Legal structure and challenges of option contract

Financial derivative instruments, which are the innovations of finance professionals, play an important role in the booming of financial markets. These instruments which have been created to confront risks become more diverse and evolved day by day. Option contract is one of the most important of these instruments which is more flexible than other derivative instruments and, consequently, it can better cover the risks due to price fluctuations. However, as option contract is a newborn one, a group of lawyers and jurists, especially sunni's jurists, have considered such contracts as very problematic, and hesitated about their validity from different aspects. But the exact understanding of the nature of these contracts removes some doubts about their validity and correctness and confirms their legal and canonical justification. In this paper, we have tried to introduce the option contract completely, mean while to elucidate the ambiguities surrounding this contract and to express the fundamentals of its validity.