Islamic Commercial Law An Analysis of Futures

Abstract

Introductory Remarks
The Islamic law of transactions (mu'amalat) has often been singled out
as the most important area of contemporary research in Islamic theses, so
much so that, according to some observers, its priority is even higher than
that of research in applied sciences and medicine. This status is due to the
critical importance of commercial transactions in the wealth generation and
productivity prospects of contemporary Muslim countries. New research
on issues of conventional fiqh al mu'amalat is essential for the viability and
success of economic development programs in Muslim countries. In recent
decades, research interest in fiqh al mu'amalat has been shifting increasingly
to specific themes and development of new operative formulas to
stimulate profitable business in the marketplace. Evidently, futures trading
is one such theme where original ijtihad is required to enhance the
prospects of economic success, especially in farming and agro-based industries
in developing Muslim countries.
The futures market is where contracts for future sale and purchase can
be concluded for standardized quantities and qualities of commodities, currencies,
bonds, and stocks. Ever since the large-scale inception of futures
markets in the early 1970s, new products and trading formulas in various
trade sectors involving commodities, options, financial futures, and stock
index futures, among others, have increased so much that futures contracts
currently are available in over eighty commodities, ranging from food
grains, oil and oil seeds, sugar, coffee, livestock, eggs, orange juice, cotton,
rubber, precious metals, and currencies. In terms of volume, futures trading
has far exceeded trading levels in conventional stocks and, currently, is the
single most voluminous mode of commerce on the global scale ...