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Subject : Ruling on Buying Stocks by Installments
Fatwa Number : 608
Date : 20-04-2010
Classified : Transactions & Marketing
Fatwa Type : Search Fatawaa

Question :

I bought a company`s stocks from someone for (36000JDs)-although their actual price at that time was (24000JDs) to be paid by installments over a period of 4 months as I didn't have enough cash back then. Is this permissible? And what is the ruling on the difference between the two amounts?



The Answer :

All perfect praise be to Allah, The Lord of The Worlds, and may His peace and blessings be upon our Prophet Muhammad and upon all of his family and companions.

We see nothing wrong with buying, by installment, the stocks of the companies whose transactions are lawful, even for a price higher than that of cash. This is because Muslim jurists are agreed that the aforementioned form of sale is permissible under the condition that the stocks' price is determined upon concluding the contract; not afterwards. The evidence on this is that Aisha (May Allah be pleased with her) narrated:" Barira came to me and said: 'A'isha, I have entered into contract for securing freedom with my family (who owns me) for nine 'uqiyas (of silver), one 'uqiya every year." [Agreed upon]. In conclusion, the aforementioned transaction is called Tally-trade. And Allah The Almighty Knows Best.






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