Vskills certification for Futures Trader assesses the candidate as per the company’s need for options and futures trading. The certification tests the candidates on various areas in futures markets basics, VaR, pricing of futures contracts, investment assets, stochastic interest rates, hedging, short-term interest rate futures, t-bills, long-term interest rate futures, foreign exchange futures and stock index futures.

1. Certified Futures Trader
VS-1137

2. Certified Futures Trader
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CCCCertifiedertifiedertifiedertified Futures TraderFutures TraderFutures TraderFutures Trader
Certification CodeCertification CodeCertification CodeCertification Code VS-1137
Vskills certification for Futures Trader assesses the candidate as per the company’s need
for options and futures trading. The certification tests the candidates on various areas in
futures markets basics, VaR, pricing of futures contracts, investment assets, stochastic
interest rates, hedging, short-term interest rate futures, t-bills, long-term interest rate futures,
foreign exchange futures and stock index futures.
Why shoWhy shoWhy shoWhy should one take this certification?uld one take this certification?uld one take this certification?uld one take this certification?
This Course is intended for professionals and graduates wanting to excel in their chosen
areas. It is also well suited for those who are already working and would like to take
certification for further career progression.
Earning Vskills Futures Trader Certification can help candidate differentiate in today's
competitive job market, broaden their employment opportunities by displaying their
advanced skills, and result in higher earning potential.
Who will benefit from takWho will benefit from takWho will benefit from takWho will benefit from taking this certification?ing this certification?ing this certification?ing this certification?
Job seekers looking to find employment in options and futures trading departments of
various companies, students generally wanting to improve their skill set and make their CV
stronger and existing employees looking for a better role can prove their employers the
value of their skills through this certification.
Test DetailsTest DetailsTest DetailsTest Details
• Duration:Duration:Duration:Duration: 60 minutes
• No. of questions:No. of questions:No. of questions:No. of questions: 50
• Maximum marks:Maximum marks:Maximum marks:Maximum marks: 50, Passing marks: 25 (50%)
There is no negative marking in this module.
Fee StructureFee StructureFee StructureFee Structure
Rs. 4,500/- (Includes all taxes)
Companies that hire VskillsCompanies that hire VskillsCompanies that hire VskillsCompanies that hire Vskills Certified Futures TraderCertified Futures TraderCertified Futures TraderCertified Futures Trader
Futures Traders are in great demand. Companies specializing in options and futures
trading are constantly hiring skilled Futures Traders. Various public and private companies
also need Futures Traders for their options and futures trading departments.

3. Certified Futures Trader
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Table of ContentsTable of ContentsTable of ContentsTable of Contents
1.1.1.1. IntroductionIntroductionIntroductionIntroduction
1.1 Forward Contracts versus Futures Contracts
1.2 Type of Assets Underlying Futures Contracts
1.3 Futures Exchanges
1.4 Types of Assets Underlying Options Contracts
1.5 Options Exchanges
1.6 Hedgers, Speculators, and Arbitrageurs
1.7 The Role of Futures and Options Markets
1.8 Reasons for the Rapid Growth of Derivative Markets
1.9 The Recent Indian Story in Derivatives
1.10 Electronic Exchanges: The State-of-the-Art
2.2.2.2. Fundamentals of Futures MarFundamentals of Futures MarFundamentals of Futures MarFundamentals of Futures Marketsketsketskets
2.1 Standardization of Futures Contracts
2.2 Margins and Marking to Market: General Principles
2.3 Spot-Futures Convergence at Expiration
2.4 Trading: General Principles
2.5 Value at Risk (VaR)
2.6 VaR in the Context of Futures Trading in India
2.7 Types of Members and the Margining System in India
2.8 Types of Orders
2.9 Liquidating a Futures Position
2.10 Trading Volume versus Open Interest
2.11 Conversion Factors When There are Multiple Deliverable Grades
2.12 Single Stock Futures
3.3.3.3. Pricing of Futures ContractsPricing of Futures ContractsPricing of Futures ContractsPricing of Futures Contracts
3.1 Notation
3.2 Assumptions
3.3 Forward Contract on a Security That Provides No Income
3.4 Forward Contracts on Assets That Provide a Known Dividend Yield
3.5 Forward Contracts on Commodities
3.6 Investment Assets
3.7 Consumption Assets
3.8 Calendar Spreads and Arbitrage
3.9 Net Carry
3.10 'Backwardation' and 'Contango'
3.11 Delivery Options
3.12 Imperfect Markets
3.13 Synthetic Securities
3.14 Forward Price versus Futures Prices
3.15 Stochastic Interest Rates
3.16 Quasi- Arbitrage

