Disadvantages of Futures Trading

There is another aspect of trading through futures that must be recognized and taken into account, as these derivative contracts - despite their many benefits - involve some negative aspects that can be summarized as follows:

Futures contracts are a complex financial product and difficult to rely on if one does not have sufficient experience qualified for it.

Futures are traded on margin using leverage of up to 10%, which poses a high degree of risk, as the trader is threatened with losing the entire capital if the markets move in the opposite direction of their expectations.

Trading futures contracts is limited to large values of commodities or any financial asset; for example, a futures contract for oil involves trading the value of 1,000 barrels at once.

Is Futures Trading Forbidden?

We initially wondered what futures in trading mean? And is futures trading forbidden? It is time to address the second part of the question, and although the general ruling on trading in its broader sense is permissibility according to what many religious institutions have affirmed and what has been stated in the fatwas published online, many scholars have specifically deemed futures contracts to be forbidden.

#فيوتشر Do not make the furnace yourself