NATIO

ONAL STOCK
S EXCHA
ANGE OF INDIA
A LIMITE
ED

Depart
rtment : SB
BU-Educatio
on

NCFM
M COURS
SE OUTLINE

Derivattives Marke
et (Dealers) Module (D
DMDM)

Introduction
n to Derivatives
Types of De
erivative Conttracts, Historry of Financial Derivatives Markets, P
Participants in a Derivativve
Market, Economic Functtion of The D Derivative Ma arket .

Understandding Interestt Rates and Stock Indic ces

Understandiing Interest rates,
r Undersstanding the Stock Index, Economic S Significance of Index
Movements,, Index Cons ues, Desirable Attributes of an Index, Applications
struction Issu s of Index.

Futures Contracts, Mec chanism an d Pricing Fo orward Conttracts

Limitations of forward markets,
m Intro
oduction to Futures, Distin
nction betweeen Futures and
a Forwards
Contracts, Futures
F Termminology, Trad ding Underlyying vs. Trading Single S
Stock Futuress, Futures
Payoffs, Priccing Futures, Pricing Stocck Futures.

Application
n of Futures Contracts
Understandiing Beta, Numerical illusttration of App
plications of Stock Futurees

Options Coontracts, Mechanism annd Applicatioons

Option Term
minology, Com
mparison bettween Future
es and Optio
ons, Options Payoffs, App
plication of
Options

Pricing of Options
O Conntracts and GGreek Letters
Variables aff
ffecting Optio
on Pricing, Th
he Black Sch
holes Merton
n Model for O
Option Pricing
g (BSO), The
e
Greeks

Trading of Derivatives
D Contracts
Futures and Options Tra ading Systemm, The Trade er Workstation, Futures a nd Options Market
M
Instruments,, Criteria for Stocks and IIndex Eligibillity for Tradin
ng, Charges

Clearing an
nd Settlemen nt
Clearing Enttities, Clearin
ng Mechanissm, Settlement Procedure
e, Risk Manaagement, Ma
argining Systtem

Regulatory Framework k
Securities Contracts
C (Re
egulation) Acct, 1956, Securities and Exchange
E Booard of India Act, 1992,
Regulation for
f Derivative
es Trading, AAdjustments for Corporate Actions

Accountingg for Derivattives

Accounting for
f futures, Accounting
A fo
or options, Ta
axation of De
erivative Tra nsaction in Securities
S

Regd.Offfice:Exchan
ngePlaza,Ba
andraKurlaCComplex,Bandra(E),Mu
umbai400 051Page 1 of 1