Spread trading - stocks and shares = gambling?
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Peace be upon you.
I have been looking at a potential career choice, as one of my colleagues is already doing this on a part time basis and is quite successful at it at times.
What he does is known as spread trading or spread betting. This 'gambles' on the behaviour of shares and what they will do. Of course no one can tell the future, but probabilities can be calculated that can yield a favourable result from time to time.I have read up on Ya-Seen-Ra, and it's meaning denoting 'ease'. As the money can be made as easily as it is lost - would spread betting constitute an act that I should not be partaking in? There is a benefit (more money=better living standards) and a bad part (can lose the shirt off your back).
Can someone please point me in the right direction about this.
Thank you.
d -
Peace be upon you.
I have been looking at a potential career choice, as one of my colleagues is already doing this on a part time basis and is quite successful at it at times.
What he does is known as spread trading or spread betting. This 'gambles' on the behaviour of shares and what they will do. Of course no one can tell the future, but probabilities can be calculated that can yield a favourable result from time to time.I have read up on Ya-Seen-Ra, and it's meaning denoting 'ease'. As the money can be made as easily as it is lost - would spread betting constitute an act that I should not be partaking in? There is a benefit (more money=better living standards) and a bad part (can lose the shirt off your back).
Can someone please point me in the right direction about this.
Thank you.
dKhi- Salam. Ofcourse we know tht even in business where money is invested we can be at loss but such has been carefully calculated 2 the best of our abilities but the above seems 2 be more like a bet n then the 2nd underlined part says it all. Thus i believe this falls under the category of gambling(maisar) n we shld abstain from it. Obtaining money through ease has nothing 2 do with gambling since one may easily invest a lot of money n tht wldnt be gambling in any sense. Gambling is actually when individuals make money 2 the loss of others or in other words ur killing others 2 improve ur lifestyle like in bets. GOD Bless!
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Peace Darcus,
I think such action is unrighteous because you are playing with peoples' livelihoods. Although the stocks may look like nothing more than a computer game, please keep in mind the people who spend their lives working in the companies whose shares are bought and sold without a second thought.
If you believe in the product that a company produces, and feel that it is useful for the betterment of humanity, then long-term investing in such a company is a good idea. That said, I personally no longer invest in public stocks even if I believe in the product because I feel the stock exchange system is corrupt.
peace
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Peace be upon you
I think I should learn to trust my heart and my own understanding more.
Thank you.When I said 'potential' career choice - there was no real impetus for me to go ahead and do it - otherwise I would have by now. It doesn't feel right, if you understand.
What this situation has also made me ponder upon is Ya-Seen-Ra. I think I am beginning to see how we are taught from time to time from Allah, whom I thank most of all.
Peace out
d -
Peace
I have just started trading future contracts. This is similar to spread betting but there are a few benefits. Broker commissions are low, maximum ?5 to buy and ?5 to sell. The spread charge is very low, usually 0.5 of a point, which means ?5 buy/sell combined.
I would not recommend spread betting for three reasons
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Very high spread means market must move in your favour a large amount to break-even.
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Spread bets are not dictated by market-forces. If there is a buyer of a bet, there is always a seller (the spread betting company). With futures, a limited amount of contracts are made available, so there must be a willing seller for there to be a buyer.
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You cannot sell at any time, only at a pre-arranged date.
I do not recommend betting on individual shares, as unexpected news can loose you a lot of money. I would only trade indices. I prefer the FTSE 100 index (UK), although the Dow Jones IA, S&P 500, and NASDAQ (USA) are popular but involve having some currency in dollars, different $ per point, and possibly U.S. taxation! Different markets behave slightly differently, so it is best to specialize in one.
My break-even with futures is ?15, and because you get ?10 per point, this means that the market only needs to move 1.5 points in your direction to break-even.
If you choose to do spread betting/futures my poem about the stock market might help
Go with the flow,
Bend with the trend,
Make the trend your friend.
Et alia ad infinitum.Best wishes
Mr. Mister
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Peace be upon you darcus
I used to believe that spending money on stocks and shares was gambling. I believed this because you put money into something and hope it goes up in value. However, with time, I realised that this opnion was erroneous and I will tell you why.
What you are doing is investing in other people's businesses. Of course you hope the value of your share in the company goes up, but of course it may go down. This is no different to running a business (as in you put money in and hope your business may be successful). It is a risk (as is anything in life) but it does not equate to one betting on where an arrow will land on a dartboard. Stocks and shares are a vital component of any decent economy. Of course investments and investors must be regulated, but this does not mean the whole thing is bad.
As for your friend, does he gamble in a bookmakers or invest the money in the actual shares. It is an excellent question you pose and it is important, IMO, to establish our principles before we answer it. With my principle having been established I would have to say there is nothing wrong with it, although I cannot help feeling uncomfortable with it!
Roshan
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peace,
I personally think its dodgy ground. If the money is being used for positive development, then thats fine, but if the money invested is not really beneficial, then its suspect.
Wakas
Peace Wakas
I don't understand your point. What darcus's friend does with the money is his own business and in no way reflects on the intrinsic nature of how he got the money.
Roshan
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Gambling is actually when individuals make money 2 the loss of others or in other words ur killing others 2 improve ur lifestyle like in bets. GOD Bless!
Peace
I disagree with your point. If McDonalds improves itself and puts BK out of business, that would contribute gambling according to your quote. This is of course untrue. Stocks and shares are investments because you own it until the company goes bust. Gambling is to do with a single event. Defining gambling is difficult, but IMO your definition is not correct.
Roshan
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peace Roshan,
I was referring to the money invested, not what the person would do with the money gained.
I see spread betting differently to investing in a company. I see nothing wrong with the latter, apart from general considerations, i.e. ethical company etc.
Wakas
