NISM Series I: Currency Derivatives Exam Pattern

This foundational unit introduces candidates to the global foreign exchange ecosystem and explains how currencies are traded internationally. You must understand the evolution of the Forex market, major participants such as central banks, commercial banks, corporates, importers/exporters, speculators, and arbitrageurs. The syllabus also evaluates your understanding of exchange rate quotations, direct and indirect quotes, currency pairs, cross-currency rates, and factors affecting currency movements such as inflation, interest rates, geopolitical risks, and central bank intervention.

This unit focuses on the core derivative instruments used in currency markets for hedging and speculation. Candidates must understand the purpose and mechanics of forwards, futures, options, and swaps in managing foreign exchange risk. You will be tested on the distinction between OTC products and exchange-traded products, along with the advantages and limitations of each derivative instrument. Our NISM Series I Practice Test modules heavily emphasise practical hedging applications and real-market scenarios.

Currency futures form a major operational and numerical component of the examination. This unit evaluates your understanding of contract specifications, quotation methods, expiry cycles, mark-to-market settlement, tick size, contract size, and daily settlement procedures. You must also understand how importers, exporters, and traders use futures contracts for hedging currency exposure.

Options are among the most technical yet highly scoring topics in the syllabus. This unit tests your understanding of call options, put options, option premiums, intrinsic value, time value, moneyness concepts (ITM, ATM, OTM), and option settlement mechanisms. You must also understand the rights and obligations of option buyers and sellers.The examination frequently includes payoff-based numerical questions involving option contracts.

This is one of the highest-weightage and most application-oriented units in the syllabus. Candidates must learn how various derivative strategies are constructed for hedging, speculation, arbitrage, and risk management purposes. The unit evaluates your ability to identify suitable strategies under different market expectations.

This unit focuses on the operational functioning of currency derivative exchanges in India. You must understand the trading architecture, order matching systems, market participants, trading sessions, order types, and risk controls implemented by exchanges.

Risk management is a critical pillar of the derivatives market. This unit evaluates your knowledge of the clearing corporation’s role, settlement cycles, margin systems, mark-to-market settlements, and default handling mechanisms.

The Indian derivatives market is tightly regulated to ensure financial stability and investor protection. This high-weightage unit demands a strong understanding of the regulatory powers and responsibilities of SEBI, RBI, recognised stock exchanges, and clearing corporations.

Although carrying lower weightage, this unit is important from a practical financial perspective. Candidates must understand the accounting treatment of derivative contracts and the taxation applicable to gains or losses arising from currency derivative transactions.

This unit focuses on ethical conduct, investor awareness, and fair market practices. Candidates must understand the responsibilities of intermediaries toward clients and the importance of maintaining market integrity. The examination frequently tests ethical judgement and compliance-based scenarios where candidates must identify the correct professional conduct expected under SEBI regulations.