International Journal of Islamic Financial Services
This paper examines contemporary derivative instruments and the Islamic viewpoint of the new instruments. The validity and permissibility of these instruments appears to vary by scholar. This paper analyzes forwards, futures and options, examines the evolution of these instruments, their unique benefits and makes a case for why they are needed. Islamic Finance Instruments with derivative like features such as the Bai Salam and Istijrar contracts are also examined. Some of the key concerns that Islamic scholars have regarding derivatives are addressed in this paper.