Stocks
Is short selling halal?
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Summary
Conventional short selling is impermissible. It involves selling shares the seller does not own (bay' ma laysa 'indak) and typically requires borrowing shares against an interest-bearing fee.
The reasoning
Short selling requires borrowing shares from another party and selling them, with a promise to buy them back later. The seller does not own the shares at the moment of sale.
The share-borrowing fee is interest on a loan of fungible items — riba.
Salam-style contracts (paying in advance for delivery later) are permissible in classical fiqh but do not match the structure of stock-market shorting.
Scholar citations
"Impermissible — sale of what one does not own + riba on borrow fee"
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