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Parallel Salam


A salam contract in which the seller (the short) or the buyer (the long) in the original (previous) salam becomes a buyer (long) or seller (short), respectively, in another contract which entails the delivery and taking delivery of the same underlying commodity (al-muslam fihi), without making the execution of the new salam contract dependent on the execution of the previous one. The paralleling practice is similar to offsetting in conventional finance transactions.

Parallel salam is also referred to as back-to-back salam or in Arabic as al-salam al-muwazi.



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