NISM Series I (Currency Derivatives) study plan
NISM Series I (Currency Derivatives) · Give each week a clear focus.
8 weeks · About 7 hours per week
Currency Derivatives
Map the NISM Series I syllabus into a one-page checklist covering the currency derivatives topic areas: forex market structure, forward and futures contracts, options, exchange-traded versus OTC products, clearing and settlement, margining, taxation, and regulatory framework
Define and correctly distinguish spot rate, forward rate, futures price, premium, discount, appreciation, and depreciation using numerical examples you construct yourself
Explain how the Indian forex market is structured across authorised dealers, banks, and recognised exchanges, and identify which products trade where
Compute direct and indirect quotes, cross rates, and inverse quotes from given two-currency data without using a calculator shortcut sheet
Your checkpoint
A one-page syllabus checklist plus a 20-question self-made numerical set on quoting conventions and cross rates, scored with worked solutions
Currency Derivatives
Derive forward rates from spot rates using covered interest rate parity and explain each input in the formula
Work through at least 15 numerical problems on forward premium and discount, annualised versus actual-period rates, and arbitrage between money market and forward market
Describe the settlement mechanics of a currency futures contract, including daily mark-to-market and final settlement
Explain the role of the clearing corporation and the settlement guarantee mechanism in exchange-traded currency derivatives
Your checkpoint
A formula sheet with five solved worked examples per formula, plus a written 300-word explanation of daily mark-to-market cash flows in a currency futures position
Currency Derivatives
Compute initial margin, maintenance margin, and variation margin for a multi-day currency futures position and identify the exact day a margin call triggers
Explain how SPAN-style portfolio margining differs from flat per-contract margining and why the difference matters to a trader
Calculate the profit and loss on long and short currency futures positions across a sequence of daily settlement prices
Identify the contract specifications for exchange-traded currency futures: contract size, quotation convention, tick size, and expiry cycle
Your checkpoint
A spreadsheet or hand-built table simulating a five-day currency futures position with margin balances, margin calls, and final P&L, plus a short interpretation note
Currency Derivatives
Price currency call and put options using the covered interest rate parity relationship between strike, spot, and forward
Compute intrinsic value, time value, and payoff at expiry for long and short currency option positions
Explain the four basic currency option strategies and identify the market view each expresses
Distinguish European versus American exercise styles and explain how each is used in exchange-traded versus OTC currency options
Your checkpoint
A payoff-diagram workbook covering long call, short call, long put, short put, and one combined strategy, with break-even points and maximum profit and loss computed for each
Currency Derivatives
Explain hedging with currency futures and options for an importer and an exporter, including the direction of the hedge and the basis risk involved
Compute the hedge ratio and the effective locked-in rate for a hedged exposure, and compare the outcome with an unhedged position
Describe speculation and arbitrage strategies in currency derivatives and distinguish them from hedging by intent and by risk profile
Identify the tax treatment of income from currency derivatives transactions and the record-keeping obligations that follow
Your checkpoint
Two complete hedging case studies, one importer and one exporter, each with the hedge construction, the effective rate achieved, and a comparison against the unhedged outcome
Currency Derivatives
Summarise the regulatory framework governing currency derivatives in India, including the roles of the securities regulator and the central bank and the boundary between their jurisdictions
List the eligibility, know-your-client, and risk-disclosure requirements that apply before a client can trade currency derivatives
Explain the code of conduct and fair practice obligations expected of a currency derivatives dealer or sales person
Identify the key investor-protection mechanisms, grievance redressal routes, and arbitration process available to clients
Your checkpoint
A two-page regulatory summary organised by who regulates what, plus a 25-item rapid-recall list of compliance and conduct obligations
Currency Derivatives
Complete a full-length timed mock test under exam conditions and record the score, time per section, and error pattern
Classify every incorrect answer by cause: conceptual gap, calculation slip, misread question, or unknown fact
Re-study only the weak areas flagged by the mock and rewrite the relevant formula or rule in your own words
Practise at least 40 mixed numerical questions on forwards, futures, options, and margining at exam pace
Your checkpoint
A mock-test error log with every wrong answer categorised, the corrected reasoning written out, and a prioritised list of the three weakest topics
Currency Derivatives
Re-take a second full-length mock and target a score comfortably above the pass mark with improved time management
Drill the highest-frequency calculation types until each can be solved in under 90 seconds without reference material
Recite from memory the contract specifications, margin mechanics, and regulatory roles that are commonly tested as direct recall
Review the error logs from both mocks and confirm every previously wrong item can now be answered correctly with reasoning
Your checkpoint
A final one-page revision sheet of formulas, contract specifications, and regulatory facts, plus a second mock score report showing improvement over week 7
Milestones
Week 2: Can derive a forward rate from spot and interest rates and explain covered interest rate parity without notes, and score at least 80% on a self-made 15-question forward pricing set
Week 4: Can compute margin balances and margin-call days for a multi-day futures position and draw correct payoff diagrams for all four basic currency options from memory
Week 6: Can state who regulates what in Indian currency derivatives and list the pre-trade client onboarding and risk-disclosure requirements without reference
Week 7: First full-length timed mock completed with a score recorded, every error categorised by cause, and the three weakest topics identified
Week 8: Second full-length mock scored above the pass mark with improved timing, and every item from both error logs answered correctly with written reasoning