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Forward Rate

The rate at which a seller is willing to exchange an asset (a commodity, a currency, etc.) at a specified...

Backwardation

A pricing structure in securities, foreign currencies and commodities trading wherein the prices of near future deliveries exceed those of...

Backwardation Swap

A commodity swap in which two counterparties exchange cash flows based on two prices: the sport price and the future...

Forward Price

The price of the underlying asset of a forward contract. In other words, it is the price at which a...

LOP

It stands for law of one price; the idea that the price of a commodity denominated in a specific currency...

Law of One Price

The idea that the price of a commodity denominated in a specific currency should be the same regardless of the...

Forwardation

A pricing structure in securities, foreign currencies and commodities trading wherein the prices of far future deliveries exceed those of...

Reverse Tawarruq

A form of tawarruq in which the mustawriq/ mutawarriq (monetizer) is a financial institution or bank, and not an individual...

Fungibility

The interchangeability which characterizes a futures contract. More precisely, futures contracts for the same commodity and delivery month and which...

Reverse Inah

A form of inah sale (بيع العينة) in which a commodity is sold for a spot price (thaman) and then is...