Sat, Dec 5, 2020
A A A
Welcome bhaimia
RSS

Islamic Finance Briefing - Categorized | Islamic Hedge Funds more

Use of derivatives as hedging instruments in Islamic finance

Posted on 15 January 2013

Given the increasing importance of Islamic banking and finance in Pakistan, it is important to deepen the Islamic financial market in the country. One way of doing so is by developing a market for Islamic hedging instruments, which are known as derivative contracts in conventional finance. It is, however, important to understand the difference between Islamic derivatives and their conventional counterparts.
Financial engineering in Islamic banking and finance has resulted in a number of Islamic options, forward and futures contracts that may be used for risk management and hedging. It must, however, be emphasised that trading in options (rights to buy and sell), forwards and futures contracts is not permissible under Shariah. The use of such contracts is permissible solely for hedging purposes, and not for pure speculative reasons………………………………………..Full Article: Source

 
Article link

This post was written by:

Laxman - who has written 19160 posts on Opalesque Islamic Finance Briefing.


Contact the author

Comments are closed.

banner
banner
banner
December 2020
M T W T F S S
« May    
 123456
78910111213
14151617181920
21222324252627
28293031