Contract for Difference (CFD)

Question

UPDATE 1:

So those sharia compliant CFD's, how are they different interms of gambling from the non sharia complient CFD's? As even the non sharia complient CFD's have no interest if you don't hold your contract overnight. I don't understand how those sharia complient CFD's reduce the gambling element of CFD's?

ORIGINAL QUESTION:

Anyone know of any rulings about Contract for Difference (CFD) trading according to Islam? Is it considered haraam or halaal?

I'm interested in the sunni > hanafi > deobandi view if possible please. If that's not possible, than any sunni view is fine.

Here is a intro video if you don't know what CFD trading is: http://www.youtube.com/watch?v=X-s4IY98InI

Please note, that interest is only charged if you hold the trade overnight, i.e. no interest if you don't hold overnight.

Answer 1

I'd be skeptical on something that's "certified" sharia compliant because it's easy to manipulate some loophole. It's more on how and why you do it. In Islam, motive matters. Allah knows your intentions.

If it's completely unpredictable, it's probably like gambling. If you have a good reason to expect a price to go where you want it to go or if you can manipulate the results, it's not so much gambling.

However, it is similar to the negative impact of gambling and riba in that it doesn't contribute much to the world and seems like a zero-sum deal. One person benefits, the other loses out, and the world doesn't improve much. You should probably avoid it.

Answer 2

CFD trading resembles Qimaar (gambling), in which two people agree that whoever loses the bet on an uncertain outcome, will pay the other a specific amount. Additionally, interest is applied daily to open CFD contracts by many CFD providers. In short, CFD contracts contain elements of interest and gambling, both of which are explicitly prohibited in the Holy Quran. It is therefore, not permissible for a Muslim to trade in CFD.

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an excerpt from this site

But as found in this and this there are some Shariah compliant CFD accounts, which which allows trading in Islamic way. However it is better to stay away from CFD and stay safe.