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Taking Interest: Difference between revisions
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# Buying a future contract of stocks doesn't involve interest.<ref>Ribbit Btachnit Chischon Lkol Yeled p. 33 writes that there's no ribbit with future contracts since there is no sale of the stocks until the settlement date at which point the money is paid and the stocks or the equivalent are exchanged. Therefore, he argues that it isn't similar to pesika (buying commodities at a future date). Even though there is a down payment made it is merely a security deposit and not a loan. He cites this from the Mishpat Shalom CM 209.</ref> | # Buying a future contract of stocks doesn't involve interest.<ref>Ribbit Btachnit Chischon Lkol Yeled p. 33 writes that there's no ribbit with future contracts since there is no sale of the stocks until the settlement date at which point the money is paid and the stocks or the equivalent are exchanged. Therefore, he argues that it isn't similar to pesika (buying commodities at a future date). Even though there is a down payment made it is merely a security deposit and not a loan. He cites this from the Mishpat Shalom CM 209.</ref> | ||
# If a person leaves money in a Jewish investment account and it accrues interest leaving money there is forbidden since that would be Biblical interest. However, this transaction can be permitted with a heter iska.<ref>Laws of Interest 1:24, Mishnat Ribbit p. 62</ref> Some poskim would permit collecting interest if the brokerage firm is incorporated.<ref>Laws of Interest 1:24 based on Rav Moshe (Igrot Moshe 2:63)</ref> | # If a person leaves money in a Jewish investment account and it accrues interest leaving money there is forbidden since that would be Biblical interest. However, this transaction can be permitted with a heter iska.<ref>Laws of Interest 1:24, Mishnat Ribbit p. 62</ref> Some poskim would permit collecting interest if the brokerage firm is incorporated.<ref>Laws of Interest 1:24 based on Rav Moshe (Igrot Moshe 2:63)</ref> | ||
# Buying and selling options is permitted.<ref>Torat Ribbit 17:36 permits buying and selling options since they can go up or down. If you buy from the open market certainly it is a sale and even if you do it with your broker it is still like a sale and not like an advanced cash payment to get a cheaper deal later. Takanat Haribit p. 47 also permits and thinks it isn't asmachta since it is legally binding. Seder Haribit v. 1 p. 289 writes that buying options is permitted since it is a sale. It isn't like pesika al peirot since you don't necessarily get the fruit you're just buying the right to get them. This is explained by [https://www.yutorah.org/lectures/lecture.cfm/946426/rabbi-ike-sultan/ribbit-investing-in-bonds,-stocks,-short-selling,-naked-shorts,-buying-on-margin,-buying-futures,-options,-money-market-funds-as-they-relate-to-interest/ Rabbi Sultan (Investing in Bonds, Stocks, Short Selling, Buying Futures, Options)].</ref> | # Buying and selling options is permitted.<ref>Torat Ribbit 17:36 permits buying and selling options since they can go up or down. If you buy from the open market certainly it is a sale and even if you do it with your broker it is still like a sale and not like an advanced cash payment to get a cheaper deal later. Takanat Haribit p. 47 also permits and thinks it isn't asmachta since it is legally binding. Seder Haribit v. 1 p. 289 writes that buying options is permitted since it is a sale. It isn't like pesika al peirot since you don't necessarily get the fruit you're just buying the right to get them. This is explained by [https://www.yutorah.org/lectures/lecture.cfm/946426/rabbi-ike-sultan/ribbit-investing-in-bonds,-stocks,-short-selling,-naked-shorts,-buying-on-margin,-buying-futures,-options,-money-market-funds-as-they-relate-to-interest/ Rabbi Sultan (Investing in Bonds, Stocks, Short Selling, Buying Futures, Options)]. See Yeshurun v. 33 p. 625-6 who discusses whether options is an issue of ribbit and considers that perhaps it isn't considered a loan at all but a sale. See there at length.</ref> | ||
===Lending Commodities as Part of a Work Contract=== | ===Lending Commodities as Part of a Work Contract=== | ||
