DefinePK

Abstract

Financial market introduces various types of risk management tools in which financial derivatives are mostly used in this regard for the same purpose but also it became a dominant business itself. It has four major types i.e financial options, swaps, forwards and future contracts.
Swap is a financial contract between two parties who agree to exchange one cash flow stream for another as per predefined rules. Interest rate swap means a swap having the cash flow of fixed interest rate and floating interest rate. A commodity swap is that where two counterparties agree to exchange cash flows dependent on the price of an underlying commodity.
In this paper the researcher descriptively explained the meanings, qualities, strategies and role of Interest rate swap and commodity swap from contemporary sources and then determined the Sharia ruling of both kinds of swap from the basic sources of Islam.