NISM Series XIII Syllabus: Common Derivatives
All 10 chapters of the Common Derivatives workbook, and what each one covers.
The NISM Series XIII curriculum has 10 units. One paper covers all three exchange-traded derivatives segments in India: equity derivatives, currency derivatives and interest rate derivatives. Units I and II lay the groundwork, units III to VI teach futures and options and the strategies built on them, and units VII to X cover operations, law, accounting, tax and sales practice.
NISM publishes no weightage for any XIII unit; any site showing a percentage per chapter has invented it. This page follows NISM's own unit list and the topics under each.
All 10 units at a glance
Unit titles as NISM's curriculum names them, with the topics each one lists.
| Unit | What it covers |
|---|---|
| I. Basics of Derivatives | What a derivative is, market history and growth, Indian derivative products, participants and their roles, OTC vs exchange-traded markets, economic purpose and risks |
| II. Introduction to the Underlying Markets | Equity markets and indices, currency markets, fixed-income securities, interest rates and the yield curve, and debt return and risk measures (current yield, YTM, duration, PVBP, convexity) |
| III. Introduction to Forwards and Futures | Forward and futures contracts, equity and index futures, payoff charts, futures pricing, currency futures and interest rate parity, interest rate futures and delivery of IRD contracts (conversion factor, invoice amount, cheapest-to-deliver bond) |
| IV. Strategies Using Futures | Hedging, speculation and arbitrage with equity futures, currency futures and interest rate futures |
| V. Introduction to Options: Options on Equities and Currencies | Option basics, premium, calls and puts, buying vs writing, European vs American, moneyness, binomial and Black-Scholes pricing, option Greeks, payoff charts, uses of options |
| VI. Option Trading Strategies: Strategies using Equity Options and Currency options | Spreads, straddle, strangle, covered call, protective put, collar and butterfly, each with its market view and payoff chart |
| VII. Introduction to Trading, Clearing, Settlement & Risk Management | Trading systems, clearing and open position computation, settlement of futures and options, SPAN margining and mark to market, position limits and net worth rules, margin collection and delivery procedure |
| VIII. Legal and Regulatory Environment | SCRA 1956, SEBI Act 1992, derivatives trading, clearing and risk rules, the L C Gupta and J R Verma committee reports, the RBI-SEBI standing technical committee, FEMA 1999, RBI currency futures directions, SEBI rules for currency derivatives exchanges, bond and IRD market regulators, IRD reporting, FIMMDA's role |
| IX. Accounting and Taxation | Accounting treatment of derivative contracts and taxation of derivative transactions in securities |
| X. Sales Practices, Code of Conduct and Investor Protection Measures | SEBI codes of conduct for brokers and sub-brokers, client risk profiling, KYC and trading documents, best sales practices, grievance redressal, complaints and arbitration at exchanges |
Units I and II: the three underlying markets
Unit I is the vocabulary: forwards, futures, options, who trades them, and why an exchange-traded contract differs from an OTC one. If you hold Series VIII, most of it is revision.
Unit II is where XIII departs from the single-segment exams: three underlying markets, not one. The debt measures at its end (yield to maturity, duration, PVBP, convexity) are the base for every interest rate derivatives question later. Candidates from an equity desk tend to skip this part and pay for it in units III and IV.
Units III to VI: futures, options and strategies
Unit III teaches futures across all three segments. The IRD delivery topics (conversion factor, invoice amount, cheapest-to-deliver bond) are the least familiar part of the paper for most candidates.
Unit IV applies futures to hedging, speculation and arbitrage in each segment. Units V and VI cover options on equities and currencies only, as their titles say: unit V the mechanics, unit VI the named strategies. Learn to draw the payoff of a straddle, strangle, collar and butterfly from memory; the paper describes a position and asks what it earns or loses at a given price.
Free account, this exam preselected.
Units VII to X: operations, law, tax and conduct
Unit VII is the back office: clearing, open positions, settlement, SPAN margins and mark to market, and the position limits and net worth rules a member lives under. Unit VIII is the longest unit by topic count: SCRA, the SEBI Act, FEMA, the RBI directions that created currency futures, the committee reports that shaped Indian derivatives regulation, and the regulators and reporting rules of the IRD market.
Unit IX is short: accounting for a derivative contract and tax on its gains. Unit X is the sales side, which is what an approved user is actually certified for: broker codes of conduct, risk profiling, KYC, grievance redressal and arbitration.
How XIII tests the syllabus
The paper is 150 single MCQs of 1 mark each in 3 hours, with 25% of a question's marks (0.25) deducted for a wrong answer. Units II to VI produce calculation questions: a futures fair price, a currency forward from two interest rates, the payoff of a two-leg option position. Units VII, VIII and X produce rule questions. The recurring trap is carrying one segment's rule into another: equity, currency and interest rate derivatives differ on contract size, settlement, who regulates them and whether delivery is possible, and the wrong option is usually the right answer for a different segment.
FAQs
What is NISM Series 13?expand_more
NISM-Series-XIII: Common Derivatives Certification Examination. One paper covering equity, currency and interest rate derivatives together, as an alternative to passing Series VIII, I and IV separately. Its curriculum has 10 units, listed above.
How many chapters are there in the NISM XIII syllabus?expand_more
10 units, from Basics of Derivatives (unit I) to Sales Practices, Code of Conduct and Investor Protection Measures (unit X), as published on NISM's curriculum page.
What is the chapter-wise weightage for NISM Series XIII?expand_more
NISM does not publish one. Any unit percentage you see for XIII is not from NISM. Plan your study around the units new to you: for most candidates the currency and interest rate parts of units II to IV and the regulatory list in unit VIII.
Is NISM 13 difficult?expand_more
It is wider than the single-segment derivatives exams, not deeper. The same futures and options theory is applied to equities, currencies and interest rates, over 150 questions in 3 hours with negative marking. The hard part is the breadth of unit VIII and the interest rate derivatives material, not any one calculation.
Does the XIII syllabus include options on interest rates?expand_more
No. Units V and VI are titled options on equities and currencies. Interest rate derivatives appear as futures (units III and IV), built on the bond maths of unit II, with their delivery and regulatory topics in units III and VIII.
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