Series-VIII (Equity & Derivative)
Total questions: 559
What is a derivative contract?
Which of the following is an example of an underlying asset for derivatives?
When did the Chicago Board of Trade (CBOT) list the first exchange-traded futures contracts?
What is the primary difference between a forward and a futures contract?
Who regulates the derivatives market in India?
When did trading in index futures start in India?
What is the main role of hedgers in the derivatives market?
Which of the following is a characteristic of an option contract?
What is the primary function of a clearing corporation in the derivatives market?
Which risk is associated with derivatives due to their leveraged nature?
Which historical event in the 1630s involved a speculative boom in tulip futures?
Which factor has NOT significantly contributed to the growth of the global derivatives market?
What was the key recommendation of the L.C. Gupta Committee formed by SEBI in 1996?
A trader buys a futures contract on a stock. How does this differ from a forward contract?
Which derivative product involves exchanging cash flows based on a prearranged formula?
What is the primary motivation for speculators in the derivatives market?
Why are OTC derivatives considered less regulated than exchange-traded derivatives?
How does the derivatives market contribute to price discovery?
Which of the following is a risk faced by participants in the derivatives market?
What document should derivatives market participants read to understand trading risks?
In the 13th century, English Cistercian Monasteries used forward contracts to:
The introduction of the Eurodollar futures contract by the CME in 1982 was significant because it:
The J.R. Varma Committee in 1998 focused on:
An arbitrageur in the derivatives market primarily aims to:
Which feature of OTC derivatives increases their counterparty risk compared to exchange-traded derivatives?
In the context of the Indian derivatives market, what was the significance of the 1999 amendment to the Securities Contract Regulation Act (SCRA)?
A trader enters a swap contract to manage interest rate risk. This contract is most similar to:
Why do derivatives enable the shift of speculative trades to organized markets?
Which of the following is a key operational risk in derivatives trading?
The growth of OTC derivative markets has been driven by:
What is the primary purpose of a derivative contract?
In a futures contract, the buyer is obligated to:
If a stock’s spot price is ₹500 and the 1-month futures price is ₹510, what is the market condition?
The margin requirement for a futures contract is typically set by:
What is the intrinsic value of a call option with a strike price of ₹200 when the underlying stock price is ₹220?
Which of the following is a characteristic of an American option?
A trader buys a put option with a strike price of ₹100 for a premium of ₹5. If the stock price falls to ₹90, what is the profit?
The Black-Scholes model is primarily used to calculate:
What is the lot size of a Nifty futures contract if one index point equals ₹2?
In a bull call spread, a trader:
The open interest in a futures contract indicates:
If the Nifty index is at 18,000 and a trader buys a 18,200 call option for ₹150, what is the breakeven price?
Which of the following is NOT a component of the Black-Scholes model?
A trader executes a straddle strategy by:
What is the purpose of the daily mark-to-market process in futures trading?
If a futures contract has a daily price limit of 5% and the previous day’s closing price was ₹1,000, what is the maximum price for the next day?
Which body regulates the derivatives market in India?
A trader sells a put option for ₹10 with a strike price of ₹500. If the stock price is ₹520 at expiration, what is the profit?
The term “in-the-money” for a call option means:
What is the primary purpose of the Options Clearing Corporation (OCC)?
A stock futures contract has a lot size of 1,000 shares. If the futures price is ₹200, what is the contract value?
Which of the following is a bearish strategy?
If the risk-free rate is 5%, the stock price is ₹100, and the 1-year futures price is ₹105, what is the cost of carry?
What is the time value of an option with an intrinsic value of ₹15 and a premium of ₹20?
A trader buys a futures contract at ₹1,000 and the price rises to ₹1,050. If the lot size is 100, what is the profit before margins?
Which of the following is NOT a type of margin in futures trading?
The Vega of an option measures its sensitivity to:
In a calendar spread, a trader:
If a stock pays a dividend of ₹10 and the futures price is ₹510, what should be the adjusted spot price for futures pricing?
What is the maximum loss for a trader who buys a call option?
The Nifty futures contract is settled:
A trader uses a butterfly spread to:
If the Nifty index is at 17,500 and a trader sells a 17,600 put for ₹100, what is the breakeven price?
What is the purpose of a clearing house in derivatives trading?
A stock’s beta is 1.2, and the market moves up by 10%. What is the expected stock movement?
The term “contango” refers to a situation where:
A trader buys a call option with a delta of 0.6. If the stock price increases by ₹10, what is the expected change in the option price?
Which of the following is a feature of index futures?
The maximum loss for a trader who sells a naked call option is:
What is the role of the National Securities Clearing Corporation Limited (NSCCL)?
A trader buys a 1-month futures contract at ₹1,200 with a lot size of 100. If the price falls to ₹1,150, what is the mark-to-market loss?
Which of the following is a benefit of hedging with derivatives?
The time decay of an option is measured by:
A trader sells a futures contract at ₹2,000 with a lot size of 50. If the price rises to ₹2,100, what is the loss?
What is the primary difference between futures and options?
A stock is trading at ₹300, and a call option with a strike price of ₹310 has a premium of ₹15. What is the intrinsic value?
