Introduction to Derivatives – Definition of derivatives products – participants in derivatives market, economic forever of derivatives market.

Index Derivatives – Index number – economic significance of index movements – types of Indices – desirable attributes of an index – Derivatives in NIFTY and SENSEX.

Forward contracts - Limitations of forward markets – futures – Distinction between Future and Forward contracts – Futures terminitory options – Options terminitory, call options and Put option.

Payoff for buyer (long futures) of futures – pay off for seller (short futures) of futures– Hedging, speculation and arbitrage – Options pay off – pay off profit for buyer of call options– pay off profit for writer of call options. Hedging and speculation in options.

Evolution of Commodity Markets – Commodity markets in India – New York Mercantile Exchange- London Metal Exchange, Chicago Board of Trades –Tokyo Commodity Exchange, Chicago Mercantile Exchange.