Sarfipour: Created page with "{{Author |author = Majid Khoshnoudi |author2 = |author3 = |compiler = |editor1 = |editor2 = |editor3 = }} * '''abstract''' '''The Forex market''' (in persian: [https://ency.feqhemoaser.com/fa/view/%D9%81%D8%A7%D8%B1%DA%A9%D8%B3 فارکس]) is the exchange of different currencies where traders gain or lose through price fluctuations. The simple form of currency exchange has no jurisprudential challenge. Nowadays, due to the expansion of the field of Forex activ..."

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Created page with "{{Author |author = Majid Khoshnoudi |author2 = |author3 = |compiler = |editor1 = |editor2 = |editor3 = }} * '''abstract''' '''The Forex market''' (in persian: [https://ency.feqhemoaser.com/fa/view/%D9%81%D8%A7%D8%B1%DA%A9%D8%B3 فارکس]) is the exchange of different currencies where traders gain or lose through price fluctuations. The simple form of currency exchange has no jurisprudential challenge. Nowadays, due to the expansion of the field of Forex activ..."

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* '''abstract'''
'''The Forex market''' (in persian: [https://ency.feqhemoaser.com/fa/view/%D9%81%D8%A7%D8%B1%DA%A9%D8%B3 فارکس]) is the exchange of different currencies where traders gain or lose through price fluctuations. The simple form of currency exchange has no jurisprudential challenge. Nowadays, due to the expansion of the field of [[Forex]] activity, it has gone beyond its simple form, then this expansion includes the number of tradable symbols in [[Forex]] since it initially focused only on currency exchange. However, today it supports other trading symbols such as metals, energy resources, commodities, shares of stock exchange companies, stock indices and [[digital currencies]]. On the other hand, [[Forex]] has also expanded in terms of trading methods such as leveraged transactions and reverse transactions and overnight swaps requiring jurisprudential research.

==The Significance and Importance in Contemporary Jurisprudence==
[[Forex]] is a market where different currencies are exchanged with each other<ref>Record, Neil, Currency Overlay (Wiley Finance Series).</ref><ref>Yousefi Moqadam, General principles governing the international currency market, p. 25.</ref> and because of its features compared to other markets, it has attracted the attention of economic activists. Among these features are a very large volume of transactions, high liquidation speed, speed of transactions, quick and easy access and no need for initial capital. So, it has doubled the importance of jurisprudential examination of the issue.
Jurisprudential questions about [[Forex]] transactions have made it necessary to examine it in [[contemporary jurisprudence]]: What is basically the nature of [[Forex]] contracts? Are they derived from contracts or are they under the title of Sharia contracts? What is the [[Sharia]] ruling on [[Forex]] trading? Is the general rule about [[Forex]] trading correct, or do different types of [[Forex]] trades require independent examination?
The simple form of currency exchange has no jurisprudential challenge, but today this area has gone beyond its simple form due to the expansion of the [[Forex]] activity field; On the one hand, this expansion is in the number of tradable symbols in [[Forex]]; Because at first it only focused on currency exchange, but today it supports other trading symbols such as metals, energy resources, commodities, shares of stock exchange companies, stock indices and [[digital currencies]]. Also, the expansion of [[Forex]] in terms of trading methods, such as leveraged or leveraged trades and reverse trades and overnight swaps, requires research.
Researches have been conducted in this field, but since [[Forex]] is a new issue in jurisprudence, and on the other hand, the [[Forex]] market is always developing and has new facilities, the need for more and more detailed researches in this field is felt.

==Research history==
{{main|Forex (study resources)}}
Researches have been carried out in this field, among them the article on jurisprudential analysis of the international [[Forex]] market based on its prohibition in Iran's laws<ref>Nouri and others, "Jurisprudential analysis of the international Forex market based on its prohibition in Iranian laws".</ref> and the article explaining the nature and what is the [[Forex]] market and its requirements in Iranian jurisprudence and law<ref>Brarpour, "Explaining the nature and essence of the Forex market and its requirements in Iranian jurisprudence and law".</ref> and Thematics of the [[Forex]] market<ref>Tabatabaeinejad, "Forex market thematics".</ref> pointed out.

