations
"Impermissible — no underlying ownership"
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