Definition and characteristics of derivatives; Types of derivatives – forwards, futures, options, and swaps; Importance of derivatives in financial markets; Participants in derivative markets; Benefits and risks of derivatives; Evolution of derivatives markets in India and globally.

Futures and forward contracts – features, differences, pricing; Margins and settlement process; Trading strategies using futures; Index futures, commodity futures, interest rate futures; Role of clearing houses in futures markets; Hedging strategies using futures.

Types of options – call and put, American and European options; Options trading strategies; Intrinsic value and time value of options; Put-call parity; Binomial option pricing model; Black-Scholes option pricing model; Option Greeks and their applications.

Types of swaps – interest rate swaps, currency swaps, credit default swaps; Valuation of swaps; Applications of swaps in risk management; Use of derivatives in hedging, speculation, and arbitrage; Credit derivatives and structured finance products.

Regulatory framework for derivatives markets – SEBI, RBI, and international regulations; Trading mechanisms and settlement procedures; Impact of derivatives on financial stability; Algorithmic trading and derivatives; Cryptocurrency derivatives; Recent developments in derivatives markets.