The term “open interest” is updated:
A trader executes a bear put spread by:
If the Nifty index is at 18,000, what is the approximate value of a 1-month futures contract if the cost of carry is 0.5%?
The term “basis” in futures trading refers to:
A call option with a strike price of ₹200 is trading at ₹25 when the stock price is ₹220. What is the time value?
Which of the following strategies benefits from a large price movement in either direction?
The initial margin for a futures contract is ₹50,000, and the maintenance margin is ₹40,000. If the margin account falls to ₹38,000, what is required?
What is the purpose of a stop-loss order in derivatives trading?
A trader buys a put option with a strike price of ₹500 for ₹20. If the stock price is ₹480 at expiration, what is the profit?
The gamma of an option measures:
Which of the following is a feature of exchange-traded derivatives?
A trader buys a Nifty call option at ₹200 with a lot size of 50. If the premium rises to ₹250, what is the unrealized profit?
The term “backwardation” refers to a situation where:
A trader sells a call option with a strike price of ₹300 for ₹15. If the stock price is ₹280 at expiration, what is the profit?
What is the purpose of the Volatility Index (VIX)?
A futures contract has a lot size of 200 and a price of ₹500. If the initial margin is 10%, what is the margin amount?
Which strategy involves selling a call option while owning the underlying stock?
If a stock’s spot price is ₹1,000 and the futures price is ₹1,020, what is the basis?
The rho of an option measures its sensitivity to:
A trader buys a futures contract at ₹2,500 with a lot size of 100. If the price rises to ₹2,600, what is the profit?
What is the maximum profit for a trader who sells a put option?
The term “rollover” in futures trading refers to:
A trader buys a call option with a strike price of ₹400 for ₹30. If the stock price is ₹450 at expiration, what is the profit?
Which of the following is a regulatory requirement for derivatives trading in India?
The intrinsic value of a put option with a strike price of ₹500 when the stock price is ₹480 is:
A trader executes a strangle strategy by:
If the Nifty futures price is 18,200 and the spot price is 18,000, what is the market condition?
The term “leverage” in derivatives trading refers to:
A trader sells a futures contract at ₹1,500 with a lot size of 100. If the price falls to ₹1,400, what is the profit?
Which of the following is a feature of an out-of-the-money call option?
The cost of carry model for futures pricing includes:
A trader buys a put option with a strike price of ₹600 for ₹25. If the stock price is ₹580 at expiration, what is the profit?
What is the purpose of a limit order in derivatives trading?
A trader buys a call option with a delta of 0.4. If the stock price decreases by ₹10, what is the expected change in the option price?
The term “implied volatility” refers to:
A trader buys a futures contract at ₹3,000 with a lot size of 50. If the price falls to ₹2,900, what is the loss?
Which of the following is a feature of a European option?
The term “open outcry” in trading refers to:
A trader buys a call option for ₹10 with a strike price of ₹200. If the stock price is ₹220 at expiration, what is the profit?
The term “circuit breaker” in the derivatives market refers to:
A trader sells a put option with a strike price of ₹400 for ₹20. If the stock price is ₹420 at expiration, what is the profit?
The term “delta-neutral” strategy aims to:
If a stock’s spot price is ₹500 and the futures price is ₹490, what is the market condition?
The maximum profit for a trader who buys a straddle is:
A trader buys a futures contract at ₹1,500 with a lot size of 100. If the price rises to ₹1,600, what is the profit?
The term “theta” in options trading refers to:
A trader buys a put option with a strike price of ₹300 for ₹15. If the stock price is ₹280 at expiration, what is the profit?
Which of the following is a feature of over-the-counter (OTC) derivatives?
The term “margin call” refers to:
A trader sells a call option with a strike price of ₹500 for ₹25. If the stock price is ₹480 at expiration, what is the profit?
The term “arbitrage” in derivatives trading refers to:
A trader buys a call option with a strike price of ₹600 for ₹30. If the stock price is ₹650 at expiration, what is the profit?
The term “settlement price” in futures trading refers to:
A trader buys a futures contract at ₹2,000 with a lot size of 100. If the price falls to ₹1,950, what is the loss?
The term “in-the-money” for a put option means:
A trader executes a covered put strategy by:
The term “implied volatility” is derived from:
A trader buys a call option with a strike price of ₹700 for ₹40. If the stock price is ₹750 at expiration, what is the profit?
The term “open interest” decreases when:
A trader sells a futures contract at ₹3,000 with a lot size of 50. If the price rises to ₹3,100, what is the loss?
The term “gamma” in options trading measures:
A trader buys a put option with a strike price of ₹400 for ₹20. If the stock price is ₹380 at expiration, what is the profit?
The term “basis risk” in futures trading refers to:
A trader buys a call option with a strike price of ₹500 for ₹25. If the stock price is ₹550 at expiration, what is the profit?
The term “circuit filter” in the derivatives market refers to:
A trader sells a put option with a strike price of ₹600 for ₹30. If the stock price is ₹620 at expiration, what is the profit?
