UNIT 1. An Introduction to Indian Derivatives Market: Meaning and Types of Derivatives, Features of Derivatives Market, Derivative Exchanges of India, National Stock Exchange, Role of SEBI in Regulating Derivative Exchanges, Derivatives Trading Mechanism, Speculation, Hedging and Arbitraging, Introduction to Forward and Futures Markets, Difference between Forward and Future Contracts, Hedging through Forward Contracts.
UNIT 2. An overview of Risk Management Investors and Risk Management- Risk Management Process- Risk Models, Creating Value with Risk Management- Financial Distress and Investment, Risks in Banking- Credit Risk, Foreign Exchange Risk, Political Risk and Country Risk, Liquidity Risk.
UNIT 3. Future Contracts: Future Contract and Future Trading, Specification of the Future Contract, Newspaper Quotes, Hedging using Futures, Index Futures, Basics of Stock Index Future, Interest Rate Futures, Foreign Exchange and Currency Future, Mechanism of Future Contracts, Operations of Margin, Convergence Clearing Process, Clearing House and Clearing Margins.
UNIT 4. Option Market- Types of Options, Uses of Options, Pay offs from Options, Trading Strategies, Construction of Option Strategies in Various Market Situations and Their Pay Off, Involving Options Bull-Bear, Butter Fly, Calendar and Diagonal Spread, Straddles, Strip and Straps, Options Valuation and Pricing, Factors Determining Option Prices, Black Scholes Model, Concept of Delta, Theta, Gamma, Vega, Exchange Traded Option Stock, Option, Foreign Currency Option, Over-the Counter Exchange Option, Index Options, Put Call Parity.
UNIT 5. Swap Transactions - Interest Rate Swaps, Currency Swaps, Commodity Swaps and Equity Swaps, Pricing and Valuation of Swaps, Credit Default Swaps