Curriculum

  1. Introduction to Commodity Markets
    • History of Commodity Trading
    • Spot and Derivatives Trading in Commodities
    • Major Commodities Traded in Derivatives Exchanges in India
    • Participants in Commodity Derivatives Markets
    • Commodities Trading vis-à-vis Trading in Other Financial Assets
    • Commodity Markets Ecosystem
    • Commodity Market Indices
    • Factors Impacting the Commodity Prices
  1. Commodity Futures
    • Introduction to Futures
    • Distinction between Forwards and Futures
    • Cost-of-Carry
    • Convergence
    • Fair Value of a Futures Contract
    • Convenience Yield
    • Commodity Futures and Commodity Forwards
    • Pay-off profile for Futures Contracts
    • Spot Price Polling
  1. Commodity Options
    • Introduction to Options
    • Option Terminology
    • Pay off Profiles of Options Contracts
    • Determinants of Option Premium
    • Options on Commodity Futures
  1. Uses of Commodity Derivatives
    • Hedging
    • Long Hedge and Short Hedge Strategy: Using Futures
    • Speculation
    • Arbitrage
    • Spread Trading
    • Basis
    • Option Trading Strategies
  1. Trading Mechanism
    • Membership on Commodity Derivatives Exchange
    • Trading System in Commodity Derivatives Exchanges
    • Selection Criteria of Commodities for Trading on Derivatives Exchanges
    • Contract Specifications for Various Commodity Derivatives Contracts
    • Profit/Loss per Contract for a Change of One Tick
    • Order Types and Conditions
    • Tracking Commodity Futures and Options prices
  1. Clearing Settlement and Risk Management of Commodity Derivatives
    • Clearing and Settlement
    • Delivery Process
    • Entities Involved in the Clearing and Settlement Process
    • Premium/Discount
    • Penalty for Delivery Default by the Seller
    • Deliveries in the Case of Physical Delivery
    • Risk Management for Exchange Traded Commodity Derivatives Markets
    • Position Limits and Computation of Open Position
    • Salient Features of Risk Containment Measures
    • Margin Mechanism
  1. Accounting and Taxation
    • Important Accounting Aspects related to Trading in Commodity Derivatives
    • Guidance Note Issued by ICAI on Accounting Treatment of Derivative Transactions
    • Important Tax Aspects related to Trading in Commodity Derivatives
  1. Legal & Regulatory Environment of Commodity Derivatives in India
    • Regulatory Structure of Commodities Market
    • Securities Contracts (Regulation) Act, 1956
    • Securities and Exchange Board of India Act, 1992
    • SEBI’s Code of Conduct for Brokers
    • Risk Disclosure to Client and KYC
    • Investors Grievance Redressal Mechanism