Derivatives Market Overview

Derivatives are known to be among the most powerful financial instruments. The Indian equity derivatives market has seen tremendous growth since the year 2000 when equity derivatives were introduced in India. This module provides insights into different types of equity derivatives, their trading, clearing and settlement and the regulatory framework.

 

Why should one take this course?
  • To learn the basics of the derivatives market
  • To understand the use of derivative products in speculating, hedging and arbitraging
  • To learn the trading, clearing, settlement and risk management in equity derivatives
  • To learn the regulatory, accounting and taxation issues relating to equity derivatives.
Who will benefit Derivatives Market course?
  • Students
  • Stock Brokers and Sub-Brokers dealing in derivatives
  • Custodians and Employees of Mutual funds
  • Individual investors as well as High Networth Individuals (HNIs)
  • Portfolio Managers
  • Financial Institutions
  • Anybody having interest in the Stock market operations
Derivatives Market Fees
  • Module Fees GST @ 18% Total Fees
    1700 306 2006

     Total Fees : Rs.2006/- (Rupees Two Thousand and Six Only). inclusive of GST.

About Derivatives Market

The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.

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Derivatives Market Syllabus 

CHAPTER 1: Introduction to Derivatives

  • Types of Derivative Contracts,
  • History of Financial Derivatives Markets,
  • Participants in a Derivatives Market,
  • Economic Function of the Derivative Market

CHAPTER: 2 Understanding Interest Rates and Stock Indices

  • Understanding Interest rates,
  • Understanding the Stock Index,
  • Economic Significance of Index Movements,
  • Index Construction Issues,
  • Desirable Attributes of an Index,
  • Applications of Index

CHAPTER 3: Futures Contracts, Mechanism and Pricing Forward Contracts

  • Limitations of forward markets,
  • Introduction to Futures,
  • Distinction between Futures and Forwards Contracts,
  • Futures Terminology,
  • Trading Underlying vs. Trading Single Stock Futures,
  • Futures Payoffs,
  • Pricing Futures,
  • Pricing Stock Futures.

CHAPTER 4: Application of Futures Contracts

  • Understanding Beta,
  • Numerical illustration of Applications of Stock Futures

CHAPTER 5: Options Contracts, Mechanism, and Applications

  • Option Terminology,
  • Comparison between Futures and Options,
  • Options Payoffs,
  • Application of Options

CHAPTER 6: Pricing of Options Contracts and Greek Letters

  • Variables affecting Option Pricing,
  • The Black Scholes Merton Model for Option Pricing (BSO),
  • The Greek

CHAPTER 7: Trading of Derivatives Contracts

  • Futures and Options Trading System,
  • The Trader Workstation,
  • Futures a nd Options Market Instruments,
  • Criteria for Stocks and Index Eligibility for Trading,
  • Charges

CHAPTER 8: Clearing and Settlement

  • Clearing Entities,
  • Clearing Mechanism,
  • Settlement Procedure,
  • Risk Management,
  • Margining System

CHAPTER 9: Regulatory Framework

  • Securities Contracts (Regulation) Act, 1956,
  • Securities and Exchange Board of India Act, 1992,
  • Regulation for Derivatives Trading,
  • Adjustments for Corporate Actions

CHAPTER 10 : Accounting for Derivatives

  • Accounting for futures,
  • Accounting for options,
  • Taxation of Derivative Tra nsaction in Securities