Curriculum- Equity Derivatives Certification Examination
Chapter 1: Basics of Derivatives
A. Basics of Derivatives
B. Derivatives Market – History & Evolution
C. Indian Derivatives Market
D. Market Participants
E. Types of Derivatives Market
F. Significance of Derivatives
G. Various risks faced by the participants in derivatives
Chapter 2: Understanding Index
A. Introduction to Index
B. Significance of Index
C. Types of Stock Market Indices
D. Attributes of an Index
E. Index management
F. Major Indices in India
G. Application of Indices
Chapter 3: Introduction to Forwards and Futures
A. Introduction to forward contracts
B. Futures contracts
C. Contract specifications of futures contracts
D. Some important terminology associated with futures contracts
E. Differences between Forwards and Futures
F. Pay off Charts for Futures contract
G. Futures pricing
H. Price discovery and convergence of cash and futures prices on the expiry
I. Uses of futures
Chapter 4: Introduction to Options
A. Basics of options
B. Contract specifications of exchange-traded options
C. Moneyness of an option
D. Intrinsic value and time value of an option
E. Pay off Charts for Options
F. Distinction between futures and options contracts
G. Basics of Option Pricing and Option Greeks
H. Option Pricing Models
I. Implied volatility of an option
J. Analysis of options from the perspectives of buyer and seller
Chapter 5: Strategies using Equity futures and Equity options
A. Futures contracts for hedging, speculation and arbitrage
B. Use of options for trading and hedging
C. Arbitrage using options: Put-call parity
D. Delta-hedging
E. Interpreting open interest and put-call ratio for trading strategies
Chapter 6: Trading Mechanism
A. Trading Mechanism
B. Eligibility criteria for selection of stocks for derivatives trading
C. Selection criteria of Index for trading
D. Adjustments for Corporate Actions
E. Trading costs
F. Algorithmic trading
G. Tracking Futures and Options data
Chapter 7: Introduction to Clearing and Settlement System
A. Clearing Members
B. Clearing Mechanism
C. Interoperability of clearing corporations
D. Settlement Mechanism
E. Risk Management
F. Margining and mark to market under SPAN
G. Position limits
H. Violations and Penalties
I. Settlement Guarantee Fund and Investor Protection Fund:
Chapter 8: Legal and Regulatory Environment
A. Securities Contracts (Regulation) Act, 1956
B. Securities and Exchange Board of India Act, 1992
C. Regulations in Trading
D. Regulations in Clearing & Settlement and Risk Management
E. Eligibility criteria for membership on derivatives segment
Chapter 9: Accounting and Taxation
A. Accounting
B. Taxation of derivative transaction in securities
Chapter 10: Sales Practices and Investors Protection Services
A. Understanding risk profile of the client
B. Risk Disclosure Document
C. Written Anti Money Laundering Procedures
D. Investors Grievance Mechanism
