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Chapter Summary

This section presents a summary of the study on issue of futures trading and derivatives from Islamic perspective. The importance of derivative instruments as tools of risk management is taken for granted in the modern financial system. Many Muslim scholars have stressed the need for a prudent utilisation of such instruments in Islamic equity markets, banking and finance. However, these instruments may not be totally in compliance with Islamic principles of muʾāmalāt. The study begins with a critical review of the previous works and proceeds to analyse the forward, futures and option contracts from an Islamic point of view. The study also highlights their economic benefits, their reason d'être, the legal aspect of these contracts which may or may not be acceptable from sharīʿah perspective and then attempt is made to propose Islamic alternatives whenever they are deemed necessary and appropriate.

Keywords: derivatives; futures trading; Islamic law



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