analyzing hidden orders in stock markets according to the prohibition of Gharar in Islamic jurisprudence
Document Type : Research Paper
Authors
1 MA student in management faculty of Imam Sadiq university
2 member of Islamic finance faculty of ISU
3 full professor of economics faculty at ISU
Abstract
In recent years, the proliferation of hidden liquidity in financial markets has increased dramatically and shifted to the center of regulatory debates and market micro-structure panels. Yet investors, scientists and policy makers are at odds about its implications and the adequate regulatory responses. Hidden order as one of the most used services which acts an important role in leading the prices and depth of transactions in stock markets. Recent researches related to hidden orders are often about Approaching an optimal model, Critical analysis & qualitative researches & Strategies for best execution. But there isn’t still a particular research to study negative points of hidden order separately vs it’s advantages & there is also no typical research that study Islamic principles related to hidden orders. The main question in this research is about Legitimacy of having hidden orders in Islamic stuck markets: can we use hidden orders in Islamic stuck markets based on the rule of prohibition of Gharar in Islamic jurisprudence? The research strategy is general qualitative which has five stage through the reasoning process. Next to describing different aspects of hidden orders, it will be tried to analyze verification of hidden order as a prohibited financial service based on Gharar. So both of analytical and descriptive way as two aspect of research purpose would be applied. During the research, the main approach is based on governmental jurisprudence and policy making. At the end, some contrasts with first-stage juridical principles are evident.
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