The term “delta-neutral” strategy aims to:
A trader buys a futures contract at ₹1,500 with a lot size of 100. If the price rises to ₹1,600, what is the profit?
The term “time value” of an option is highest when:
A trader buys a call option with a strike price of ₹800 for ₹50. If the stock price is ₹850 at expiration, what is the profit?
The term “roll yield” in futures trading refers to:
A trader sells a call option with a strike price of ₹700 for ₹40. If the stock price is ₹680 at expiration, what is the profit?
The term “hedging” in derivatives trading refers to:
What is an index in the context of financial markets?
What is the primary focus of a stock index?
Why is the percentage change in an index more important than its numeric value?
What is one key use of a stock index for managed portfolios?
Which of the following is an example of a major Indian stock index?
What does a market capitalization weighted index consider for assigning weights?
What is the purpose of an index fund?
Which organization manages BSE indices in India?
What is a characteristic of a good market index?
What is a key feature of Exchange Traded Funds (ETFs)?
How is market capitalization calculated for a company?
In a price-weighted index, what determines a stock’s influence on the index?
What is the free-float market capitalization index based on?
In an equal-weighted index, what happens when stock prices change?
What is the bid-ask spread in the context of stock trading?
What is the ideal price in the context of impact cost?
Which of the following is a derivative contract based on an index?
What is a key consideration in index construction?
Why is index maintenance necessary?
Which index is an example of a price-weighted index?
Using the market capitalization weighted index example from the chapter, what is the index value if the current market capitalization is Rs. 42,500 lakhs and the base market capitalization is Rs. 18,800 lakhs with a base index value of 100?
In a price-weighted index with the data from the chapter (stock prices: 650, 450, 600, 350, 500), what is the current index value if the base value was 250?
What is the percentage increase in the price-weighted index if the base value is 250 and the current value is 510?
In an equal-weighted index with four stocks (P, Q, R, S) as given in the chapter, what is the new index value if the base value is 100 and the current total value is 146,000 from an initial 120,000?
What is the impact cost for buying 1500 shares if the ideal price is Rs. 9.85 and the actual buy price is Rs. 9.9333?
In the chapter’s order book example, what is the transaction cost (loss due to bid-ask spread) for buying and immediately selling 100 shares?
Why do global indices like Sensex and Nifty now use free-float market capitalization?
What happens to the risk in an index when diversifying from 50 stocks to 100 stocks?
In the equal-weighted index example, what must the fund manager do if stock P’s weight increases above 25%?
Which of the following is NOT a reason for index revision?
What is a forward contract?
What is the main purpose of entering into a forward contract?
What is a key feature of a futures contract?
What is the role of the clearing corporation in futures contracts?
What is the contract size of a Nifty futures contract if the futures price is Rs. 25,475.70 and the lot size is 25?
What does a negative basis indicate in futures markets?
What is the tick size for Nifty futures as mentioned in the chapter?
Who are hedgers in the derivatives market?
What is the expiration day for Nifty futures contracts on the NSE?
What is the primary difference between forwards and futures regarding trading?
What is a major limitation of forward contracts?
How is the initial margin for a futures contract calculated in the example provided?
What is the purpose of mark-to-market (MTM) settlement in futures?
What is the basis for a Nifty futures contract on Oct 03, 2024, if the spot price is 25,250.10 and the futures price is 25,475.70?
What is a calendar spread position in futures?
What is the final settlement price of a Nifty futures contract?
What does the Cost of Carry model assume about arbitrage opportunities?
What is the convenience yield in futures markets?
What is a long hedge in the futures market?
What is the contract cycle for Nifty futures on the NSE?
In the chapter’s example, what is the profit/loss for a long forward contract on 10 grams of gold if the forward price is Rs. 62,337 and the spot price at maturity is Rs. 62,700?
Using the Cost of Carry model, what is the fair futures price for an index with a spot price of 17,500, a cost of financing of 12%, a return of 4%, and a 3-month period (90/365 years)?
What is the MTM gain for a trader with a long Nifty futures position (lot size 25) bought at Rs. 22,250, if the closing price on the same day is Rs. 22,308.70?
In a cash and carry arbitrage, if the spot price of gold is Rs. 62,130 per 10 grams, carrying cost is Rs. 100, and the 3-month futures price is Rs. 62,280, what is the arbitrage profit per 10 grams (ignoring transaction costs)?
What is the portfolio beta if four stocks have betas of 0.5, 1.1, 1.3, and 0.9 with weights of 35%, 15%, 20%, and 30%, respectively?
How many Nifty futures contracts are needed to hedge a portfolio worth Rs. 10,00,000 with a beta of 1.2, if the Nifty futures index level is 25,000 and the lot size is 25?
What happens to the basis of a futures contract at maturity?
In the chapter’s arbitrage example, what is the total profit for a lot size of 50 if the spot price is Rs. 100, futures price is Rs. 110, and the expiration price is Rs. 108?
Why does the Cost of Carry model break down when convenience yield dominates?
What is the open interest after the trades on March 4 in the chapter’s example, where A shorts 50 contracts, C goes long 100 contracts, A closes 50, and C and D close 100 each?
What is an option contract?
What is the primary difference between a call option and a put option?
