A type of khiyar (option) that constitutes, by nature and structure, a full-fledged Islamic finance arrangement which is used as a product, per se. It is a stand-alone product that is not made part of a broader structure (i.e., it not ancillary or supplementary to a host contract). It may also be used for hedging purposes (purely as a risk management product). A product khiyar may come in the guise of a single transaction or a series of transactions, whether at present time or in the future.

An example of product khiyar is khiyar al-faskh or an option for revocation of a contract (such as a sale contract- aqd al-ba’i), whether associated with arboun or not. It may also take the form of a permissible repurchase transaction (repo), that is structured on the basis of khiyar.

In terms of accounting effect, this khiyar (as opposed to a ancillary khiyar) gives rise to an asset or liability on the balance sheets of the parties involved.