Q&A (Fatwa)

#1170: On The Ruling Of Currency Arbitrage

“Sallam alaykum noble Ya Sheik,please what is Islamic ruling on arbitrage in currency and been involved in it,jazakhallahu khyran,assallamu alaikum”

ANSWER:

Wa Alaykum Salam Warahmatullah Wabarakaatuh.

Alhamdulillah, as for Arbitrage, then it is defined as a form of trading that exploits the tiny differences in price between identical assets in two or more markets. The arbitrage trader buys the asset in one market and sells it in the other market at the same time in order to pocket the difference between the two prices. There are more complicated variations in this scenario, but all depend on identifying price gaps in the different markets.

The Questioner particularly asked regarding arbitrage currency trading which is known as Forex Trading in modern markets.

We have explained FOREX in previous questions, the questioner may make reference to them accordingly:

https://t.me/IslamNodeQuestionAnswers/1291

Barakallahu Fikum
Jazakumullahu Khayran

Abū Āsim

14th Jumadalth Thāni, 1443AH.

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