Explain the following

1. Short sell: The act of short selling securities that you already own. This results in a neutral
position where your gains in a stock are equal to the losses. For example, if you own 100 shares of ABC and you tell your broker to sell short 100 shares of ABC, you have shorted against the box. An alternative to short selling against the box is to buy a put on your stock. This may or may not be less expensive than doing the short sale.

2. p/e ratio: A valuation ratio of a company's current share price compared to its per-share
earnings. EPS is usually from the last four quarters (trailing P/E), but sometimes it can be taken from the estimates of earnings expected in the next four quarters (projected or forward P/E). A third variation uses the sum of the last two actual quarters and the estimates of the next two quarters. Calculated as:

Market Value per Share Earnings per Share (EPS)

3. qimar: gambling. Technically, an agreement in which possession of a property is contingent upon the occurrence of an uncertain event. By implication it applies to those agreements in which there is a definite loss for one party and definite gain for the other without specifying which party will gain and which party will lose.

4. future contract: A contractual agreement, generally made on the trading floor of a futures
exchange, to buy or sell a particular commodity or financial instrument at a predetermined price in the future. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash. 5. salam: Salam is a type of Sale in which the seller undertakes to supply some specific goods to the buyer at a future date, against an agreed price which is fully paid in advance and the delivery of the sold commodity is deferred. 6. Istisna: Istisnaa is an order from purchaser (buyer) to a manufacturer (seller) to produce a specific good for him (buyer) against mutually agreed price and period for manufacturing and delivery.

Q: if insurance and takaful not used then wat should be used? Ans: The best option is still Bait-ul-Maal, but it does not exist because there isn t any Islamic government!

Remove commercialism from Takaful Create a Waqf fund, from zakat & sadaqat for the unfortunate Salaries of the Takaful Waqf Fund should be minimized; so should the expenses If an excess fund exists, it may be invested in a low risk halal opportunity Beneficiaries of the waqf fund are all those who have a genuine need; The genuine need of the unfortunate can be launched in a short fund raising campaign

ALL ulema in agreement simple & no shari ah restrictions.

Q: Application of istisna? Ans: Essential requirements for Istisnaa': Goods / commodities should require manufacturing; Manufacturing means:     Any type of work that change the material significantly; Like work of carpenter; Value addition in which material changes its values; Like powdering of liquid milk;

Manufacturer (seller) must use his own material;  If the material is provided by the buyer then this will be case of Services Ijarah and not of Istisnaa';  The commodity must be known and specified in terms of kind, type, quality and quantity;  Ambiguity in these elements lead to Gharar; Nature of price in Istisnaa':  As other kind of sales, price of goods sold under Istisnaa' could be anything i. e. money, commodity and usufruct (Manafi'); Price of the goods in Istisnaa':  Price in Istisnaa' should be preferably fixed;  Price in Istisnaa' may be tied up with the time of delivery;  For example the buyer may fix 'X' price for delivery in 10 days and 'Y' price (reduced price) if the manufacturer delays delivery from the agreed time schedule;  The reason for this flexibility is resemblance of Istisnaa' with Ijarah; Payment of Price of Istisnaa':  The price can be paid immediately (spot); or  Can be paid at delivery (deferred); or  Could be paid in installments. The installments may be tied up with different stages of manufacturing/projects;

Q: Why Stock exchange is haram? The stock market is haram because of the following elements: Short selling Haram Futures trading Gambling Futures short selling Haram Avoid day trading keep min 4 days Margin trading involves interest Haram Speculation trading is the same as gambling Gharar (uncertainty) Maisir (gambling), betting, speculation Riba (interest) Qimar(one parties loss is another s gain) Kazab (lying, and misleading).

Q: Why conventional insurance is haram? Ans: The Council of Islamic Fiqh Scholars (1975) ruled that traditional insurance is haram due to the presence of three main elements.  Gharar (uncertainty)  Maisir (gambling)  Riba (interest or usury) The participant loses the money paid for the premium when the insured event does not occur (Gharar).  The company will be in deficit if the claims are higher than the amount contributed by the participants Gharar. But this does not happen because of statistics .  The element of Riba (Interest) exists in lending or borrowing funds/investments at fixed interest, and other related practices in the investment activities of conventional Insurance companies.

Q: Takaful practices? Insurance Coverage/Protection Benefits Mobilisation of Savings Islamically approved (Halal) Investment Opportunity ? Participate in the economy in a collective way (Jama ah) Opportunity to perform good deeds and to do charitable works.

Q: Parallel salam questionable practices in bank?

 Parallel Salam is allowed with a third party only;  The seller in the first contract cannot be made purchaser in the parallel contract of Salam;  It will be a buy-back arrangement, which is not permissible;  If the purchaser in the second contract is a separate legal entity, then it is necessary that it should not be a subsidary or sister concern of the seller company in the first contract;  The arrangement will not be allowed because in practical sense it will be a 'buy-back' arrangement Q: Islamic banking is haram or halal? Ans: 2 groups of Ulema HALAL Actively involved in Islamic Finance. Personal benefit Beat the West. It is in the strategic interest of Islam. Evolving a model to apply when we have Khilifah . Islamic perspective has become alive. HARAM Silent. No incentive either way. Other ways to beat the WEST. Cannot exist without SHARIAH. Islamic perspective has become alive. With passage of time it had to happen spoiling image.

Q: Questionable practices of Islamic banking? Islamic banks faces interest based organization externally. Based on Kibor, Libor. Intention : To be more profitable than conventional setups. Profit computation based upon interest rate. Haram LATE FEES transformed into HALAL. Daroorah products excessively marketed. Contract term conditions & implication not explained. Acts as middle party Parallel . Contractually LOSS transferred to client. Murabaha markup highly questionable as practiced. Combining 2 contracts into 1. Client not paid when agent. The danger of making principle out of contracts. Darurah excuse used to legalize Capitalist practices, into Islam. Attitude of Bank this is 100% shariah compliant!. Monopoly of Shariah advisors.