==Introduction to the Forex market==
[[Forex]] is derived from Foreign Exchange Market, it is a market where different currencies are exchanged with each other<ref>Record, Neil, Currency Overlay (Wiley Finance Series).</ref><ref>Yousefi Moghadam, general principles governing the international currency market, p. 25.</ref> and traders make profits and losses through price fluctuations.<ref>Tabatabainejad, "Thematics of the Forex market", p. 79.</ref> [[Forex]] is the largest financial market in the world and the most Financial circulation takes place in it.<ref>Dalili, Introduction to Forex, p. 13.</ref> This market is decentralized; That is, it does not have a specific physical location and operates only virtually and on the Internet.<ref>Record, Neil, Currency Overlay (Wiley Finance Series).</ref>
[[Forex]] initially focused only on the exchange of currencies, which are called currency pairs. With the development of this market, what is known as [[Forex]] trading today, has moved away from the first concept and has become wider, which, in addition to currency pairs, includes other trading symbols such as metals, energy sources, commodities, shares of stock exchange companies, stock indices and [[digital currencies]]. supports.<ref>"Symbols in Forex", a simple exchange training site.</ref>

==Types of Forex transactions and their methods==
Understanding how [[Forex]] transactions are conducted will help to explain its jurisprudential nature, and will also clarify whether [[Forex]] transactions are new contracts or can be adapted to [[Sharia]] contracts.
Transactions in the [[Forex]] market are not physical, and the purchased currency or goods cannot be delivered, and profit or loss can only be obtained from price fluctuations.<ref>Tabatabaeinejad, Topology of Forex Market, p. 78.</ref> [[Forex]] is a two-way market; It means that you can make a profit from both the price increase and the price decrease of a symbol.<ref>Brarpour, "Explaining the nature and essence of the Forex market and its requirements in Iranian jurisprudence and law", p. 23.</ref> Even if the commodity is not available in their asset portfolio, traders can still sell it; In fact, he lends the goods to the [[Forex]] brokers and after the price goes down, he buys the goods and pays the loan to the broker and earns profit from the price difference.

Transactions in the [[Forex]] market are divided into five categories. To explain the nature of transactions in [[Forex]], it is necessary to examine the way of trading different symbols separately.
* '''Trading currency pairs:''' In the [[Forex]] market, each currency is marked with a special symbol, and the two currencies that are exchanged are called currency pairs. The first currency is called the base currency and the second currency is called the counter currency. The value of each currency is compared to another currency, which is called exchange rate. For example, the euro is known by the symbol (EUR) and the dollar is known by the symbol (USD), and the symbol of this currency pair is shown as (EUR/USD) and represents the parity rate of the euro to the dollar, where the euro is the base currency and the dollar is the counter currency. The purchase transaction of a currency pair means the purchase of the base currency (Euro) and the payment of the counter currency (Dollar), and the sale transaction means the sale of the base currency (Euro) and the receipt of the counter currency (Dollar). For example, the parity rate (EUR/USD) means the value of the euro against the dollar is 1.04. Simply put, for 1 euro, 1.04 dollars should be paid.<ref>Tabatabaeinejad, Thematics of the Forex market, p. 78.</ref> The logic of placing an order in [[Forex]] is that if the trader predicts that the value of the dollar will decrease compared to the euro, he will place a buy order (EUR/USD), and vice versa, if he predicts that the value of the dollar will increase compared to the euro, he will place a sell order ( EUR/USD). After registering and executing the transaction, if the direction of the market is according to the trader's prediction, he can make a profit by closing the transaction, and if it is contrary to the prediction, he will lose.<ref>"Symbols in Forex", a simple exchange training site; Tabatabainejad, Thematics of Forex Market, p.80.</ref>
* '''Commodity transactions:''' In addition to trading currency pairs, [[Forex]] has provided a platform where commodities such as metals and energy sources can be bought and sold. The trading method in these cases does not have the complexity of currency pairs, and in fact, it is normal buying and selling that is done with dollars. For example, in the exchange of gold and dollars represented by the symbol XAU/USD, one ounce of gold can be bought by paying dollars.<ref>"Symbols in Forex", a simple exchange training site; Tabatabaeinejad, Topology of Forex Market, p. 78.</ref>
* '''Digital currency transactions:''' Cryptocurrencies such as [[Bitcoin]] and Ethereum can also be traded in the Forex market.<ref>"Symbols in Forex", a simple exchange training site; Tabatabaeinejad, Topology of Forex Market, p. 78.</ref>
* '''Trading of economic indicators and company shares:''' In [[Forex]], economic indices such as the dollar index (U.S. DOLLAR CURRENCY INDEX) or the American stock index such as Dow Jones (DJI) and Nasdaq (NDQ) and S&P (SPX) or the German stock index (DAX) and some other countries can be traded.<ref>"Symbols in Forex", a simple exchange training site; Tabatabaeinejad, Topology of Forex Market, p. 78.</ref> Stock can also be bought and sold in Forex.<ref>"Symbols in Forex", a simple exchange training site; Tabatabaeinejad, Topology of Forex Market, p. 78.</ref>

