NISM Series 8 (NISM VIII): Equity Derivatives Certification Exam Notes

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  • Volatility Smile: Implied volatility varies across strike prices, forming a curve.
  • Option Liquidity: Higher for ATM options, lower for deep OTM options.
  • Hedging with Options: Protects against adverse price movements with limited cost.
  • Speculation with Options: Leveraged bets on price movements with capped risk for buyers.
  • Arbitrage Opportunities: Exploited when option prices deviate from theoretical values.

NISM Equity Derivatives

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