Does Jewish Law Fit With Modern Financial Markets? A Spiritual Risk Audit
- May 3
- 15 min read
Updated: May 10
Updated May 10, 2026
I've been contemplating this issue in my head more recently after an interview by a Yiddish magazine Dee Voch. I've also been talking about this with customers and prospects. I'm in the business of stocks and markets. I'm giving my take on stock and stock market direction almost every day. At the same time, I am a religious Jew for many years and loving the spiritual journey.
And there's a but that I’ve been stuck on lately. But does Torah Law align with the stock market? Does Torah Law flow with stock ownership, paid interest (ribit in Hebrew), and other factors?
I want to be clear: I don't consider this a complete thought. I am very much still on this journey and learning as I go. If I feel the need I may follow up after this article. But while I am in the process of figuring this out, I felt the need to share my findings and where I stand right now.
I also want to be clear before I start, I am not a rabbi, or even close. I am a common man on a spiritual journey trying to find the truth of what the Torah wants from me on this and all subjects. That said, I do think my thought process is valid and worthy of contemplation for any Jew, whether religious or not.
In the world and as an analyst, I try to ignore narrative and instead try to identify the physical drivers—an earnings model, its main revenue, and its profit drivers. I care about the physics, the laws of nature, to help me determine my opinion. In pure technicals, does history prove out a solid hit ratio for the future. In commodities, if the physical supply of a commodity drops, the price eventually should reflect that reality, regardless of the "hope" or "sentiment" in the news.
For a Jew or Jewish investor, the Torah is a mechanism of a strict set of spiritual laws. This isn't about personal philosophy; it’s about spiritual risk management. Just as I wouldn't ignore a massive debt load on a company’s balance sheet, I've begun to look at the "structural risk," if any, created when we cross the Torah's spiritual constants into the financial markets. Do they align and am I safe, spiritually?
I know most of the world and Jewish world has come to accept markets as allowed. Nonetheless, I don't want to lean on blanket acceptance and so have been digging in.
The Structural Reality of Ownership: A Logistics Audit
In a "Logistics Audit" of the market, one must look for bottlenecks. In Torah law, one bottleneck for a Jew is Ownership. When you buy a stock, you aren't just buying a ticker; you are becoming a legal partner.
The Sabbath Conflict: Ownership is a binary state. One either owns a piece of the work, or one doesn't. If a company operates on Shabbos, and a Jew is an owner, s/he is a partner in that labor. While many rely on a lenient opinions to navigate these complexities—which thus far has been widely accepted as a valid halachic path—from a purely mechanical "Logistics" standpoint, the physical connection to that circuit remains. Effectively a Jew holding stock does appear to have some percent ownership in work done by the company on Shabbos, as small as it may be.
The Problem of the Minority: The Torah frequently bases law on the concept of the majority (Rov). For example, a pot of food remains permissible even if a trace of something prohibited falls in, provided it is nullified by the majority. While the baseline law allows for this, the "Physics of Spirituality" suggests that even a small point of failure can compromise the entire spiritual circuit, and many Jews hold themselves to a much higher standard than even the Torah requires.
Just as many, and maybe even most religious Jews would never eat from that pot even if a minute amount of something prohibited entered into it, regardless of the Torah or rabbinic allowance—striving for a level of "cleanliness" that removes even the smallest trace of risk—I believe an investor can and should audit their spiritual portfolio with that same standard in mind. If you wouldn't eat it and put it in your stomach (so to speak), why would you invest in it? Why not use a similar criteria?
To take that idea further, many righteous people hold themselves to levels of "cleanliness" that the Torah doesn’t require from the average person, seeking to remove even the smallest trace of spiritual risk. But I'm not really talking about that. I'm talking about matching how we'd act in the kitchen with how we'd act in the stock market.
With that said, perhaps the most famous ruling by a distinguished modern Torah scholar, Rav Moshe Feinstein (Igros Moshe, Even HaEzer 1:7), suggests that a minority shareholder in a massive corporation is not a "partner" in the legal sense because they lack any control over the company's daily operations. Essentially, since the board doesn't "reckon with your opinion," your investment is viewed as a mere profit-sharing benefit arrangement rather than a partnership in Sabbath violations.
While this provides a valid and respected Jewish legal "clearance," I still think that much like the pot of food analogy, a trader, a cook, or any Jew should consider in their portfolio, like their pot of food, how much "spiritual portfolio protection" they should have.
