Short selling refers to the sale of a stock that one does not own or has borrowed, with the intention of repurchasing it at a lower price in the future to make a profit from the difference. While normal securities trading profits are made by purchasing stocks that rise in value, short selling aims to profit from the decline in stock prices. This type of transaction involves selling property that is not owned and the selling of borrowed financial assets, including elements like interest, and as such, is not permissible according to Islamic law. Moreover, these transactions involve high risk and uncertainty (gharar), which leads to invalid contracts. Therefore, short selling, which violates the basic principles of Islam, is not allowed.
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