The Shariah Dynamics of Total Return Swap

A credit derivative is a privately negotiated contract, the value of which is derived from the credit risk of a bond, a bank loan, or some other credit instrument. Market participants can use credit derivatives to separate default risk from other forms of risk, such as currency risk or interest rate risk. The value of […]

Solving the Dynamics
of Shariah in ETFs & ETNs

At their core ETFs are hybrid investment products, with many of the investment features of mutual funds married to the trading features of common stocks. Like a mutual fund, an investor buys shares in an ETF to own a proportional interest in the pooled assets. Like mutual funds, ETFs are generally managed by an investment […]

Taking a Leap with Sharia in the World of Options

A derivative product is a financial product that derives its value from another, underlying financial product. For example, an option to buy a share is a financial product which derives its value from that underlying share. Similarly, an interest rate swap derives its value from the value of the cash flows on the underlying loan. […]

Retail Forex Trading: Views from the front lines of Islamic Finance

Imam Ibn Taymiyyah (d. 728 H) states that the physical body of money is never the objective of acquiring money, rather, it is the counter-exchange which is the objective and benefit of money. Although money plays the role of a medium of exchange and a standard of measurement, profit by exchange is permitted as long […]

Measuring Shariah compliance
in Senior & Subordinated Bonds

A bond is a type of investment that represents a loan between a borrower and a lender. Think of it as similar to getting a personal loan from a bank – except in this case you are the lender (known as the investor or creditor) and the borrower is generally a government or corporation (known […]

The Shariah factor in Cryptocurrencies and Tokens

A cryptocurrency is a form of virtual currency that uses cryptography to verify that any person who attempts to spend some of the currency is the person entitled to do so. Cryptocurrencies typically use a decentralised peer-to-peer network to verify transactions and to record them on a decentralised public ledger (which is commonly known as […]

Decoding compliance of an iconic offering (ICO)

An ICO is a way for companies – usually start-ups – to obtain funding. With an ICO, the provider issues digital tokens by means of blockchain technology. ICOs have a cross-border nature: in principle, anyone with Internet access and a digital wallet can buy these tokens. ICO funds are usually received in Bitcoins (BTC) or […]