Rav Feinstein's new finding depends that the shareholder does not have a controlling stake. If he's a fractional percent he doesn't risk being considered an owner or partner in the company's Sabbath work. But when that investor climbs to be large enough, he does pass into that threshold. That, to me, is very similar to the pot of food. Even though a minute amount of prohibited food would cause many to dump the pot out anyway, here, with their portfolio, people generally don't view their portfolio in the same way. But unlike the pot of food, being partners in breaking the Sabbath or interest (ribit) have potentially more eternal consequences which many know and I'd prefer not to detail here.
I would also point out that there are also credible modern Jewish-legal opinions that disagree with Rav Feinstein's opinion. Granted, many times, the rabbi that can find a legal leniency can sometimes be regarded greater than others. My point is for someone who strives to stay spiritually clean, generally they don't look for leniencies in a topic. So why do we look for them here in the stock market?
Rav Feinstein's allowance to own stocks was that the corporation was not another Jew and so didn't fall under the same responsibilities individuals have in the Torah. He also held that a shareholder is not an owner. For me though, being brought up through the secular education system and working in finance, I had always learned and saw that a shareholder is an owner. S/he owns a piece in that company. Rav Feinstein's opinion disagrees with that but as I mentioned, there were other opinions that disagree with Rav Feinstein and there are many that follow those counter-opinions.
Furthermore, even with a halachic allowance for minority stock ownership, there remains the high-friction issue of "Ribit" (Interest). To my knowledge, no reputable Jewish legal authority allows direct interest payments or receipts between Jews without a heter iska (a specific legal restructuring of the debt to a partnership). This complicates trading on margin, shorting, or even holding cash in interest-bearing accounts within a bank or brokerage that lacks this oversight. Of course, if you agree with the side of Rav Feinstein, you may have some protection. But again, there are other also-famous opinions that disagree.
These are every day issues that matter importantly in trading and investing.
Additionally, we must look at the balance sheet of the company itself. If a company is heavily debt-laden, actively increasing its leverage, or is a financial institution whose core product is lending, the "spiritual debt risk" grows. When an investor chooses to hold a stock specifically to profit from growth driven by interest-based mechanics (even a tech company adding debt to grow), they are effectively plugging into that Ribit (interest prohibition) engine. Even if the ownership door is open under a minority allowance, the interest door often remains a major structural bottleneck that a "clean" spiritual audit probably should address.
The Visibility of the Trade: A partnership in labor on Shabbos must not be "seen" (Maris Ayin). While some might argue that stock ownership is a private matter, in our modern world, it is a documented reality. Between auditors, tax professionals, and regulatory filings, the partnership is a matter of record. To me, this documented visibility adds a layer of spiritual friction.
Ribit: Reducing Spiritual Friction
Ribit (interest) is a spiritual law that forbids a Jew from earning interest from another Jew. The rabbis later established a "heter iska"—an allowance of business—to restructure interest into a partnership. Without this, receiving or paying interest to another Jew is a clear Torah prohibition with many meaningful ramifications spiritually which I won't discuss here.
Mechanical Conflict: Margin, shorting, bank accounts, and fixed-income securities all involve interest components. Without a written “heter iska” governing these institutional flows, I believe there is increased risk of not abiding to what the Torah requires.
Futures May Appear To Be the "Cleanest Path" But..
If we apply the rule of Physicality Over Narrative, Futures seem to emerge as a highly efficient way to participate in the market while reducing spiritual risk.
No Ownership: Futures track the price of an index (like the S&P 500) or a commodity, but they do not grant ownership in the underlying companies. You are tracking the data, not becoming a partner in the company's daily operations or, more importantly, any Shabbos violations.
Cleaner Math: Futures bypass the "Ownership Friction" and the institutional interest issues inherent in stocks. It is a common misconception that you only deal with Ribit (interest) if you trade on margin. In reality, the underlying company itself is constantly paying and receiving interest as part of its daily operations. So, even a "cash" stock position is plugged into a "Ribit-heavy" engine. A Future, however, is simply tracking price data. By removing the partnership in the company’s debt-laden balance sheet, I believe one maintains a simpler, cleaner connection to the asset.
Futures Margin: Futures margin structurally appears to be less problematic than stock margin because it functions as a performance bond (collateral) rather than a loan. When you use margin in a traditional stock account, the broker is lending you physical cash to increase your purchasing power, which creates a direct debtor-lender relationship and triggers the requirement for interest payments (Ribit). In contrast, futures margin is merely a "good faith" deposit to ensure you can cover daily price fluctuations; since no money is actually being borrowed to purchase the contract, there is no interest charged by the broker on the position itself. By removing the "loan" element from the equation, I think it helps to eliminate the primary mechanical bottleneck of interest-related friction, allowing for a cleaner portfolio spiritually.
