Shariah Compliant Investment Holding Term/Duration

Question

I've referred to a lot of blogs, articles and documentation about shariah compliance in stock market investments but have failed to find the limits about the minimum duration to hold on a stock before you can sell it.

There is a perspective (like at islamweb.com) where people think of intraday trading as haram because you have not yet received the delivery of the stocks yet, so selling without delivery would make it haram.

I've also read that trading is altogether haram and investments are halal whereas another article which states conditions under which intraday trading can be halal.

There are many perspectives around the same with their own valid points. I prefer to be safe so I chose to restrict myself to investing rather than trading. The main unanswered question here is what is the difference between the two in the view of Islam... is selling the stock as soon as I get the delivery of it (around 2 days) considered as an investment or is there a larger minimum duration that I am supposed to hold it for?

Answer 1

If it was permissible to buy the particular shares (depends on conditions like whether the business is halal and whether it has physical assets etc.) then it is permissible to sell them at any time.

Among the conditions for a valid sale (بيع) there is none that requires a minimum holding period, although you must ensure that you have ownership and possession:

لا تبع ما ليس عندك

Do not sell what you do not possess

^{— Abu Dawud}

من اشترى طعاما فلا يبعه حتى يستوفيه ويقبضه

Whoever buys food, he should not sell it until he has received it in full and taken possession of it

^{— Muslim}

To ensure this, the cautionary approach is to wait for settlement. For further information on Islamic finance please try to find books by e.g. Mufti Taqi Usmani.