Derivatives Definition Types Forward Contracts Futures Contracts Options
Swaps Differences between Cash and Future Markets Types of Traders OTC and
Exchange Traded Securities Types of Settlement Uses and Advantages of Derivatives
Risks in Derivatives.
UNIT II FUTURES CONTRACT
Specifications of Futures Contract - Margin Requirements Marking to Market Hedging using
Futures Types of Futures Contracts Securities, Stock Index Futures, Currencies and
Commodities Delivery Options Relationship between Future Prices, Forward Prices and
Spot Prices.
UNIT III OPTIONS
Definition Exchange Traded Options, OTC Options Specifications of Options Call and Put
Options American and European Options Intrinsic Value and Time Value of Options
Option payoff, options on Securities, Stock Indices, Currencies and Futures Options pricing
models Differences between future and Option contracts.
UNIT IV SWAPS
Definition of SWAP Interest Rate SWAP Currency SWAP Role of Financial Intermediary
Warehousing Valuation of Interest rate SWAPs and Currency SWAPs Bonds and FRNs
Credit Risk.
UNIT V DERIVATIVES IN INDIA
Evolution of Derivatives Market in India Regulations - Framework Exchange Trading in
Derivatives Commodity Futures Contract Terminology and Specifications for Stock
Options and Index Options in NSE Contract Terminology and specifications for stock
futures and Index futures in NSE Contract Terminology and Specifications for Interest Rate
Derivatives.
Text Books
1. John.C.Hull, Options, Futures and other Derivative Securities, PHI Learning, 7th Edition,
2008
2. Keith Redhead, Financial Derivatives An Introduction to Futures, Forwards, Options
and SWAPs, PHI Learning, 2008.
Reference Books
1. Stulz, Risk Management and Derivaties, Cengage Learning, 1st Edition, 2008.
2. Varma, Derivaties and Risk Management, 1st Edition, 2008.
3. David Dubofsky Option and Financial Futures Valuation and Uses, McGraw Hill
International Edition.
4. S.L.Gupta, Financial Derivaties- Theory, Concepts and Practice, Prentice Hall Of India,
2008.
5. Website of NSE, BSE.