I was reading an interesting thought piece from Allen Farrington yesterday (go read, its good!) and one of the things he talks of in it is how bitcoin is halal, ie conforms to the requirements of Islamic finance, and it got me wondering if whether derivatives were permissible in Islam.
A bit of googling later and it turns out there are a set of standards for sharia compliant derivatives called the Tahwwut Master Agreement, but there are few offerings, and the opacity of many traditional derivatives contracts make it difficult to find out whether any given derivative complies with the requirements…and most do not, making it difficult for Islamic banks to hedge their risks as well as companies and consumers who wish to stay sharia compliant to manage their risk appropriately.