Trading in Currencies: any Reservations

The erudite Muslim scholar of Bahrain, Sheikh Nizam Ya`qubi, states the following: “Trading in currencies has certain rules and regulations in the Shari`ah. The most important rule to remember when trading in two different currencies is that it has to be on spot basis, i.e., you are not allowed to trade in options and futures on currencies. In addition, you are not allowed to trade by margin (paying only 10% of the total amount while the balance is considered to be debited to your account).
If you are trading in cash and on spot basis, then this is allowed in the Shari`ah whether it is done on a day trading basis or more than a day since you are 100% owner of the currency and you can sell it any time you wish.
Having stated the above, I should add here that this is not an activity which is recommended and encouraged, as it has a very high rate of speculation and for most people, it is a sort of gambling. It must be out of interest or Riba.”