Question:
I work for a company that gives its employees stock options as part of their annual bonus. Some of these stock options are now vested (i.e. exercisable) but I have not sold them, since I am waiting for the price to go up, Allah willing. I would like to know if I have to pay Zak�h on these stock options, knowing that I do not at present own the stocks. These are stock options that I can buy at a low (fixed) price and optionally sell on the same day for the price of the day (typically higher), when I decide to exercise the options.

Answer:
The company gave you the right to buy these stocks at a fixed price whenever you wish to so that you can capitalize on changes in the market value. These options are construed in some markets to be something of value in their own right that can be bought and sold. If the stock options given to you by the company are a saleable and you intend to make business by exploiting this right that you have in them, then you have to pay Zak�h on the stock options the same as you would for any other tradable commodity. The Zak�h amount will be due on the market value of the stock options when these options remain in your possession for one year from the time the company grants them to you.

In case you do not wish to use these stock options at all, or if stock options are not something that can be bought or sold in your country, then you do not have to pay Zak�h on them.

Allah knows best.

Responded by:
Sheikh Ahmad al-Khal�l, professor At al-Im�m University, Qas�m Branch