Equity Derivative

What Will You Learn?

• By the completion of this course, you will be able to confidently analyze and trade derivative instruments while managing the inherent risks of leverage. Specifically, you will be able to:
• Deconstruct Derivative Instruments: Differentiate between Futures, Options, Forwards, and Swaps, and identify the unique roles of Hedgers, Speculators, and Arbitrageurs.
• Master Index Dynamics: Understand how benchmarks like Nifty 50 and Sensex are constructed using free-float market capitalization and how they serve as underlying assets.
• Price Futures Contracts: Utilize the "Cost of Carry" model to determine fair value and understand the daily Mark-to-Market (MTM) settlement process.
• Evaluate Options Payoffs: Master the terminology of Call and Put options, including the relationship between Strike Price, Premium, and Expiry.
• Calculate Option Value: Distinguish between Intrinsic Value and Time Value, and analyze the impact of volatility and time decay.
• Decode the "Greeks": Apply Delta, Gamma, Theta, Vega, and Rho to predict how option prices will react to changes in the underlying price, time, and market volatility.
• Execute Advanced Strategies: Implement professional trading setups such as Bull/Bear Spreads, Straddles, and Strangles based on market outlook and volatility.
• Navigate Trading Mechanisms: Manage order types, understand contract cycles (Near, Next, Far month), and execute cash or physical settlements.
• Manage Financial Risk: Understand the SPAN and Exposure margin systems used by Clearing Corporations to maintain market integrity.
• Ensure Regulatory Compliance: Operate within the SEBI framework, adhering to investor protection measures and fair trading guidelines.