What is the option premium?
What is the main feature of a European option?
What is the contract size of a Nifty option if the lot size is 50 and the premium is Rs. 124.50?
What does it mean for an option to be in-the-money (ITM)?
What is the tick size for Nifty options as mentioned in the chapter?
What is the maximum loss for a long call option buyer?
What is the expiration day for Nifty options on the NSE?
What is the intrinsic value of an out-of-the-money (OTM) option?
What is the intrinsic value of a put option with a strike price of 18,400 and a spot price of 18,315.10?
What is the time value of a put option with a premium of Rs. 177.60 and an intrinsic value of Rs. 84.90?
What is the break-even point (BEP) for a long call option with a strike price of 17,500 and a premium of Rs. 95?
What is the maximum profit for a short put option seller with a premium of Rs. 150?
What is the final settlement price for a Nifty option contract?
What does a positive delta indicate for a call option?
What is the effect of higher volatility on option premiums?
What is the contract trading cycle for stock options on the NSE?
What is the purpose of the Black-Scholes model?
What is implied volatility?
What is the profit for a long call option with a strike price of 17,500, a premium of Rs. 95, and an index closing value of 18,000 at expiry?
What is the break-even point (BEP) for a long put option with a strike price of 17,500 and a premium of Rs. 150?
What is the return on investment (ROI) for a long call option with a strike price of 17,500, a premium of Rs. 185, and an index closing value of 17,800 at expiry?
What is the loss for a short put option seller with a strike price of 17,500, a premium of Rs. 150, and an index closing value of 17,100 at expiry?
What is the intrinsic value of a call option with a strike price of 17,300 and a spot price of 17,562?
What is the gamma of an option if a Rs. 1 increase in the underlying price changes the delta from 0.50 to 0.58?
What is the effect of an increase in interest rates on a call option’s price?
What is the maximum loss for a short call option seller if the index rises significantly above the strike price of 17,500 and the premium received is Rs. 95?
In the Black-Scholes model, what does the variable ‘v’ represent?
What is the ROI for a long put option with a strike price of 17,600, a premium of Rs. 167, and an index closing value of 17,000 at expiry?
What is the primary purpose of a long hedge using stock futures?
What is the main risk faced by an investor planning to buy shares in the future without a hedge?
In a short hedge using stock futures, what position is taken to hedge a planned future sale?
What does a bullish vertical spread using calls involve?
What is the maximum loss in a long straddle strategy?
What is the purpose of a covered call strategy?
What does a put-call ratio less than one indicate?
What is the delta of a stock futures contract approximately equal to?
What is the primary goal of delta-hedging?
What is the key characteristic of a calendar spread in futures?
In the long hedge example for ABC Ltd, if the stock price rises to Rs. 520 and the futures price is Rs. 521.20, what is the net cost per share after squaring off the futures position?
In a short hedge for PQR Ltd, if the stock price falls to Rs. 1440 and the futures price is Rs. 1441, what is the effective selling price per share?
For a portfolio with a market value of Rs. 90,00,000 and a beta of 1.3, how many index futures contracts (lot size 50, futures price 17700) are needed to hedge the systematic risk?
In a bullish vertical spread using calls with a long call at 17500 (premium Rs. 185) and a short call at 17800 (premium Rs. 61), what is the break-even point?
In a long strangle with a call strike of 6200 (premium Rs. 145) and a put strike of 6000 (premium Rs. 140), what is the maximum loss?
In a covered call strategy with a stock bought at Rs. 1590 and a call sold at 1600 (premium Rs. 10), what is the net position if the stock price falls to Rs. 1520?
What is the net gain from a cash-and-carry arbitrage on stock A with a cash price of Rs. 1500, futures price of Rs. 1550, and a fair futures price of Rs. 1534.13?
In a protective put strategy with a stock bought at Rs. 1600 and a put option at 1600 (premium Rs. 20), what is the net position if the stock price rises to Rs. 1660?
What does a rising futures price with declining open interest indicate?
In a butterfly spread using calls with strikes 6000, 6100, and 6200, what is the maximum profit if the stock price is Rs. 6100 at expiry?
In a reverse cash-and-carry arbitrage on stock B with a cash price of Rs. 100 and a futures price of Rs. 90, what is the net gain if the stock price rises to Rs. 110, including interest earned at 9% p.a. for one month?
In a calendar spread with a near-month futures price of Rs. 121.30 and a mid-month futures price of Rs. 121.50, if the stock price closes at Rs. 122 and the mid-month futures price is Rs. 122.82, what is the net gain per share?
In a bullish vertical spread using puts with a short put at 17500 (premium Rs. 125) and a long put at 17000 (premium Rs. 34), what is the break-even point?
In a long straddle with a call and put at strike 6000 (premiums Rs. 257 and Rs. 136), what are the break-even points?
In a collar strategy with a stock bought at Rs. 1590, a short call at 1600 (premium Rs. 10), and a long put at 1580 (premium Rs. 7), what is the net position if the stock price falls to Rs. 1490?
