Derivatives Market (Dealers) Module (DMDM) Module (Intermediate) Practice Exam
Derivatives Market (Dealers) Module (DMDM) Module (Intermediate) Practice Exam
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What’s Included
No. of Questions347
AccessImmediate
Access DurationLife Long Access
Exam DeliveryOnline
Test ModesPractice, Exam
Derivatives Market (Dealers) Module (DMDM) Module (Intermediate) Practice Exam
Derivatives are recognized as highly potent financial tools. The Indian equity derivatives market has witnessed substantial expansion since their introduction in 2000. The Derivatives Market (Dealers) Module (DMDM) offers a comprehensive understanding of various equity derivative types, encompassing their trading, clearing, settlement procedures, and regulatory framework. This module serves to:
Educate on fundamental aspects of the derivatives market.
Illuminate the utilization of derivative products for speculation, hedging, and arbitrage.
Provide insight into trading dynamics, clearing, settlement processes, and risk management within equity derivatives.
Offer knowledge on regulatory, accounting, and taxation aspects pertinent to equity derivatives.
Who should take the exam?
The exam is best for:
Students
Stock Brokers and Sub-Brokers dealing in derivatives
Custodians and Employees of Mutual funds
Individual investors as well as High Networth Individuals (HNIs)
Portfolio Managers
Financial Institutions
Anybody having interest in the Stock market operations
Types of Derivative Contracts, History of Financial Derivatives Markets, Participants in a Derivative Market, Economic Function of the Derivative Market
Topic 2: Learn about Interest Rates and Stock Indices
Understanding Interest rates, the Stock Index, the Economic Significance of Index Movements, Index Construction Issues, Desirable Attributes of an Index, Applications of Index.
Topic 3: Understand Futures Contracts, Mechanism and Pricing Forward Contracts
Limitations of forward markets, Introduction to Futures, Distinction between Futures and Forwards
Contracts, Futures Terminology, Trading Underlying vs. Trading Single Stock Futures, Futures Payoffs, Pricing Futures, Pricing Stock Futures.
Topic 4: Application of Futures Contracts
Understanding Beta, Numerical illustration of Applications of Stock Futures
Topic 5: Understand Options Contracts, Mechanism and Applications
Option Terminology, Comparison between Futures and Options, Options Payoffs, Application of Options
Topic 6: Learn about Pricing of Options Contracts and Greek Letters
Variables affecting Option Pricing, The Black Scholes Merton Model for Option Pricing (BSO), The Greeks
Topic 7: Trading of Derivatives contracts
Futures and options Trading system, the trader workstation, Future and options Market Instruments, criteria for stocks and index eligibility for trading charges.
Topic 8: Clearing and Settlement
Clearing Entities, Clearing Mechanism, Settlement Procedure, Risk Management, Margining System
Topic 9: Learn about Regulatory Framework
Securities Contracts (Regulation) Act, 1956, Securities and Exchange Board of India Act, 1992, Regulation for Derivatives Trading, Adjustments for Corporate Actions
Topic 10: Understand Accounting for Derivatives
Accounting for futures, Accounting for options, Taxation of Derivative Transaction in Securities
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Lucas MĂĽller
Crucial for mastering margin calculations and mark-to-market (MTM) processes. The numerical problems on initial vs. maintenance margins were exactly like those on the intermediate module.
Michael Davis
Excellent focus on the clearing and settlement mechanism in the derivatives market. It provides a solid understanding of the role of the clearinghouse and the legal framework governing dealers.
Holly Sews
The practice questions on payoff diagrams for futures and options were very challenging but necessary. It helped me visualize the risk-reward profile of complex strategies like straddles and butterflies.
