We would like to cite the response of Dr.Monzer Kahf, a prominent economist, on this who said that
‘For all kinds of investment and finance practices, if you do not own an asset that may create value you are not entitled to any earning. This is the basis of the prohibition of betting and gambling and also the basis of prohibition of Riba because a debt does not create increment/value. Further recently I came across a contract called TFC that is trade difference contract whereby the traders agree on a price and if the market price of a commodity goes up or down one of them looses and the other gains and they pay these differences. This is of course haram because you did not own that commodity whose price changes.’