==Brokers==
The expansion of the [[Forex]] market requires an intermediary between customers and the international [[Forex]] market which led to the emergence of brokers who are responsible for deposit and withdrawal services, order registration and communication between buyers and sellers. [[Forex]] brokers are of two types:<ref>Tabadkani,What is trading, types of Forex broker, market maker?</ref>
* Real brokers who have a real presence in the currency market and do real buying and selling with customers' money.<ref>Tabadkani,What is trading, types of Forex broker, market maker?</ref>
* On the other hand, the brokers who are called market makers do not have real buying and selling and have only created a virtual page on the internet and make virtual transactions.<ref>Tabadkani, What is trading, types of Forex broker, market maker?</ref>
Paying attention to the types of brokers is important because some experts argue that [[Forex]] transactions are formal, due to the lack of differentiation of this issue.

==Jurisprudence Review==
There is a difference of opinion regarding the accuracy of [[Forex]] trading. Some jurists like [[Seyyed Ali Sistani]] have not expressed a jurisprudential opinion in this regard and have referred to other jurists.<ref>Sistani, Internet referendum, referendum number: 1155878.</ref>

===Illegitimacy and its Evidence===
Most of the contemporary jurists and researchers do not consider [[Forex]] transactions as legitimate and have presented various arguments against its illegitimacy. These evidences are presented in two categories: first commandment and the second commandment.

====Illegitimacy according to Primary Evidence====
* '''Buying and selling property value:''' [[Seyed Musa Shubayri Zanjani|Seyed Mosa Shobeyri Zanjani]] believes that [[Forex]] transactions are buying and selling property value, not the property itself thus that is why it is not correct since selling is the exchange of property with property.<ref>Shobeyri Zanjani, online poll, poll number: 91305.</ref> This type of transaction is actually a type of contract for difference or CFD that the parties buy and sell without owning currency or shares or goods.
* '''Unreality:''' according to [[Lotfollah Safi Golpayegani]], [[Forex]] trading is not real buying and selling and is actually a kind of betting<ref>Safi, a survey of the Islam Quest site.</ref> because in [[Forex]] no currency is bought and sold, but the trader only guesses the exchange rate and bets that the conversion rate, increases or decreases. When the broker posts prices on his website or trading platform, he actually reads these rates from the spot market as a reference.<ref>Tabatabaeinejad, Topology of Forex Market, p.83.</ref>
* '''Impossibility of delivering the goods:''' [[Nasser Makarem Shirazi]] considers [[Forex]] transactions invalid due to the fact that it is not possible to deliver the goods.<ref>Makarem Shirazi, internet poll, tracking code: 140002270128.</ref>
* '''[[Usury]]:''' Some researchers consider [[Forex]] transactions to include [[usury]]. According to them, the credit given by the broker to the trader on the basis of which buying and selling is done, is actually a loan from the broker, and since he collects his commission after the transaction is closed, then the loan is conditional on receiving the commission and it is [[usury]].<ref>Nouri etc., "Jurisprudential analysis of the international Forex market based on its prohibition in Iranian laws", p. 84.</ref>