In a delta-hedging scenario, if a trader shorts 10 ATM call options (delta 0.50, lot size 50), how many futures contracts (lot size 50) are needed to achieve a delta-neutral position?
Using put-call parity, if a stock is trading at Rs. 1251, a call option (strike 1240) costs Rs. 47.50, and the interest rate is 8% p.a. for one month, what is the fair price of a put option with the same strike and expiry?
In a short strangle with a call strike of 6200 (premium Rs. 145) and a put strike of 6000 (premium Rs. 140), what are the break-even points?
In a butterfly spread using calls with strikes 6000, 6100, and 6200, what are the break-even points?
If the put-call ratio for an index options contract is 1.25, what does this indicate?
What is the primary difference between an open outcry market and an electronic market?
What type of trading platform is used for futures and options trading in India?
Who can a Trading Member trade on behalf of?
What are the trading hours for the Equity Derivatives Segment in India as permitted by SEBI?
What is the role of a Corporate Manager in the trading hierarchy?
What is a Day order in the trading system?
What is the purpose of a Stop-loss order?
What does the Market Watch window on a Trader Workstation display?
Which derivative instruments are traded in the F&O segment in India?
What is the minimum median quarter-sigma order size (MQSOS) for a stock to be eligible for derivatives trading?
What happens to an Immediate or Cancel (IOC) order if it is not matched immediately?
How are orders matched in India’s F&O platforms?
What is the role of a Professional Clearing Member (PCM)?
What is the adjustment factor for a stock split with a ratio of 2:1?
What is the purpose of the Investor Risk Reduction Access (IRRA) platform?
What happens to a stock that fails the Product Success Framework (PSF) criteria for three consecutive months?
What is the Securities Transaction Tax (STT) rate for the sale of an option in securities?
Which of the following is a component of trading costs in the equity derivatives market?
What is the minimum average daily delivery value required for a stock to be eligible for derivatives trading?
What does the Put/Call Ratio (PCR) indicate in the F&O market?
What is the adjustment factor for a bonus issue with a ratio of 3:7?
How is the notional value for an option contract calculated for open interest?
What happens to unexpired contracts in a stock that undergoes a merger and ceases to exist?
What is the minimum market-wide position limit (MWPL) for a stock to be eligible for derivatives trading?
What is the purpose of the Logging and Monitoring Mechanism (LAMA) for stock brokers?
What is the minimum percentage of trading members required to trade in a stock derivative under the Product Success Framework (PSF)?
How is the strike price adjusted for an extraordinary dividend above 2% of the market value?
What is the cooling-off period for re-introducing an index excluded from derivatives trading?
What is the impact cost in the context of trading costs?
What is the benefit per share (E) for a rights issue where A=100 existing shares, B=50 rights entitlement, P=Rs 200 (underlying close price), and S=Rs 150 (issue price)?
What is the role of the Clearing Corporation in the F&O segment?
Which type of clearing member clears and settles only their own trades?
What is the minimum net-worth requirement for a Clearing Member who clears and settles only their own deals?
What is the purpose of a Clearing Bank in the F&O segment?
What does the Mark-to-Market (MTM) settlement process involve?
What type of settlement is used for index futures and options in India?
What is the purpose of the Investor Protection Fund?
What is the minimum deposit required by a Clearing Member to the Clearing Corporation?
What is the final settlement price for futures contracts based on?
What is the primary objective of the Core Settlement Guarantee Fund (SGF)?
How is the open position of a Trading Member calculated?
What is the benefit of interoperability among clearing corporations?
How is the daily MTM settlement for futures contracts settled?
What happens to in-the-money (ITM) stock options on the expiry day?
What is the purpose of the SPAN system in the F&O segment?
What is the exercise settlement value for a call option with a strike price of Rs. 500, lot size of 1000, and a closing price of Rs. 520?
What is the purpose of the peak margin obligation introduced by SEBI?
What is the delivery margin percentage levied on Expiry - 4 EOD for potential ITM long option positions?
What is the client-level position limit for futures and options on individual securities?
What is the purpose of the margin pledge mechanism introduced by SEBI?
How is the Intraday Crystallised Losses (ICMTM) calculated?
What is the settlement obligation for a client with a short position in a stock futures contract (lot size 1500, final settlement price Rs. 450, previous day’s settlement price Rs. 460)?
What happens when the aggregate open interest of a security exceeds 95% of the Market-Wide Position Limit (MWPL)?
What is the final exercise settlement value for a put option with a strike price of Rs. 600, lot size of 1000, and a closing price of Rs. 580?
What is the purpose of the Net Option Value in the margining system?
What is the penalty for non-fulfillment of initial margin obligations by a clearing member?
How does the net settlement mechanism benefit clients on the expiry of stock derivatives?
What is the trading member-wise position limit for equity index futures contracts?
What is the requirement for brokers under the new pledge/repledge mechanism for client securities?
What is one of the cyber resiliency goals of the Cyber Security & Cyber Resilience Framework (CSCRF)?
Which act governs the trading of securities in India?
What is the primary aim of the Securities Contracts (Regulation) Act, 1956?
According to the SCRA, 1956, which of the following is included in the definition of ‘securities’?
