Instruments

Islamic Derivatives

A forward contract is an agreement between two counter parties to buy or sell at a specified future time an asset for a certain price (the delivery price). The party that agrees to buy the underlying asset assumes a long position on the contract; the other party assumes a short position and consents to sell the asset on the same future date for the same delivery price. For further details see: GLOBAL DERIVATIVES: Products, Theory and Practice.

Forward Foreign Currency Transaction

A futures contract is basically a forward contract which is standardised with respect to contract size, maturity, product quality, place of delivery, etc. For further details see: ISRA, Islamic Financial System; Principles and Operations.

A swap is a contractual agreement in which two parties agree to exchange payments over a period of time, based on a notional amount of the underlying asset. For further details see: ISRA, Islamic Financial System; Principles and Operations.

An option contract entitles the holder the right, but not the obligation, to buy (or sell) the underlying asset at a predetermined exercise price at, or any time before, maturity. For further details see: ISRA, Islamic Financial System; Principles and Operations.


Forward Foreign Currency Transaction
قرار رقم: 195 (1/21) بشأن التحوط في المعاملات المالية

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