**CBSE Class 12 Syllabus Derivative Market Operations**

**Derivative Marketing Operations**

**THEORY**

Time: 3 Hours Mar

**Chapter-1:** Introduction to Derivatives(5 marks)

- 1.1 Types of Derivative Contracts.
- 1.2 History of Financial Derivatives Markets.
- 1.3 Participants in a Derivative Market.
- 1.4 Economic Function of the Derivative Market.

**Chapter-2:** Understanding Interest Rates and Stock Indices (5 marks)

- 2.1 Understanding Interest rates.
- 2.2 Understanding the Stock Index.
- 2.3 Economic Significance of Index Movements.
- 2.4 Index Construction Issues.
- 2.5 Desirable Attributes of an Index.
- 2.6 Applications of Index.

**Chapter-3:** Futures Contracts, Mechanism and Pricing (5 marks)

- 3.1 Forward Contracts.
- 3.2 Limitations of Forward markets.
- 3.3 Introduction to Futures.
- 3.4 Distinction between Futures and Forwards Contracts.
- 3.5 Futures Terminology.
- 3.6 Trading Underlying vs. Trading Single Stock Futures.
- 3.7 Futures Payoffs.
- 3.8 Pricing Futures.
- 3.9 Pricing Stock Futures.

**Chapter-4:** Application of Future Contracts (5 marks)

- 4.1 Understanding Beta (Î²),
- 4.2 Numerical illustration of Applications of Stock Futures,
- 4.3 Hedging using Stock Index Futures,

**Chapter-5:** Options Contracts, Mechanism and Applications (5 marks)

- 5.1 Option Terminology.
- 5.2 Comparison between Futures and Options.
- 5.3 Options Payoffs.
- 5.4 Application of Options.

**Chapter-6:** Pricing of Options Contracts and Greek Letters (5 marks)

- 6.1 Variables affecting Option Pricing.
- 6.2 The Black Scholes Merton Model for Option Pricing (BSO).
- 6.3 The Greeks.

**Chapter-7:** Trading Of Derivatives Contracts (10 marks)

- 7.1 Futures and Options Trading System.
- 7.2 The Trader Workstation.
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- 7.3 Futures and Options Market Instruments.
- 7.4 Criteria for Stocks and Index Eligibility for Trading.
- 7.5 Charges.

**Chapter-8:** Clearing and Settlement (10 marks)

- 8.1 Clearing Entities.
- 8.2 Clearing Mechanism.
- 8.3 Settlement Procedure.
- 8.4 Risk Management.
- 8.5 Margining System.

**Chapter-9:** Regulatory Framework (5 marks)

- 9.1 Securities Contracts (Regulation) Act, 1956.
- 9.2 Securities and Exchange Board of India Act, 1992.
- 9.3 Regulation for Derivatives Trading.
- 9.4 Adjustments for Corporate Actions.

**Chapter-10:** Accounting for Derivatives (5 marks)

- 10.1 Accounting for futures.
- 10.2 Accounting for options.
- 10.3 Taxation of Derivative Transaction in Securities.

**LIST OF EQUIPMENTS AND SOFTWARE**

- Computers.
- Printer.
- Software.
- Manual for Various Software / Assorted Reference Books.
- Demonstration Stand.
- Computer Consumable Stationery.
- LCD Projector.
- NSE â€“ NLT Module.

**List of Practical subjects:**

- Arithmetic Skill Accelerator (ASA)
- Now Simulation Equity Shares (NSS)
- Now Simulation Equity Derivatives (NSD)