How is it to buy shares in the stock market? If a company's basic business is halal, but a small part of its income comes from haram sources such as interest, is it permissible to buy that company's shares? And what specific criteria have the scholars laid down for shares to be halal?

1. The basic status: a share is partnership in the ownership of a company (musharakah) — if the business is halal (textiles, food, technology, pharmaceuticals), buying shares is basically permissible; the shareholder shares in profit and loss.

2. A company with a haram business: if the basic business itself is haram (alcohol, gambling, interest-based banking, obscenity), the shares are absolutely haram — the shareholder becomes a partner in a haram business: ﴿وَلَا تَعَاوَنُوا عَلَى الْإِثْمِ وَالْعُدْوَانِ﴾ (do not cooperate in sin and transgression) (Surah al-Ma'idah: 2).

3. Halal business + a small amount of haram income: according to contemporary scholars (Shaykh Muhammad Taqi Usmani and others) there is room, provided that: (a) the basic business is halal and predominant; (b) the haram income is not more than 5 percent of the total income (an ijtihadi limit); (c) purification: the shareholder should calculate the haram portion of the profit and give it in charity (e.g., if the haram is 3%, give 3% of the profit in charity); (d) interest-based loans are not more than 30 percent of the total market value; (e) illiquid assets are more than 30 percent of the total market value.

4. Prohibited forms: (a) day trading and speculation — close to gambling, avoid; (b) margin trading — an interest-based loan, haram; (c) futures, options, CFDs — gambling and gharar, not the buying and selling of a real asset.

Summary: if the basic business is halal + the haram income is less than 5%, it is permissible with the conditions, and purification is necessary; trading in a haram business or through an interest/gambling-based system is haram.

Translated from the original Urdu fatwa.