Staff View: Commodity Forward and Futures Contract: An Innovation in Islamic Derivatives

Commodity Forward and Futures Contract: An Innovation in Islamic Derivatives

This paper attempts to analyze the innovation in Islamic forward and futures contracts of crude palm oil in Malaysia. Commodity forward and futures contracts are the most common types of derivative instruments, whose value depends on the value of the underlying assets, namely commodities. The emerg...

Full description

Saved in:

Bibliographic Details
Main Authors:	Nadhirah, Nordin, Rahimah, Embong, Normadiah, Daud
Format:	Conference or Workshop Item
Language:	English
Published:	2014
Subjects:	HG Finance TA Engineering (General). Civil engineering (General)
Online Access:	http://eprints.unisza.edu.my/238/1/FH03-FKI-16-06125.pdf http://eprints.unisza.edu.my/238/
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my-unisza-ir.238
record_format	eprints
spelling	my-unisza-ir.2382020-10-20T04:01:42Z http://eprints.unisza.edu.my/238/ Commodity Forward and Futures Contract: An Innovation in Islamic Derivatives Nadhirah, Nordin Rahimah, Embong Normadiah, Daud HG Finance TA Engineering (General). Civil engineering (General) This paper attempts to analyze the innovation in Islamic forward and futures contracts of crude palm oil in Malaysia. Commodity forward and futures contracts are the most common types of derivative instruments, whose value depends on the value of the underlying assets, namely commodities. The emergence of forward and futures contracts resulted from the advancement of financial engineering that is based on conventional finance. Therefore, this study is significant in order to identify the extent to which conventional commodity forward and futures contracts meet the principles outlined by the shari’ah in the discipline of Islamic finance. Initially, this study analyzes the shari’ah issues in commodity forward and futures crude palm oil and subsequently, it proposes a set of potential shari’ah principles in the contracts. This study uses a thematic analysis approach in analyzing the data obtained from secondary sources and interviews with several selected respondents who are involved in this industry. The result has shown that the contract raised several shari’ah issues such as gharar, speculation and gambling. Finally, this study recommends the application of the principle of wa'd and bay almurabahah/musawamah as an innovation in shari’ah compliant commodity forward and futures contracts. 2014 Conference or Workshop Item NonPeerReviewed text en http://eprints.unisza.edu.my/238/1/FH03-FKI-16-06125.pdf Nadhirah, Nordin and Rahimah, Embong and Normadiah, Daud (2014) Commodity Forward and Futures Contract: An Innovation in Islamic Derivatives. In: 21st Century Academic Forum Conference Proceeding 2015 Conference, 17-18 March 2014, Harvard University, Cambridge, MA U.S.A..
institution	Universiti Sultan Zainal Abidin
building	UNISZA Library
collection	Institutional Repository
continent	Asia
country	Malaysia
content_provider	Universiti Sultan Zainal Abidin
content_source	UNISZA Institutional Repository
url_provider	https://eprints.unisza.edu.my/
language	English
topic	HG Finance TA Engineering (General). Civil engineering (General)
spellingShingle	HG Finance TA Engineering (General). Civil engineering (General) Nadhirah, Nordin Rahimah, Embong Normadiah, Daud Commodity Forward and Futures Contract: An Innovation in Islamic Derivatives
description	This paper attempts to analyze the innovation in Islamic forward and futures contracts of crude palm oil in Malaysia. Commodity forward and futures contracts are the most common types of derivative instruments, whose value depends on the value of the underlying assets, namely commodities. The emergence of forward and futures contracts resulted from the advancement of financial engineering that is based on conventional finance. Therefore, this study is significant in order to identify the extent to which conventional commodity forward and futures contracts meet the principles outlined by the shari’ah in the discipline of Islamic finance. Initially, this study analyzes the shari’ah issues in commodity forward and futures crude palm oil and subsequently, it proposes a set of potential shari’ah principles in the contracts. This study uses a thematic analysis approach in analyzing the data obtained from secondary sources and interviews with several selected respondents who are involved in this industry. The result has shown that the contract raised several shari’ah issues such as gharar, speculation and gambling. Finally, this study recommends the application of the principle of wa'd and bay almurabahah/musawamah as an innovation in shari’ah compliant commodity forward and futures contracts.
format	Conference or Workshop Item
author	Nadhirah, Nordin Rahimah, Embong Normadiah, Daud
author_facet	Nadhirah, Nordin Rahimah, Embong Normadiah, Daud
author_sort	Nadhirah, Nordin
title	Commodity Forward and Futures Contract: An Innovation in Islamic Derivatives
title_short	Commodity Forward and Futures Contract: An Innovation in Islamic Derivatives
title_full	Commodity Forward and Futures Contract: An Innovation in Islamic Derivatives
title_fullStr	Commodity Forward and Futures Contract: An Innovation in Islamic Derivatives
title_full_unstemmed	Commodity Forward and Futures Contract: An Innovation in Islamic Derivatives
title_sort	commodity forward and futures contract: an innovation in islamic derivatives
publishDate	2014
url	http://eprints.unisza.edu.my/238/1/FH03-FKI-16-06125.pdf http://eprints.unisza.edu.my/238/
_version_	1681493206531833856
score	13.211869

Commodity Forward and Futures Contract: An Innovation in Islamic Derivatives

Similar Items