Commodity and Derivatives Market – Revised TYBMS Syllabus 2016

Modules at a Glance

SN Modules  No. of Lectures 
 1  Introduction to Commodities Market and Derivatives Market  15
 2  Futures and Hedging  15
 3  Options and Option Pricing Models  15
 4  Trading, Clearing & Settlement In Derivatives Market and Types of Risk  15
Total  60

Commodity and Derivatives Market – Syllabus Overview

SN Modules/ Units
 1 Introduction to Commodities Market and Derivatives Market
a) Introduction to Commodities Market :


• Meaning, History & Origin, Types of Commodities Traded, Structure of Commodities Market in India, Participants in Commodities Market, Trading in Commodities in India(Cash & Derivative Segment), Commodity Exchanges in India & Abroad, Reasons for Investing in Commodities

b) Introduction to Derivatives Market:

• Meaning, History & Origin, Elements of a Derivative Contract, Factors Driving Growth of Derivatives Market, Types of Derivatives, Types of Underlying Assets, Participants in Derivatives Market, Advantages & Disadvantages of Trading in Derivatives Market, Current Volumes of Derivative Trade in India, Difference between Forwards & Futures.

 2 Futures and Hedging
a) Futures:

• Futures Contract Specification, Terminologies, Concept of Convergence, Relationship between Futures Price & Expected Spot Price, Basis & Basis Risk, Pricing of Futures Contract, Cost of Carry Model

b) Hedging:

• Speculation & Arbitrage using Futures, Long Hedge – Short Hedge, Cash & Carry Arbitrage, Reverse Cash & Carry Arbitrage, Payoff Charts & Diagrams for Futures Contract, Perfect & Imperfect Hedge

 3 Options and Option Pricing Models
a) Options:

• Options Contract Specifications, Terminologies, Call Option, Put Option, Difference between Futures & Options, Trading of Options, Valuation of Options Contract, Factors affecting Option Premium, Payoff Charts & Diagrams for Options Contract, Basic Understanding of Option Strategies

b) Options Pricing Models:

• Binomial Option Pricing Model, Black – Scholes Option Pricing Model

 4  Trading, Clearing & Settlement In Derivatives Market and Types of Risk
a) Trading, Clearing & Settlement In Derivatives Market:

• Meaning and Concept, SEBI Guidelines, Trading Mechanism – Types of Orders, Clearing Mechanism – NSCCL – its Objectives & Functions, Settlement Mechanism – Types of Settlement

b) Types of Risk:

• Value at Risk, Methods of calculating VaR, Risk Management Measures , Types of Margins, SPAN Margin

Reference Books for Subject: Commodity and Derivatives Market

Commodity and Derivatives Market
1. John C. Hull & Basu -Futures, options & other derivatives

2. Robert McDonald, Derivatives market, Pearson education

3. John Hull, Fundamentals of futures & options

4. Ankit Gala & Jitendra Gala, Guide to Indian Commodity market, Buzzingstock publishing house

5. K.Sasidharan & Alex K. Mathews, Option trading – bull market strategies, McGraw Hill publication

6. Niti Chatnani, Commodity markets, McGraw Hill Publication

7. S.Kevin, Commodities & financial derivatives, PHI learning Pvt ltd 8. Suni K Parmeswaran, Futures & options, McGraw Hill


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