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3.17 Risk and Futures Prices
4.4.4.4. HedgingHedgingHedgingHedging
4.1 A Selling Hedge
4.2 A Buying Hedge
4.3 Lifting a Hedge Prior to the Expiration of the Futures Contract
4.4 Basis Risk
4.5 Selecting a Futures Contract
4.6 A Rolling Hedge
4.7 The Hedge Ratio
4.8 Estimating the Hedge Ratio
4.9 Tailing a Hedge
4.10 Quantity Uncertainty
4.11 Rationale for Hedging
4.12 Hedging Processing Margins
4.13 Developing Derivative Exchanges Key Issues
5.5.5.5. ShortShortShortShort ----Term Interest Rate FuturesTerm Interest Rate FuturesTerm Interest Rate FuturesTerm Interest Rate Futures
5.1 Eurodollars
5.2 T-bills
5.3 Yields
5.4 T-bill Futures
5.5 The No-Arbitrage Pricing Condition
5.6 Risk Management Using T-bill Futures
5.7 Shortening T-bill Maturities
5.8 Lengthening T-bill Maturities
5.9 Risk Management Using Chained Hedge Ratios
5.10 Introduction to Eurodollar Futures
5.11 Calculating Profits and Losses on ED Futures
5.12 Bundles and Packs
5.13 Locking in a Borrowing Rate
5.14 Cash and Carry Arbitrage
5.15 Reverse Cash and Carry Arbitrage
5.16 The No-Arbitrage Pricing Equation
5.17 Hedging Rates for Periods Not Equal to 90 Days
5.18 Creating a Fixed Rate Loan
5.19 Strip versus Stack Hedges
5.20 The TED Spread
6.6.6.6. LongLongLongLong----Term Interest Rate FuturesTerm Interest Rate FuturesTerm Interest Rate FuturesTerm Interest Rate Futures
6.1 Fundamentals of Bond Valuation
6.2 Duration
6.3 The Cash Market
6.4 The Futures Market
6.5 Conversion Factors
6.6 Calculating the Invoice Price for a T-bond

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6.7 The Cheapest to Deliver Bond
6.8 Arbitrage or Risk Arbitrage?
6.9 Seller's Options
6.10 Hedging
7.7.7.7. Foreign Exchange FuturesForeign Exchange FuturesForeign Exchange FuturesForeign Exchange Futures
7.1 Purchase and Sale
7.2 The Spot Market
7.3 Arbitrage
7.4 The Forward Market
7.5 Merchant Rates and Exchange Margins
7.6 The No-Arbitrage Forward Price
7.7 One Way Arbitrage
7.8 The Relationship Between Interest Rate Parity and One-Way Arbitrage
7.9 Options Forwards
7.10 Modification of Forward Contracts
7.11 Futures Markets
7.12 Hedging an Export Transaction
7.13 Hedging an Import Transaction
7.14 Creating Synthetic Investments
7.15 Borrowing Funds Abroad
7.16 Creating Synthetic Futures Contracts
7.17 Creating Synthetic Futures Contracts
7.18 Creating Synthetic Short-Term Interest Rate Contracts
7.19 Forward Covered Interest Arbitrage
8.8.8.8. Stock Index FuturesStock Index FuturesStock Index FuturesStock Index Futures
8.1 Price Weighted Indices
8.2 Value Weighted Indices
8.3 Equally Weighted Indices
8.4 Forming Portfolios to Mimic an Index
8.5 Portfolio Re-Balancing
8.6 Re-balancing an Equally Weighted Portfolio
8.7 Changing the Base Period Capitulation
8.8 Pricing of Index Futures
8.9 Cash and Carry Arbitrage
8.10 Reverse Cash and Carry Arbitrage
8.11 The No-Arbitrage Equation
8.12 Index Arbitrage and Programme Trading
8.13 Hedging with Index Futures
8.14 Market Timing with Index Futures
8.15 Using Index Futures to Change the Beta of a Portfolio
8.16 Stock Picking
8.17 Portfolio Insurance
8.18 Index Futures and Stock Market Volatility
8.19 Index Futures in India

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Sample QuestionsSample QuestionsSample QuestionsSample Questions
1.1.1.1. The price that the buyer of a call option payThe price that the buyer of a call option payThe price that the buyer of a call option payThe price that the buyer of a call option pays to acquire the option is called thes to acquire the option is called thes to acquire the option is called thes to acquire the option is called the
A. exercise price
B. execution price
C. premium
D. None of the above
2222.... The price that the buyer of a call option pays for the underlying asset if sheThe price that the buyer of a call option pays for the underlying asset if sheThe price that the buyer of a call option pays for the underlying asset if sheThe price that the buyer of a call option pays for the underlying asset if she
executes her option is called theexecutes her option is called theexecutes her option is called theexecutes her option is called the
A. strike price
B. execution price
C. All of the above
D. None of the above
3333.... The price that the writer of a put option receives for the underlying asset if theThe price that the writer of a put option receives for the underlying asset if theThe price that the writer of a put option receives for the underlying asset if theThe price that the writer of a put option receives for the underlying asset if the
option is exercised is called theoption is exercised is called theoption is exercised is called theoption is exercised is called the
A. strike price
B. execution price
C. All of the above
D. None of the above
4444.... All else eqAll else eqAll else eqAll else equal, call option values are lowerual, call option values are lowerual, call option values are lowerual, call option values are lower
A. in the month of May.
B. for low dividend payout policies.
C. for high dividend payout policies
D. None of the above
5555.... A put option on a stock is said to be out of the money ifA put option on a stock is said to be out of the money ifA put option on a stock is said to be out of the money ifA put option on a stock is said to be out of the money if
A. the exercise price is higher than the stock price.
B. the exercise price is less than the stock price.
C. the exercise price is equal to the stock price.
D. None of the above
Answers: 1 (C), 2 (A), 3 (D), 4 (C), 5 (B)