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Waad Agreement

The admissibility of treaty options under Sharia law is the subject of disagreement. The majority of Muslim lawyers found the conventional options unacceptable. The Islamic Figh Academy of the Organization of Islamic Cooperation (IFA-OIC), which is an ISB, said: “Since the object of [option] contracts is neither a sum of money, nor a benefit, nor a financial right that can be waived, the treaty is not allowed in Sharia law.” [1] The majority`s opinion is based on three different reasons: 1) The nature and use of the options are such that they are equivalent to Maysir (game); 2) Options are used for excessive speculation; and (3) the premium paid is inadmissible. There is also disagreement among lawyers as to whether the right transferred to an option can be sold. The question is whether the premium paid in options is eligible. While the treaty provides for an independent financial right in exchange for the Al-Khiyarat Option (integrated option), the majority considers these options inadmissible. BNM`s website has recently been migrated to a new platform. Therefore, URLs that you are used to or that you have found in Google or search engines are no longer valid. On the other hand, there is an influential minority that considers options to be permissible. The SAs integrated into the IFIs have collectively adopted minority views and developed Shariah-compliant options that constitute an alternative to traditional options. For an example of a put option, imagine that B fears that the value of his stock will fall. It can either sell its shares or buy selling options.

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