So while a person may miss out on a specific stock story, they have, I believe a cleaner spiritual path to trade the futures on broader markets.
The But:
The Residual Bottleneck Of The Math of Time, Dust Of Interest
While Futures solve the "Ownership" and "Loan" friction, they do hit a final physical constraint that even synthetic data cannot fully escape: The Basis.
In a "Spiritual Risk Audit," we must acknowledge that the pricing mechanism between future contract dates is physically tethered to the Cost of Carry. Mathematically, the delta between the spot price and the future price is driven by the risk-free interest rate.
Even though you have removed the "Ribit-heavy engine" of a corporate balance sheet and bypassed the "Direct Loan" of a broker, the market still bakes a "taste of interest" into the contract price itself. Because time is a fundamental mechanism of interest in modern finance, the "Time Value" you pay or collect in a future is the mathematical shadow of the very thing we are trying to avoid.
Based on modern opinions, you can argue that the price to buy a house is also affected by interest rates which would make the entire stock market's use of a discount rate for valuation (DCF as an example that values stocks) a non-issue. The Torah wouldn't prevent its followers from everything; people need to live in a home. So while general rates do serve as a valuation mechanism for pretty much everything in financial markets, I think it's fair (at least for me for now) not to worry about the 'everything is priced based on interest' problem.
But for futures the pricing problem is more specific. As far as the built in cost of carry which is inherent related to interest where the out-month of a future is different than the current month, that would probably bother the famous commentator Rambam's dust-of-interest (avak ribit in Hebrew) because it depends on the price of time (also options depend on this). But since there is no physical loan or agreed fixed rate, the Rambam would likely say that helps or dilutes the prohibition. Plus, the trader is generally trading against a clearing house not an individual. For that you'd need to use Rav Feinstein's ruling above against his opposition. Also, since the pricing is done daily there's not really a 'bite' based on interest building based on time passing.
"Any interest that is not fixed from the beginning, but rather is by virtue of sale, or that [the borrower] gave of his own volition without a prior condition, this is dust of interest (avak ribit)."
-Rambam, Mishneh Torah, Laws of Lender and Borrower 4:1
There are enough points on both sides that a Jewish trader may need to become comfortable with. It appears though that complex pricing instruments such as derivatives depend on the price of time which the Rambam's dust-of-interest may not fully pass. It may be diluted by other impacts I mentioned above, but it still may not completely clean all the dust sediment (sentiment).
Using Rav Feinstein's logic, Rambam's dust-of-interest probably would go away completely but you'd need to be comfortable enough to follow Rav Feinstein's corporate-shield opinion we talked about above.
The topics are complex and my point is that a consciences spiritual Jew who also is a trader should probably acquaint himself/herself with the key topics rather than simply relying on an allowance (heter). It takes time, but I feel it's eternally important to come up with the right conclusion. As traders we constantly measure risk/reward. Isn't this risk worth measuring?
Granted also the right conclusion can be unique for the individual. There is no one-size fits all since there are many variables to the topic. Still, I think the topic is important enough, and in my journey, now that I have given it some thought, I think it requires, from me at least, more consciousness and maybe still more work.
And one last thought on this just to push the thinking. Rambam chose the term 'dust' to say it's something in the gears, not a precise legal concept that the Torah forbade, but resembles and relates to as an offshoot of interest. It's something that exists even though the Torah didn't officially forbid it. Nonetheless, like trying to keep ones' house clean from dust, the specific word is, I think in a way forcing us into this spiritual audit to keep our house clean.
The Conclusion of the Audit: Futures are undoubtedly a "cleaner" spiritual path—they successfully isolate price action from corporate debt and Shabbos violations. However, they are not "sterile." They remain a high-efficiency tool that still operates within an interest-saturated ecosystem, reminding us that in modern markets, the passage of time itself has been priced and is standard in pricing mechanisms.
Options: The "Insurance" Red Flag
At first glance, Options seem like a "clean" spiritual choice because they are optional. You aren't buying a debt-laden company; you are buying a "Right."
The "Time Value" (Theta) in an option is just a service fee—like a non-refundable deposit to hold a price. There is also time value priced into an option which can resemble 'ribit' or interest. But there are Jewish legal opinions that large expected price swings in a deal can overshadow the time aspect of its pricing. Rambam's avak ribit still may not be fully satisfied with that.