====Illegitimacy according to Secondary Evidence====
Some researchers disprove the impermissibility of [[Forex]] trading by citing secondary rules.<ref>Nouri etc. Jurisprudential analysis of the international Forex market based on its prohibition in Iranian laws", p. 88.</ref>
* '''[[La Darar|Harmless rule]]:''' According to some, [[Forex]] transactions cause losses to the market's operators, and based on the harmless rule, [[Forex]] transactions are not legitimate.<ref>Nouri etc., "Jurisprudential analysis of the international Forex market based on its prohibition in Iranian laws", p. 88.</ref>
* '''Arrogance (Maghrour) Rule:''' Some other researchers consider [[Forex]] trading as the reason for deceiving traders due to the presence of speculators and the presence of hidden information and sometimes market manipulation. According to the rule of arrogance (al-Maghrour), he must be the guarantor of the lost property, and there is no way back in [[Forex]] transactions.<ref>Nouri etc., "Jurisprudential analysis of the international Forex market based on its prohibition in Iranian laws", p. 89.</ref>
* '''The rule of expediency in the Islamic system:''' Some believe that disturbing the Islamic system is forbidden. Activity in the [[Forex]] market causes damage to employment and the loss of national reserves and the outflow of currency, and for this reason, it is not permissible.<ref>Nouri etc., "Jurisprudential analysis of the international Forex market based on its prohibition in Iranian laws", p. 92.</ref>
* '''System disruption rule:''' It has been said that the main cause of the global economic crisis is the prevalence of this type of transactions, and according to the system disruption rule, [[Forex]] trading is not correct.<ref>Arabiyat and others, "Al-Dawabat al-Sharia for Electronic Commerce in Al-Mamaalat al-Dawliyyah", p. 173.</ref>

===Its legitimacy and evidence===
Some jurists, such as [[Seyyed Ali Khamenei]], consider [[Forex]] transactions to be correct in themselves by observing [[Sharia]] and legal regulations. If the transactions are real, and currency is bought and sold, and the broker does not receive profit for giving credit; these transactions are correct.<ref>Khamenei, Internet referendum, date 26/02/1400 and referendum number 6z669g2.</ref>
Those who believe in the legitimacy of [[Forex]] transactions consider the evidence of illegitimacy to be incomplete, as a result of the applications and generalities of Ahalallah al-Ba'i<ref>Baqarah, 275.</ref> and Ofwa al-Aqoud<ref>Maedeh, 1.</ref> include [[Forex]] transactions and these transactions are condemned to be true. Ebrahim Brarpour considers [[Forex]] transactions to be in accordance with rational principles and considers the approach of Islam in rulings of transactions to be a signature, and according to the basic principle of correctness of transactions, he ruled on correctness of [[Forex]] transactions.<ref>Brarpour, "Explaining the nature and essence of the Forex market and its requirements in Iranian jurisprudence and law", p. 23.</ref>

==Footnote==
<references />

==References==
* Brarpour, Ebrahim, "Explaining the nature and essence of the Forex market and its requirements in Iranian jurisprudence and law", Adalat Private Law Research Journal, No. 10, Fall and Winter 2017.
* Tabadkani, Seyyed Mohammad, -market-maker-and-ndd/ "Types of Forex brokers, what is market maker?", Iranian trader website.
* Dalili, Saeed; Arab, Saeed, Familiarity with Forex, Tehran, Publisher: Nevisandegan, second edition, 2007.
* Tabatabaeinejad, Seyyed Sadeq, "Thematics of the Forex market", Marafet Monthly, No. 281, May 2022
* Arabiy,at Wael Mohammad Abdullah; Obeid Al-Aoun, Ahmad Abdullah, "The Islamic Laws of Electronic Commerce in International Currency", Jordanian Journal of Islamic Studies, vol.7, no.1, 1432 AH.
* What is Forex?, Internet article, Chart Iran site.
* Yousefi Moqadam, Abbas, "General principles governing the international currency market", Payam Noor School of Law and Theology, Tehran Center, 2013.
* .betsy, waters (2008), increase foreign exchange retai
* . ?carmin, crig (2008), How is a poor money trader traveling
* .Chen, James (2009), Essentials of Foreign Exchange Trading, Retrieved 2016 15 November
* .Hicks, Alan (2000), Managing Currency Risk Using Foreign Exchange Options, Retrieved 2016 15 November
* .Johnson, G. G. (1985), Formulation of Exchange Rate Policies in Adjustment Programs, Retrieved 2016 15 November
* .Record, Neil, Currency Overlay (Wiley Finance Series)

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