Basics of Derivatives

Introduction

Basics & history of derivatives

Participants in the derivatives market

Type of derivatives market

Summary

Quiz - 1

Understanding Index

Introduction to index

Type of market indices - I

Type of market indices - II

Attributes of an index

Index management

Application of indices

Quiz - 2

Introduction to Forwards and Futures

Introduction to forwards

Limitations of forwards

Introduction to futures

Contract specifications - I

Contract specifications - II

Contract specifications - III

Contract specifications - IV

Contract specifications - V

Difference between futures and forwards

Payoff Charts

Cash and carry

Convenience yield

Expectancy model

Uses of futures

Uses of index futures

Different types of hedging

Arbitrage opportunity

Quiz - 3

Introduction to Options

Basics of options

Terminology - I

Terminology - II

Moneyness

Intrinsic value and time value

Opening, closing, and leverage

Difference between futures and options

Option Greeks - I

Option Greeks - II

Option pricing model

Implied volatility

Analysis of options - I

Analysis of options - II

Quiz - 4

Option Trading Strategies

Use of futures for hedging

Use of futures for trading

Use of futures for arbitrage

Strategies using options - Bull spread

Strategies using options - Bear spread

Horizontal and diagonal spread

Strategies using options - Straddle

Strategies using options - Strangle

Strategies using options - Covered call

Strategies using options - Collar

Strategies using options - Butterfly

Strategies using options - Protective put

Arbitrage using put-call parity

Delta hedging

Interpreting open interest

Quiz - 5

Introduction to Trading Systems

Time conditions and price conditions

Trading workstation

Selection criteria of stocks

Adjustment for corporate actions

Using newspaper to track F&O

Quiz - 6

Introduction to Clearing and Settlement System

Clearing system

Interoperability of clearing corporation

Settlement mechanism - I

Settlement mechanism - II

Mark to market and span

Margins

Margins and position limits

Position limits for MF and FII

Penalties and investor protection fund

Quiz - 7

Legal and Regulatory Environment

SEBI Securities Act and regulations in trading

Regulations in clearing and settlements - I

Regulations in clearing and settlements - II

Trade Guarantee Fund (TGF)

Eligibility criteria for members

SOP for default by TM or CM

Quiz - 8

Accounting and Taxation

Accounting for forward contracts

Accounting of equity index and equity stock futures

Accounting for the final settlement

Accounting for equity index options

Accounting for squaring off of option contracts

Disclosure

Taxation

Quiz - 9.1

Quiz - 9.2

Sales Practices and Investor Protection Services

Sales practices and investor protection services

Risk profiling of clients - I

Risk profiling of clients - II

Risk-based approach

KYC - I

KYC - II

Anti-money laundering procedures

Investor grievances

Scores

Investors dos and don'ts

Quiz - 10

Ashish D. Godse is an MBA graduate and CFA Charterholder with 15+ years of experience in finance. He has over a decade of teaching experience, including 4 years as a finance professor at a premier B-school. Currently, he works as a Research Analyst for an American firm. With expertise in Financial Modeling, Valuation, Equity, Derivatives, and Corporate Finance, he simplifies complex financial concepts, making learning engaging and practical.

​This course is structured to help you ace the NISM-VIII: Equity Derivatives exam by covering all essential topics. You'll gain a deep understanding of forwards, futures, options, option Greeks, implied volatility, and trading strategies like spreads, straddles, and strangles. Additionally, the course covers SEBI regulations, settlement processes, taxation, and investor protection. With quizzes and practical insights, you’ll build a solid foundation to confidently clear the exam. In Lesson 1, Basics of Derivatives, you will understand the basics of the derivatives market. In Lesson 2, Understanding Index, you will explore different types of market indices and learn about their key attributes. In Lesson 3, Introduction to Forwards and Futures, you will learn about the fundamentals of forwards and futures, their differences, limitations, and contract specifications. You will learn about payoff charts, hedging strategies, arbitrage opportunities, and key concepts like cash and carry, convenience yield, and the expectancy model. In Lesson 4, Introduction to Options, you will learn the fundamentals of options, including key terminologies, payoff charts, moneyness, and the difference between futures and options. You will also explore option Greeks, pricing models, implied volatility, and techniques for analyzing options. In Lesson 5, Options Trading Strategies, you will learn how to use futures for hedging, trading, and arbitrage. You will also explore various options trading strategies along with concepts like delta hedging, put-call parity arbitrage, and interpreting open interest. In Lesson 6, Introduction to Trading Systems, you will learn about time and price conditions and how to select stocks for trading. You will also understand corporate action adjustments and how to track F&amp;O markets using newspapers. In Lesson 7, Introduction to Clearing and Settlement System, you will learn about the clearing and settlement process, margin requirements, position limits, and investor protection measures in the derivatives market. In Lesson 8, Legal and Regulatory Environment, you will learn about SEBI rules for trading and settlement, trade guarantee funds, and what happens if a trader defaults. In Lesson 9, Accounting and Taxation, you will learn about the accounting and taxation of derivatives. In Lesson 10, Sales Practices and Investor Protection Services, you will learn about investor protection, risk profiling, KYC norms, anti-money laundering procedures, and investor rights to ensure safe and compliant trading. Course Highlights: - Basics of forwards, futures, and options - Key difference between forwards, futures, and options - Option Greeks and implied volatility - Various options trading strategies - SEBI regulations and compliance - Accounting, settlement, disclosures, and taxation of derivatives - Investor rights and grievance redressal mechanism - Access to quizzes to ensure a thorough understanding Who is this course for: - Aspiring traders looking to understand derivatives trading - Students and beginners preparing for the NISM-VIII examination - Finance students preparing for industry certifications - Beginners who want to build a strong foundation in derivatives

NISM-VIII: Equity Derivatives

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