Answer
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
FundedNext’s simulated trading challenge may be halal if the fee genuinely pays for a real skills-evaluation service (ijarah) and the performance reward is a conditional ju‘alah payment funded independently by the company. It may become haram if the fee functions as a wager (qimar), winners are effectively paid from losers’ fees, or prohibited transactions such as riba occur in the subsequent funded stage.
Responding to your question, Sheikh Ahmad Kutty, a senior lecturer and an Islamic scholar at the Islamic Institute of Toronto, Ontario, Canada, states:
What Is FundedNext’s Simulated Trading Challenge?
Based on the information provided, FundedNext’s challenge appears to be a simulated trading evaluation, not actual trading or investment.
You pay a fee to take part in the challenge. You are then given access to a simulated trading platform where your performance is tested according to certain rules and targets. During this stage, no real money is invested for you, no actual shares or financial instruments are bought or sold, and the profits shown on the account are only simulated profits.
From an Islamic legal perspective, the arrangement can therefore be viewed as involving two things:
- Ijarah — payment for a service: You pay a fee for access to the platform and for the company to evaluate your trading skills.
- Ju`alah — a promised reward: The company promises to give you a reward if you successfully meet the stated performance requirements.
Is FundedNext’s Simulated Trading Challenge Permissible?
In principle, such an arrangement may be permissible, provided certain important conditions are met.
There is nothing inherently wrong with paying a fee for a genuine evaluation or assessment. People regularly pay fees for examinations, professional tests, certification programs, competitions involving genuine services, and training courses. They pay for the service even though they are not guaranteed to pass.
Therefore, the fact that the FundedNext fee is non-refundable does not by itself make it prohibited.
The important question is: What are you actually paying for?
If you are genuinely paying for a useful evaluation service that you receive whether you pass or fail, this can be considered a legitimate service contract (ijarah).
However, if the real arrangement is simply:
“Pay this amount of money. If you fail, you lose it. If you succeed, you may receive a much larger amount,” then the arrangement begins to resemble gambling (qimar).
Calling the payment an “evaluation fee” does not change the ruling if, in reality, it functions mainly as a stake for the possibility of winning a larger amount.
Where Does the FundedNext Reward Come From?
This is one of the most important questions. If FundedNext pays successful participants from the company’s own funds or legitimate business income, while the evaluation fee genuinely pays for a service, the arrangement is much easier to justify Islamically.
But if the business model is essentially that many participants lose their fees and those forfeited fees are then used to pay the smaller number of successful participants, the arrangement becomes much closer to qimār or gambling.
In simple terms, participants should not effectively be betting against one another, with the losers financing the winners.
Does Simulated Trading Avoid Riba, Gharar, and Qimar?
If the challenge is entirely simulated, many of the usual problems associated with live leveraged CFD trading may not arise during the evaluation stage.
There is no real loan, no actual investment of your money, no real purchase or sale of financial instruments, and apparently no actual interest payment or overnight financing charge.
However, this does not automatically make every later stage permissible.
If, after passing the challenge, the participant enters a genuine funded account involving leveraged CFDs, interest-based financing, swaps, or other prohibited transactions, that stage would have to be examined separately.
There could also be a Riba issue if the participant pays the challenge fee through an interest-bearing credit arrangement and incurs interest.
Does Uncertainty in FundedNext’s Challenge Constitute Gharar?
Some uncertainty is acceptable in a ju`alah contract. For example, a company may say:
“If you successfully complete these clearly stated requirements, we will pay you this reward.”
You may succeed or fail. That uncertainty by itself does not necessarily make the arrangement prohibited.
The greater concern arises if you successfully meet all the stated conditions but the company still has complete discretion to refuse payment.
The rules should therefore be clear. If you satisfy all the stated requirements, the promised reward should become due, subject to reasonable verification that you followed the rules.
What Conditions Make FundedNext Permissible?
For the arrangement to be considered permissible, the following conditions should be met:
- The fee must genuinely pay for a real and useful evaluation service.
- The challenge should not simply be a disguised wager.
- The reward should come from the company’s own funds or legitimate income rather than essentially from the losses of unsuccessful participants.
- The amount of the reward, or the method used to calculate it, should be clearly stated.
- The conditions for passing the challenge should be clear.
Once the participant fulfills those conditions, the company should be obligated to honour the promised reward.
The company should not have an arbitrary right to refuse payment after all requirements have been met.
Any later funded stage must also be free from Riba, prohibited leveraged transactions, and other unlawful financial practices.
Is FundedNext’s Simulated Trading Challenge Halal or Haram?
Based on the description provided, FundedNext’s simulated challenge may be permissible if it is genuinely a paid skills-assessment service with a separately funded performance reward.
The clearest fiqh description would be: A paid simulated skills-assessment service (ijarah) combined with a conditional performance reward (ju`alah).
It would be permissible if the participant is genuinely paying for the evaluation service and the company independently provides the promised reward when the stated conditions are fulfilled.
However, it should be avoided if the fee is, in reality, a wager—where participants risk their money for the chance of receiving a much larger amount and the winners are essentially being paid from the losses of those who fail.
Therefore, before giving an unqualified ruling on FundedNext itself, one should verify how the company funds its rewards, what exactly the evaluation fee pays for, whether successful participants have an enforceable right to payment, and what happens in the subsequent “funded” stage.
- Is Prop Firm Trading Halal If Firms Copy Your Trades?
- Is Prop Firm Forex Trading Halal?
- Is Profit Participation Model (PPU) Halal in Business?
- Is Prop Firm Trade Replication Permissible?
Almighty Allah knows best.