Question
Assalamu Alaikum wa Rahmatullahi wa Barakatuh I would like to seek clarification regarding a financial matter. I invested money with an individual who conducts trading activities. I received a profit from this investment. However, after receiving the profit, I discovered that he executes trades using leverage. My understanding is that leverage-based trading involves riba and is therefore haram. The trader has stated that he is aware that using leverage involves riba, and that he personally bears the sin for engaging in it. He claims that I am not responsible and that my profit is permissible. My questions are: - Is the profit I received considered halal or haram? - If the trading method involves riba, does that invalidate my share of the profit even if I did not directly engage in the leveraged transactions? - If the income is not permissible, what is the proper course of action with my profit money according to Shariah ? Jazakum Allahu khairan for your guidance
Islamic Ruling & Answer
VerifiedWalekumussalam warahmatullahi wabarakatuhu,
(1) Leverage trading usually involves interest (riba) because the broker or financial institution lends you money to open bigger positions, and interest is charged on that loan. In Islam, riba is strictly forbidden, whether hidden or direct.
(2) If you invested knowingly or unknowingly with someone who trades using riba, the profit is considered impermissible (haram).
Just because the trader says โI will bear the sin, not youโ is not enough, because your money was used in the haram trade and the profit from it is also haram.
(3) If the profit is haram:
Do not use it for yourself.
The best way is to give it away as charity (sadaqah) without expecting reward. This keeps you safe from sin.
The original capital you invested, if returned to you legally and without haram involvement, can be kept, but separate the haram profit and give it as charity.
Answered by
Mufti Tosif Qasmi
February 28, 2026
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