What is one of the main functions of SEBI under the SEBI Act, 1992?
What is the minimum number of members required for a derivatives exchange as per the L.C. Gupta committee recommendations?
What is the minimum net worth requirement for a clearing member in the derivatives segment?
What document must a derivatives broker provide to clients to inform them about trading risks?
What is the minimum contract value for derivatives as prescribed by SEBI effective November 20, 2024?
Who can grant recognition to a stock exchange under the SCRA, 1956?
What is the purpose of the Trade Guarantee Fund (TGF)?
Under the SCRA, 1956, when are derivative contracts considered legal and valid?
What is one of the powers of SEBI under the SEBI Act, 1992?
What is the maximum representation of trading/clearing members in the governing council of a derivatives exchange?
How is the net worth of a clearing member calculated as per SEBI guidelines?
What happens when a Trading Member reaches their position limit in the derivatives segment?
What is the minimum liquid net worth requirement for a clearing member in the derivatives segment?
What is a requirement for trading members in the derivatives segment?
What action can SEBI take if a stock broker violates the conditions of registration?
What is the composition of the cash component in collateral deposits for F&O segment members?
What is one of the responsibilities of the Clearing Corporation in the F&O segment?
What is a non-allowable asset when calculating the net worth of a clearing member?
What action must a stock exchange take if trading is disrupted due to an outage and does not resume within 1 hour before scheduled market closure?
What happens in the case of a default by a Trading Member as per the Standard Operating Procedure (SOP)?
What is the consequence of a clearing member failing to meet margin obligations?
What is the requirement for the liquid assets of a clearing member in the F&O segment?
What must a stock exchange do within 15 minutes of a trading outage?
What is the purpose of the annual inspection of member brokers in the derivatives segment?
What happens if a client exceeds their position limit in the derivatives segment?
What is the minimum net worth requirement for a self-clearing member in the derivatives segment?
What report must a derivatives segment of a stock exchange provide to SEBI regarding risk management?
How is the premium or discount on a forward contract for hedging treated?
What account is debited when a client pays initial margin for equity index futures?
What is the Securities Transaction Tax (STT) rate for the sale of a futures contract in securities?
Under which head is the balance in the 'Initial Margin - Equity Index/Equity Stock Futures Account' shown in the balance sheet?
How are gains or losses from derivative transactions on recognized stock exchanges taxed?
What is the accounting treatment for a client’s payment of Mark-to-Market (MTM) margin?
What is the STT rate for the sale of an option in securities?
What happens to the initial margin when an equity index futures contract is settled?
How is the premium paid by the buyer of an equity index option recorded?
What is the maximum period for carrying forward losses from derivative transactions?
How is a provision for loss on equity index futures handled at the balance sheet date?
What is the accounting entry when a client receives Mark-to-Market margin?
How is the profit or loss on squaring off an equity index futures contract calculated?
What is the tax treatment for gains from derivatives transactions for Foreign Portfolio Investors (FPIs)?
What is the accounting treatment for a buyer of a call option at final settlement if exercised?
What is the STT payable by the clearing member in the F&O segment?
How is the provision for loss on open equity index options calculated for the buyer at the balance sheet date?
What happens to the margin paid for an equity index option when it is exercised?
What is the tax benefit under the presumptive scheme of taxation for F&O trading under Section 44AD?
What disclosure is required for equity index futures contracts at the year-end?
What is the accounting entry for a client default in making Mark-to-Market margin payment?
How is the profit or loss calculated for squaring off multiple equity index futures contracts with the same series?
What is the STT rate for a delivery-based equity transaction resulting from a derivative contract?
How is the provision for loss on equity stock options calculated for the seller at the balance sheet date?
What is the accounting treatment for a buyer of a call option exercised with delivery settlement?
What is the tax implication for losses from derivative transactions if the income tax return is not filed on time?
How is the STT calculated for an option contract that is exercised?
What is the accounting entry when a provision for loss on equity index futures is reduced due to a lower anticipated loss?
What is the maximum turnover limit for applying the presumptive scheme of taxation under Section 44AD for F&O trading?
What disclosure is required for equity stock options at the year-end if initial margin is paid via bank guarantee?
What is the primary responsibility of financial institutions in the context of sales practices?
What should investors be cautious about when offered 'high return' or 'risk-free' investments?
What is the purpose of the Risk Disclosure Document in derivatives trading?
What is 'churning' in the context of securities trading?
What is one of the key risks specific to option buyers?
What time restrictions apply to sales agents making calls to customers?
What is one of the main risks in trading equity derivatives?
What is a requirement for brokers under the Anti-Money Laundering (AML) procedures?
What is the purpose of the SEBI Complaints Redress System (SCORES)?
What is one of the 'Do's' for investors in the securities market?
What should a financial advisor consider when assessing a client’s risk tolerance?
What is a key feature of the Online Dispute Resolution (ODR) Portal?
What is one of the specific risks faced by option sellers?
What is a requirement for brokers under the SEBI study on F&O trading risks?
What is an example of a suspicious transaction under Anti-Money Laundering (AML) regulations?
What is a key component of the Customer Due Diligence (CDD) process?
