Is Quant Finance Halal?
I am an overachieving student, blessed with a deep love for mathematics, and I stand at a crossroads in my academic and professional journey, just as one stands at the beginning of Ramadan, preparing for a month of reflection and growth. I have been fortunate enough to excel in my studies, and even as a junior, I have taken many high-level graduate courses, which have only fueled my passion for mathematics further.
Throughout my life, I have been steadfast in my adherence to my faith. I have always been conscious of the choices I make, ensuring that they are in alignment with the teachings of Islam. For instance, I have refrained from engaging in activities such as playing poker amongst friends, as gambling is strictly forbidden in our religion. I have refrained from going to frat parties or drinking alcohol in any capacity. My dedication to both my faith and my academics has led me to this pivotal moment in my life, where I must choose a career path that honors my beliefs and leverages my skills.
Many of my classmates, who I consider to be strong and talented individuals, have chosen the path of quantitative finance as their professional calling. Their choices have led me to contemplate whether this field is the right destination for me, akin to believers flocking to the Kaaba during Hajj, seeking closeness to Allah and spiritual fulfillment.
However, as a devout Muslim, I have strong reservations about venturing into this career. My concern lies in the compliance of quantitative finance with the principles of Sharia, as I am well aware that the world of finance can sometimes resemble the high-stakes gambling of a casino, rather than the calculated risk-taking of a responsible investor. If I end up at a firm but get placed into a crypto desk, would this still be considered halal?
I humbly seek your guidance and wisdom in addressing my concerns about the compatibility of quantitative finance with my Islamic beliefs. Are there ways to navigate this field while remaining true to my faith, or should I seek a different path that better aligns with my values? I do want to work in finance and earn some money, but I'm not sure if consulting or investment banking would suit me better.
I'm a Muslim too but wtf is wrong with you. Why are you posting this crap here
The algo says Bismallah SIUUUUU
Inshallah the S&P500 goes up
wouldnt an imam be better to answer this?
No, making money is haram.
No gambling, no risk. Therefore I have come up with the following:
Trend-Following: Haram. Front-running: Halal
Arbitrage: Halal. StatArb: Haram
Market Making: Haram. Pre-hedging RENTD: Halal
I am but a lowly kafir, but there are funds and other finance businesses which fit under the category of Islamic Finance. According to the IMF, these firms aim to provide finance services while abiding by Shari'ah.
https://www.imf.org/external/themes/islamicfinance/
Don't let your dreams be memes
Genuinely curious about this, although I have no real interest in poker. Could a faithful Muslim argue that poker is not actually gambling and is actually a skilled game based on mathematical odds? Or have the religious leaders already deliberated on this and the decision is made? Just curious what kind of "thought evolution" might occur within Islam (as you might see with, say, the Catholic Church or the Southern Baptists).
No, because even though it is skills based, it is a zero-sum game where the only way to win is for others to lose, and no value is created. I am not a Muslim, but I have similar religious principles, and therefore do not believe in gambling. Legitimate business is where multiple parties transact and there are opportunities for each to benefit. Zero-sum transactions violate this, and is therefore illegitimate business.
I would agree that online poker is a zero-sum game where players are genuinely seeking to make money off of others, as is Las Vegas poker tournaments. However, it seems like most people play poker with friends and co-workers as a hobby, not principally to make money. In other words, a poker game with friends isn’t a business and the utility is in the experience, even for those who “lose” financially. You may lose $100 that night, but you spent 2 hours laughing and talking with friends and away from the nagging spouse; therefore, it’s not a zero-sum experience as any money won or lost is merely the result of the game and not the point of the game.
Unrelated, but I spent a summer in Abu Dhabi, where a friend was working for one of the Emirates SWFs. I'm not a muslim (buddhist), but the amount of halal behavior I saw the emirati ruling class/princes/rich boys partake in was comical. They were laughing at using religion to bring in devout idiots who would do their bidding, without question.
More drugs than I saw in my fraternity at school, hookers on call as if they had a pizza hut delivery service for eastern european hoes. Alcohol obviously...Didn't really have a point in this post, but just found it funny.
Don't work for them in you're an Indian/Pakistani/Afghani/SE Asian muslim. They don't even consider you guys real muslims. Barely consider the iranians, and central asians muslims as it is. Granted this is far worse in the shithole known as Kuwait, than it is in the UAE, which is the only good country out of the clownshow that's the Gulf Cooperation Council.
Yeah the Iranians are a lot smarter than Arabs, doubt any Persian would care to work for an Arab sovereign wealth fund.
Iran is launching missiles into space with the worst sanctions in human history.
Arabs are .........literally incapable of fixing their own primitive equipment without American help.
Just food for thought.
If you went up to an Iranian and said "you're barely a muslim" they wouldn't care. The ones I know wear Zoroastrian jewelry or don't identify as religious.
'Quant finance is haram. RenTech, AQR, Man Group, DE Shaw, 2 Sigma, Capula, that shit is risky af and is gambling. Stick to long-only asset management and espouse the principles of risk-averse value investing with adequate margin of safety. I myself, I prefer ETFs' - Muhammad
Hahaha
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