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Participating Contingent Premium Options

Author

Listed:
  • Aboulaich Rajae

    (Islamic Financial Engineering Laboratory, Laboratory of Study and Research in Applied Mathematics, Mohammadia School of Engineering, Mohammed V University in Rabat Morocco, Avenue Ibn Sina, Rabat 10000, Morocco)

  • Dchieche Amina

    (Islamic Financial Engineering Laboratory, Laboratory of Study and Research in Applied Mathematics, Mohammadia School of Engineering, Mohammed V University in Rabat Morocco, Avenue Ibn Sina, Rabat 10000, Morocco2BEAR LAB (Business, Economics and Actuarial Science), Rabat Business School, International University of Rabat, Technopolis Shore Rocade 11100 Sala Al Jadida, Rabat, Morocco)

Abstract

The first motivation of the creation of derivatives is hedging risk but unfortunately this motivation has changed over the decades since more conventional contracts are used for speculation. The purpose of this study is to use derivatives solely for hedging while respecting principles of profit and risk sharing. According to previous work about the pricing of Waad Bil Mourabaha and using the conventional expression of the contingent premium option, we will propose a model of Participating CPO.

Suggested Citation

  • Aboulaich Rajae & Dchieche Amina, 2017. "Participating Contingent Premium Options," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1-14, March.
    • Handle: RePEc:wsi:rpbfmp:v:20:y:2017:i:01:n:s0219091517500035
    DOI: 10.1142/S0219091517500035
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    References listed on IDEAS

    as
    1. Obaidullah, Mohammed, 1998. "Financial Engineering With Islamic Options," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 6, pages 74-103.
    2. Khan, Tariqullah, 2000. "Islamic Quasi Equity (Debt) Instruments And The Challenges Of Balance Sheet Hedging: An Exploratory Analysis," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 7, pages 1-31.
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