NISM Series XIII Common Derivatives Certification Exam Notes

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  • OTC vs Exchange-Traded: OTC is customized; exchange-traded is standardized. OTC has lower liquidity; exchange-traded offers better transparency and clearing guarantees.
  • Option Strategies: Use combinations to manage risk/reward .
  • Implied Volatility Role: Higher IV increases option premiums; reflects market expectations.
  • Effect of Dividends: Lowers call premium, raises put premium; adjustments made in Black-Scholes.
  • Risk Profiles: Options offer asymmetric payoffs; futures are symmetric.
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NISM Common Derivatives

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