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Participating Contingent Premium Options

Islamic Financial Engineering Laboratory, Laboratory of Study and Research in Applied Mathematics, Mohammadia School of Engineering, Mohammed V University in Rabat Morocco, Avenue Ibn Sina, Rabat 10000, Morocco

E-mail Address: aboulaich@emi.ac.ma

Corresponding author.

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and

Dchieche Amina

BEAR LAB (Business, Economics and Actuarial Science), Rabat Business School, International University of Rabat, Technopolis Shore Rocade 11100 Sala Al Jadida, Rabat, Morocco

E-mail Address: amina.dchieche@gmail.com

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https://doi.org/10.1142/S0219091517500035Cited by:0 (Source: Crossref)

Abstract

The first motivation of the creation of derivatives is hedging risk but unfortunately this motivation has changed over the decades since more conventional contracts are used for speculation. The purpose of this study is to use derivatives solely for hedging while respecting principles of profit and risk sharing. According to previous work about the pricing of Waad Bil Mourabaha and using the conventional expression of the contingent premium option, we will propose a model of Participating CPO.

Keywords:

JEL: G12, C5, C6, C87

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