NISM Series IV: Currency Derivatives Certification Exam Notes

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  • Options Definition: Contracts giving the right, not obligation, to buy/sell at a strike price.
  • Futures vs. Options: Options offer choice; futures mandate obligation.
  • Option Styles: European (exercised at expiry) and American (exercised anytime).
  • Moneyness: In-the-money, at-the-money, or out-of-the-money based on strike vs. spot price.
  • Option Pricing: Influenced by spot price, strike price, volatility, time, and risk-free rate.

NISM Interest Rate Derivatives

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