What type of grievance can be addressed through the ODR Portal?
What is a key 'Don’t' for investors in the securities market?
What is the role of the Investor Grievance Division (IGD) of a stock exchange?
What is a requirement for brokers regarding client Profit and Loss data?
What happens if a client’s grievance is not resolved through conciliation on the ODR Portal within 21 days?
What is a specific risk of trading in futures contracts during volatile market periods?
What is a requirement for intermediaries under the Prevention of Money Laundering Act (PMLA)?
What is one of the SEBI Risk Disclosure facts based on the 2021-22 F&O trading study?
What is a key document required for KYC of a partnership firm?
What action must a broker take if a client’s identity cannot be verified during the KYC process?
What is the time limit for a market participant to resolve a complaint received through SCORES?
What is a characteristic of clients classified as Clients of Special Categories (CSC)?
What is the purpose of mapping a client’s Unique Client Code (UCC) with their demat account?
What happens if a market participant does not comply with an arbitral award within 3 months and no stay is granted?
A trader has bought 100 shares of XYZ at Rs 780 per share. He expects the price to go up but wants to protect himself if the price falls. He does not want to lose more than Rs. 1000 on this long position in XYZ. What should the trader do?
A trader has bought 100 shares of XYZ at Rs 780 per share. He expects the price to go up but wants to protect himself if the price falls. He does not want to lose more than Rs. 1000 on this long position in XYZ. What should the trader do?
A trader has bought 100 shares of XYZ at Rs 780 per share. He expects the price to go up but wants to protect himself if the price falls. He does not want to lose more than Rs. 1000 on this long position in XYZ. What should the trader do?
An index option is a __________________.
The purchase of a share in one market and the simultaneous sale in a different market to benefit from price differentials is known as ____________.
Financial derivatives provide the facility for __________.
Operational risks include losses due to ____________.
State whether TRUE or FALSE: Impact cost is low when the liquidity in the system is poor.
Which of the following costs is not actually paid by the market participants but arises due to lack of liquidity?
You sold one XYZ Stock Futures contract at Rs. 278 and the lot size is 1,200. What is your profit (+) or loss (-), if you purchase the contract back at Rs. 265?
You have taken a short position of one contract in June XYZ futures (contract multiplier 50) at a price of Rs. 3,400. When you closed this position after a few days, you realized that you made a profit of Rs. 10,000. Which of the following closing actions would have enabled you to generate this profit? (You may ignore brokerage costs.)
A calendar spread contract in index futures attracts ___________.
Margins in 'Futures' trading are to be paid by _______.
When the near leg of the calendar spread transaction on index futures expires, the farther leg becomes a regular open position.
The buyer of an option cannot lose more than the option premium paid.
A European call option gives the buyer the right but not the obligation to buy from the seller an underlying at the prevailing market price 'on or before' the expiry date.
An in-the-money option is _____________.
An option with a delta of 0.5 will increase in value approximately by how much, if the underlying share price increases by Rs 2?
If an investor buys a call option with lower strike price and sells another call option with higher strike price, both on the same underlying share and same expiration date, the strategy is called ___________.
Which of the following is a hedged position?
Put-call parity refers to the relationship between: ________.
Which of the following situations indicates a bullish trend in the underlying?
On the derivative exchanges, all the orders entered on the Trading System are at prices exclusive of brokerage.
A trader has bought 100 shares of XYZ at Rs 780 per share. He expects the price to go up but wants to protect himself if the price falls. He does not want to lose more than Rs. 1000 on this long position in XYZ. What should the trader do?
Trader A wants to sell 20 contracts of August series at Rs 4500 and Trader B wants to sell 17 contracts of September series at Rs 4550. Lot size is 50 for both these contracts. The Initial Margin is fixed at 6%. How much Initial Margin is required to be collected from both these investors (sum of initial margins of A and B) by the broker?
A member has two clients C1 and C2. C1 has purchased 800 contracts and C2 has sold 900 contracts in August XYZ futures series. What is the outstanding liability (open position) of the member towards Clearing Corporation in number of contracts?
Clients' positions cannot be netted off against each other while calculating initial margin on the derivatives segment.
Mark-to-market margins are collected ___________.
Value-at-risk measures ___________.
On the Governing Council of the Clearing Corporation of the derivatives segment, broker-members are allowed.
The main objective of Trade Guarantee Fund (TGF) at the exchanges is _________________.
A penalty or suspension of registration of a stock broker from derivatives exchange/segment under the SEBI (Stock Broker) Regulations, 1992 can take place if _______________.
A defaulting member's clients’ positions could be transferred to ____________ by the Clearing Corporation.
Profits from derivatives transactions for Indian investors are taxed as: __________.
In the case of Foreign Portfolio Investors (FPIs), the gains or losses arising from derivatives transactions on a recognized stock exchange are taxable as:
When establishing a relationship with a new client, the trading member takes reasonable steps to assess the background, genuineness, beneficial identity, financial soundness of such person and his investment/trading objectives.
