How InvestGurus.co’s Offerings Conflict with Islamic Principles

InvestGurus.co positions itself as a gateway to global markets, offering a diverse array of trading products including Forex, Indices, Crypto, Stocks, and Commodities.

Read more about investgurus.co:
InvestGurus.co Review & First Look
Unpacking InvestGurus.co: A Deep Dive into its Operations
Ethical Concerns and Legitimacy of InvestGurus.co

While seemingly comprehensive, the fundamental nature of these offerings, particularly when paired with high leverage and promotional bonuses, directly conflicts with several core tenets of Islamic finance.

Understanding these conflicts is crucial for anyone seeking to engage in ethical and permissible financial activities.

The Problem of Riba (Interest)

Riba, or usury, is strictly prohibited in Islam.

It refers to any predetermined, fixed return on a loan or debt, and any increase in value for no legitimate counterpart value.

InvestGurus.co’s operational model, especially its use of leverage, often implicates riba.

• Overnight Swaps/Rollover Fees:
  • Mechanism: When trading Forex or CFDs with leverage, if a position is held open overnight, the broker typically charges or pays a “swap” or “rollover” fee. This fee is the interest rate differential between the two currencies in a pair, adjusted for the broker’s markup.
  • Riba Implication: These swap fees are essentially interest charges on the borrowed capital (leverage) used to maintain the position. Regardless of whether the fee is paid or received, it constitutes riba as it’s a predetermined charge on borrowed money.
  • “Swap-Free” Accounts: While some brokers offer “Islamic accounts” or “swap-free accounts” to avoid these charges, these often come with other fees (e.g., higher commissions, wider spreads) or time limits, which can be seen as a way to indirectly compensate for the missed interest. Furthermore, the very act of borrowing to speculate on price movements, even without explicit overnight charges, can be questioned from a broader Islamic perspective.
• Leverage as Borrowing:
  • The Concept: Leverage means trading with borrowed money. For example, with 1:500 leverage, a trader can control a position worth $500,000 with only $1,000 of their own capital.
  • Riba Connection: The profit generated from this borrowed capital, particularly if there are implicit or explicit charges for its use, falls under the prohibition of riba. Islamic finance encourages profit-sharing partnerships (Mudarabah, Musharakah) where risk is shared, rather than fixed returns on debt.
• Bonuses Tied to Volume:
  • Hidden Riba: While not direct interest, some bonus schemes can implicitly involve elements of riba. If the bonus requires a certain trading volume, it encourages the continuous use of borrowed capital, potentially generating more swap fees for the broker or revenue from spread/commission, which can be seen as profiting from the use of debt-based instruments.

The Issue of Gharar (Excessive Uncertainty) and Maysir (Gambling)

Gharar refers to excessive ambiguity or uncertainty in a contract that could lead to unfairness, while Maysir denotes gambling or games of chance where wealth is acquired without real effort or economic contribution. Both are strictly forbidden in Islamic finance.

• Highly Speculative Markets:
  • Forex, Crypto, Indices, CFD Stocks/Commodities: These markets are inherently speculative. Traders profit from predicting short-term price movements rather than investing in the underlying productive assets or businesses.
  • High Volatility: Markets like cryptocurrencies are extremely volatile. While this offers “unexpected trading opportunities” as InvestGurus.co states, it also means extremely high risk and unpredictability.
  • Gharar Link: The outcome of these trades is highly uncertain, making them prone to excessive gharar. The lack of transparency in price formation, especially with unregulated brokers, can further exacerbate this uncertainty.
• Leverage Amplifies Gharar:
  • Increased Risk: High leverage (up to 1:500) significantly amplifies both potential gains and losses. This means a small market movement can lead to a complete loss of initial capital very rapidly.
  • Uncontrolled Risk: This level of risk is considered excessive and beyond what is permissible, as it moves the activity closer to pure chance rather than informed investment.
• Bonus Schemes and Maysir:
  • Incentivizing Risk: The significant bonuses (up to 100%) offered by InvestGurus.co, often tied to high trading volume, can incentivize irrational and excessively risky trading behavior.
  • Gambling-like Behavior: When individuals trade with the primary motivation of hitting a bonus target or making quick, large profits based on predicting short-term market fluctuations, it can resemble gambling. The focus shifts from sound investment analysis to betting on market direction.
  • Wealth Creation: Islamic finance emphasizes wealth creation through legitimate trade, hard work, partnership, and investment in tangible assets that produce real value, not through speculative gains from market fluctuations.

Lack of Tangible Asset Ownership

A cornerstone of Islamic finance is the principle of engaging in transactions involving real, identifiable, and beneficial assets.

Many of the instruments offered by InvestGurus.co, particularly Contracts for Difference (CFDs), do not involve actual ownership.

• CFDs (Contracts for Difference):
  • Nature: When trading CFDs on stocks, commodities, or indices, traders do not buy or sell the actual asset. Instead, they enter into a contract with the broker to exchange the difference in the price of an asset between the time the contract is opened and closed.
  • Ethical Conflict: This directly conflicts with the Islamic principle of Qabd (possession) and ownership. Without actual ownership, the transaction becomes purely speculative and lacks the real economic substance required.
• Forex and Cryptocurrency:
  • Spot vs. Derivatives: While spot Forex (immediate exchange of currencies) can be permissible under strict conditions (e.g., immediate exchange and no interest), most retail Forex trading involves derivatives that are highly leveraged and often include swap fees, making them problematic.
  • Crypto Ownership: Similarly, while owning actual cryptocurrencies is a separate matter, trading crypto CFDs or leveraged crypto products on platforms like InvestGurus.co typically does not involve actual ownership of the digital asset, again falling under the CFD concern.

In summary, InvestGurus.co’s business model, heavily reliant on high-leverage speculative trading and incentive-driven bonuses across various volatile markets, fundamentally clashes with the Islamic prohibitions of riba, gharar, and maysir.

It also deviates from the emphasis on tangible asset ownership and real economic activity.

For those committed to ethical financial practices, platforms structured in this manner should be avoided.