QABD AND SPECULATION ISSUES ON CONTRA TRADING IN STOCK TRANSACTIONS: SHARIAH OUTLOOKS

Abstract

Contra Trading is a stock purchase transaction that occurred within four days and does not require a capital even can be borrowed from the broker. Investors are allowed to start selling stocks on the first day of the transaction, while the possession of stocks to the investor's account will only be valid on the last day of the transaction (T + 3). Consequently, the question arises regarding to the practice of qabd, if investors sell stocks to a third party before the stocks credited to his account. Moreover, it related to the speculation, because applicants can buy and sell stocks in a short period with the expectation of gain. This led them dealing with the risks if the market price changes against expectations. Does this activity legalize or equal to gambling in the Islamic perspectives? Therefore, this study aims to examine when does the validation of qabd ownership happened and to examine the speculation existed in contra trading and analyse the position of contra trading in stock transactions according to Islamic perspective. This study is a qualitative approach using content analysis, while semi-structured interviews data is only to support this study. The study found that the qabd status and the speculation that exist were Shariah-compliant, whereas the implementation of qabd in contra trading is subject to the sale of stocks, whilst the speculation existed is allowed in Islam. The implications of this study will provide useful contribution to the relevant institutions such as Bursa Malaysia towards an effort to make the contra trading transaction of Shariahcompliant.