Islamic Finance

Subject Matter of Murabaha

October 5, 2021
Derivatives

Swap Differential Agreement

October 5, 2021

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A commodity option that gives the holder the right either to buy (call) or sell (put) the underlying asset, but not both. If either option is exercised, the option to trade the opposite side automatically expires. For example, if a double option is exercised as a call, the right to exercise as a put is terminated right away.

The double option is sometimes alternatively called an option-to-double.

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