A Shariah Perspective Review on Single Stock Futures

Abstract

Single Stock Futures (SSFs) are referring to the contracts between seller and buyer and these two investors need to perform their responsibilities towards the promised contract in the predetermined future, which is on the maturity date with the agreed price and quantity. This is one of the derivative contracts that is produced from the massive development of the conventional financial engineering that is purposely used for protecting the value in the financial market. However, the Muslim scholars put different overviews in determining the Islamic ruling on this above-mentioned contract. Part of them are accepting this form of contract due to its ability in protecting and securing the value and some of them refuting it. The reasons of accepting and rejecting are outwardly different as well. This situation arises the questions pertaining the status of this contract before the Islamic legislative ruling. Hence this research will be analysing the SSFs in according to the perspective of shariah (Islamic law). This qualitative research opted the exploratory design and obtained the data through the document analysis. The result shows that this contract is bringing few of shariah’s issues such as gharar, speculation and gambling that implicate the laws of applying this SSFs in the Islamic financial institution.