Participating Contingent Premium Options

Aboulaich Rajae and Dchieche Amina
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Aboulaich Rajae: Islamic Financial Engineering Laboratory, Laboratory of Study and Research in Applied Mathematics, Mohammadia School of Engineering, Mohammed V University in Rabat Morocco, Avenue Ibn Sina, Rabat 10000, Morocco
Dchieche Amina: Islamic Financial Engineering Laboratory, Laboratory of Study and Research in Applied Mathematics, Mohammadia School of Engineering, Mohammed V University in Rabat Morocco, Avenue Ibn Sina, Rabat 10000, Morocco2BEAR LAB (Business, Economics and Actuarial Science), Rabat Business School, International University of Rabat, Technopolis Shore Rocade 11100 Sala Al Jadida, Rabat, Morocco

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2017, vol. 20, issue 01, 1-14

Abstract: The first motivation of the creation of derivatives is hedging risk but unfortunately this motivation has changed over the decades since more conventional contracts are used for speculation. The purpose of this study is to use derivatives solely for hedging while respecting principles of profit and risk sharing. According to previous work about the pricing of Waad Bil Mourabaha and using the conventional expression of the contingent premium option, we will propose a model of Participating CPO.

Keywords: Participating finance; Islamic finance; derivatives; call option; CPO; hedging; risk sharing (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1142/S0219091517500035

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