Short answer
No, in the mainstream view. A conventional call or put option sells a bare right to buy or sell later, which Islamic law does not treat as a saleable asset, and most options are traded as bets on price moves without any delivery. AAOIFI, the International Islamic Fiqh Academy and Mufti Taqi Usmani all prohibit them.
Buying, selling or writing options is not permitted, since an option is a mere right (haqq mujarrad) that cannot be sold for a price, and the contracts involve gharar and gambling-like risk. Covered calls and spreads fall under the same ruling.
The four schools agree on this.
Explanation
A call option gives you the right to buy a share at a set price before a date; a put gives you the right to sell. You pay a premium for that right. Most traders never buy or sell the shares; they trade the option itself as its value swings.
Why scholars forbid it:
- Not an asset: the premium buys only a right to make a future sale. Hanafi jurists hold that bare rights like this cannot be sold for money.
- Gharar and gambling: buyers lose the whole premium if the price does not move their way, and the seller's gain is the buyer's loss. Leverage magnifies this.
- No real exchange: options are mostly closed out for cash differences, without any change of ownership.
The International Islamic Fiqh Academy ruled options impermissible in 1992, and AAOIFI's standard on shares agrees. Writing covered calls on shares you own, protective puts and option spreads are all included.
Employee stock options are different in form: they are a promise from your employer to sell you shares at a set price, often as part of pay. Many scholars allow exercising them to buy shares of a halal company, but not selling the options themselves. Ask a mufti about your plan.
Some Islamic finance products use 'urbun, a deposit kept by the seller if the buyer walks away, which the Hanbali school allows. See Is a non-refundable deposit halal? Also see Is futures trading halal?, Is binary options trading halal? and Is short selling haram?
The evidence
Quran, Surah Al-Maaida 5:90
يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوٓا۟ إِنَّمَا ٱلْخَمْرُ وَٱلْمَيْسِرُ وَٱلْأَنصَابُ وَٱلْأَزْلَٰمُ رِجْسٌۭ مِّنْ عَمَلِ ٱلشَّيْطَٰنِ فَٱجْتَنِبُوهُ لَعَلَّكُمْ تُفْلِحُونَ ﴿٩٠﴾
O you who have believed, indeed, intoxicants, gambling, [sacrificing on] stone alters [to other than Allah], and divining arrows are but defilement from the work of Satan, so avoid it that you may be successful.
Option trading for price swings resembles gambling.
Quran, Surah An-Nisaa 4:29
يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوا۟ لَا تَأْكُلُوٓا۟ أَمْوَٰلَكُم بَيْنَكُم بِٱلْبَٰطِلِ إِلَّآ أَن تَكُونَ تِجَٰرَةً عَن تَرَاضٍۢ مِّنكُمْ ۚ وَلَا تَقْتُلُوٓا۟ أَنفُسَكُمْ ۚ إِنَّ ٱللَّهَ كَانَ بِكُمْ رَحِيمًۭا ﴿٢٩﴾
O you who have believed, do not consume one another's wealth unjustly but only [in lawful] business by mutual consent. And do not kill yourselves [or one another]. Indeed, Allah is to you ever Merciful.
Taking a premium for a bare right is not a lawful exchange of value.
Sahih Muslim 1513
Sahih... نهى رسول الله صلى الله عليه وسلم عن بيع الحصاة وعن بيع الغرر ...
"The Messenger of Allah forbade the pebble sale and the gharar sale."
Options carry the kind of uncertainty that was forbidden.
Sunan Abi Dawud 3503
Graded sahih... لا تبع ما ليس عندك ...
"Do not sell what you do not have."
Writing options often commits you to deliver what you do not own.
Where the ruling is recorded
- Resolutions of the International Islamic Fiqh Academy, Resolution on financial markets (1992). Options contracts are impermissible.
- AAOIFI Shari'ah Standards, Standard on financial papers (shares and bonds). Prohibition of options.
- Fiqhi Maqalat (Mufti Taqi Usmani), Essay on the sale of rights (bay' al-huquq al-mujarrada). Which rights may and may not be sold.
Checked by our team. For a more accurate answer to your own situation, consult a scholar. Quran translation by Sahih International. Hadith Arabic from the standard editions of the six books and the Muwatta, with gradings as recorded there; the English is our own rendering. Spotted a mistake? Tell us.