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Dividends from options

Fatwaa ID: 1202

Asalam alaykum
If a stock makes its profits by selling Options. Then distributes those profits from options as dividends. Will these dividends be halal ?

In the Name of Allaah, the Most Gracious, the Most Merciful.
As-salaamu ‘alaykum wa-rahmatullaahi wa-barakaatuh.

Options are haraam. If a company makes its profits from options and thereafter gives its shareholders dividends solely from the profits of the options, then the dividends will not be halaal. They may be given away in charity. However, if the dividends are from a number of things which include options, then a portion of the dividends will have to purified, pro rata the haraam profit ratio.

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين


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