Every major Israeli insurance company—from Harel to Phoenix—utilizes a Heter Iska (a partnership contract) for their business. They are Jewish companies that deal with Jewish customers.
Insurance is similar to options in that the payout depends on a future event and is often zero. There's a high range of outcomes in insurance, just like in options. If something happens there could be a big payout that should overshadow the time value in the pricing. Nonetheless the Israeli insurance companies feel the need to have a heter iska to turn the interest within the contract into a business partnership.
Options and insurance are similar and often times stock-traders use the jargon 'buying insurance' when entering an options contract. The seller isn't just providing a service; they are harvesting a profit that is mathematically tethered to interest. If the institutional masters of risk in Israel (insurance companies) admit they need a legal "fix" for this math, its harder for the individual trader to easily claim the product is "sterile" of time-value.
While Options remove the "Ownership Friction" of stocks, they hit the same "Time Value" bottleneck as Futures. The "Theta" one pays or collects is connected to a physical proxy for interest, proven by the very existence of the Heter Iska in the insurance industry.
We see similarly in options and futures, there is a case to be made that price volatility can overshadow the fact that within the pricing resides time. Insurance companies cater to customers and offer them a heter iska to resolve this issue making the case tougher for a trader.
Crypto Or Gold
In the digital space, Bitcoin functions as a seemingly "clean" digital commodity; because it has no interest associated with the asset itself and no underlying company or employees, buying and holding Bitcoin avoids these spiritual bottlenecks entirely. However, the friction returns with assets that use Staking (network labor), shorting or Stablecoins (backed by interest-bearing debt), which re-introduces the same conflicts found in traditional stocks.
Of course, buying hard assets like gold or silver appears to resolve all of the spiritual issues above but you have to of course decide if the price is going up to invest.
Final Thoughts: Hedging Spirituality In Modern Finance
I am not a rabbi or a posek (one who decides Jewish law). I for sure am not claiming that my take is absolute. Many much smarter Torah Law authorities have claimed differently than I am claiming above but I do have those that claimed similar to what I say above.
I do think, though, that there is a pressure for the world to conform to trends based on instant access to information. But a modern trend does not annul what was handed to us years ago at Mount Sinai.
I am a common man in a constant search for truth even if it’s at the risk of my own livelihood. Most rabbis would probably offer a Jew a 'heter' (permission) because it makes life easier and there are enough respected Jewish religious authorities that have given permission. I do believe that permission from an accepted legal authority does act as a spiritual protection. But I also pointed out that while there may be a stock ownership allowance, there are many other complexities around that ownership which are just as important as the famous ruling I mentioned above.
But to me, the soul is the engine and life of the body. Even with permission, the soul may still be affected by these "mechanical" conflicts, and to me, that matters.
And for those that haven't yet embarked on that spiritual journey, I think, the same way we constantly discover new news every day in markets, an open mind allows us to best react to the tape and news. An open mind is a powerful, profitable tool.
I think the same is true in life. For a non-believer, this article, I think also matters. Because, even if you don't believe in something higher (and I understand having 'returned' myself), like in markets that we discover 'new' every day, just because it didn't fully come into our 'conviction thinking' today, tomorrow it just may. And just because someone never likes a stock, it doesn't mean it can't keep going up. Just because someone doesn't believe in something for sure is not a proof of its truth. And so I think it's worthy of at least contemplation and at the very least to the importance of one's financial assets. And know, from my experience, simply considering this can actually open the curtains.
For now at least, I do think that following reputable opinions is a realistic cover that ones actions aren't categorized as a sin. Reputable Jewish-legal opinions use incredible intellectual and spiritual power and Jewish-legal devices to arrive at such new opinions. Those opinions, for a simple person following them acts as a shield. For the simple person, I do think the idea 'ignorance is bliss' works. But for those 'bothered' I think there is an opportunity but also a responsibility (based on the Torah requiring 'fear' when talking about ribit specifically, for example) to dig deeper and I do think there is a spiritual reward for that.
We live in an age of openness and acceptance especially with instant information driven by the internet-age which causes amazing conformity in the world. So conformity to recent memory is the trend. But the Torah was given, like the laws of physics, generally absolute. While it's easier not to think deeply about potentially life-changing topics, it, of course, can matter. Even if it comes from some blog post from some guy you never heard of.
Wishing you success,
Chaim Siegel
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