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Financial Options in Islamic Contracts: Potential Tools for Risk Management الخيارات المالية في العقود الإسلامية: الأدوات الممكنة استعمالها في إدارة المخاطر

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  • Mohammed Obaidullah

    (Assistant Professor of Finance Xavier Institute of Management, Bhubaneswar, India)

Abstract

The paper attempts to undertake an Islamic assessment of financial contracting in the global currency markets. Some basic currency-related contracts in mainstream finance, such as, spot transactions, options, forwards, futures, swaps are examined in the light of Islamic norms of financial ethics, such as, freedom from riba, gharar, jahl, qimar and maisir. The study also highlights the views of Islamic scholars on various conventional as well as Shariah-based contractual mechanisms. In cases where there is some degree of divergence of views, the study examines the nature and source of disagreement as also the implications and economic significance of the arguments. In view of the overwhelming importance of currency risk management in volatile markets, the study undertakes an assessment of the various financial contracts as risk management tools. --

Suggested Citation

  • Mohammed Obaidullah, 1999. "Financial Options in Islamic Contracts: Potential Tools for Risk Management الخيارات المالية في العقود الإسلامية: الأدوات الممكنة استعمالها في إدارة المخاطر," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 11(1), pages 3-26, January.
    • Handle: RePEc:abd:kauiea:v:11:y:1999:i:1:no:1:p:3-26
    DOI: 10.4197/islec.11-1.1
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    References listed on IDEAS

    as
    1. Khan, Fahim, 1995. "Islamic Futures and their Markets with Special Reference to their Role in Developing Rural Finance (Research Paper)," Occasional Papers 33, The Islamic Research and Teaching Institute (IRTI).
    2. Muhammad Akram Khan, 1988. "Commodity Exchange And Stock Exchange In An Islamic Economy," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 1(2), pages 31-56, July.
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    Cited by:

    1. Injadat, Ehab M. M., 2014. "Futures and Forwards Contracts from Perspective of Islamic Law," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1(2), pages 241-252.
    2. Ehab M. M. INJADAT, 2014. "Futures and Forwards Contracts from Perspective of Islamic Law," Journal of Economics and Political Economy, KSP Journals, vol. 1(2), pages 241-252, December.
    3. Fatima Zahra Bendriouch & Harit Satt & Mohamed M hamdi, 2020. "Do Islamic Banks Contribute to Economic Growth? Evidence from the GCC Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 10(5), pages 352-360.

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