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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...

Prepaid Forward Contract

A forward contract that calls for payment today and delivery of the underlying asset or commodity at a future date....

Prepaid Swap

A swap agreement where payment is made upfront for specific quantities of an asset or commodity that would be delivered at multiple specified times...

Commoditization

In general, the transformation of goods, ideas, or services, that are not normally viewed or considered goods, into a commodity....