In the KYC process, Politically Exposed Persons are termed as:
_________ is allotted on client onboarding and serves as an exclusive identification of the client.
Under the Anti-Money Laundering (AML) and Combating of Financial Terrorism (CFT) regulations, suspicious transactions must be reported to ___________.
SCORES is: __________.
What is a derivative?
When was the first exchange-traded derivative contract listed in the US?
What is a swap in the context of derivatives?
What does high liquidity in the stock market imply?
What is the impact cost in the context of stock markets?
Which index is a price-weighted index?
What is the primary purpose of an Exchange Traded Fund (ETF)?
What is a forward contract?
What distinguishes a futures contract from a forward contract?
What is the primary risk faced by an option seller?
What is an in-the-money (ITM) call option?
What is the maximum loss for an option buyer?
What does the delta of an option measure?
What is implied volatility in the context of options?
What is a bull call spread strategy?
What is the maximum profit in a bull call spread?
What is a protective put strategy used for?
What is the payoff profile of a protective put similar to?
What does a put-call ratio (PCR) greater than 1 indicate?
What is the trading time for the derivatives segment as per SEBI regulations?
What is a day order in the derivatives trading system?
What is the STT rate for the sale of an option in securities?
What is the role of a clearing member in the derivatives market?
What does the Value-at-Risk (VaR) measure in the context of derivatives?
What is the purpose of the Trade Guarantee Fund (TGF)?
How are profits from derivatives transactions taxed for Indian investors?
What is the purpose of the Risk Disclosure Document (RDD)?
What is a key requirement under the Prevention of Money Laundering Act (PMLA) for intermediaries?
What is SCORES in the context of investor protection?
Which body regulates the securities market in India?
What is the purpose of the L. C. Gupta committee recommendations?
What is the open interest in a futures contract?
What is the break-even point (BEP) for a long call option with a strike price of 17500 and premium of Rs. 95?
What is a calendar spread in futures trading?
What is the maximum loss in a short straddle strategy?
What is the purpose of a butterfly spread?
What is the adjustment factor for a stock split with a ratio of 2:1?
What is the primary function of a clearing corporation?
What is the final settlement price for index options in India?
What is the purpose of initial margin in derivatives trading?
What is a covered call strategy?
What is the maximum profit in a covered call strategy?
What is the primary risk in a long futures position?
What is the fair futures price formula?
What is the convenience yield in the context of commodities?
What is the primary purpose of index futures?
What is the lot size in the context of futures contracts?
What is the purpose of the Investor Risk Reduction Access (IRRA) platform?
What is the beta of a portfolio?
What does a high PCR indicate in the options market?
What is the role of a trading member in the derivatives market?
What is the purpose of daily MTM settlement in futures?
What is the maximum profit for a short put option?
What is the purpose of algorithmic trading?
What is the final settlement procedure for physically settled futures?
What is the minimum net worth required for a trading member in the derivatives segment?
What is the purpose of the KYC process in derivatives trading?
What is the maximum loss for a long straddle strategy?
What is the purpose of the SEBI Complaints Redress System (SCORES)?
What is the intrinsic value of an in-the-money call option with a spot price of 17562 and strike price of 17300?
What is the time value of a put option with a premium of Rs. 177.60 and intrinsic value of Rs. 84.90?
What is the break-even point for a long put option with a strike price of 17500 and premium of Rs. 150?
What is the purpose of a reverse cash and carry arbitrage?
What is the role of the clearing corporation in derivatives trading?
What is the purpose of the Product Success Framework (PSF) for stock derivatives?
What is the adjustment factor for a bonus issue with a ratio of 1:2?
What is the primary risk for an option buyer?
What is the purpose of the binomial pricing model for options?
What is the gamma of an option?
What is the purpose of the open interest in derivatives?
What is the tax treatment for losses from speculative derivatives transactions?
What is the purpose of the Investor Grievance Redressal Mechanism?
What is the maximum profit for a short call option?
What is the purpose of a delta-neutral portfolio?
What is the role of a sub-broker in the derivatives market?
What is the purpose of the peak margin obligation introduced by SEBI?
What is the maximum loss for a short put option?
What is the purpose of the daily premium settlement for options?
What is the purpose of the e-KYC process in derivatives trading?
What is the purpose of the Securities Transaction Tax (STT)?
What is the primary purpose of the J. R. Varma committee?
What is the intrinsic value of an out-of-the-money option?
What is the purpose of a bearish vertical spread using puts?
What is the role of the clearing bank in derivatives trading?
What is the purpose of the put-call parity principle?
What is the maximum profit for a long put option?
What is the purpose of the extreme loss margin on expiry day?
What is the accounting treatment for initial margin paid on equity futures?
What is the purpose of the Online Dispute Resolution (ODR) Portal?
What is the maximum loss for a butterfly spread?
What is the purpose of the Short Option Minimum Charge?
What is the primary purpose of the free float market capitalization index?
What is the role of the Index Committee in derivatives trading?
Who are the primary participants in the derivatives market?
What is a swap in the context of derivatives?
What is the primary risk faced by an option seller?
What is implied volatility in the context of options?
What is the STT rate for the sale of an option in securities?
What is a collar strategy?
What is the purpose of the Securities Transaction Tax (STT)?