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NISM Series I: Currency Derivatives exam preparation
Currency markets, forwards, futures and options on USD-INR and other pairs, strategies, trading, settlement, regulation and tax.
NISM Series I exam pattern
NISM Series I syllabus, unit by unit
The exam covers 10 units. The percentage is the share of questions each unit usually carries, so spend your time in that proportion.
Unit 1 Introduction to currency markets10%
Exchange rates, quotes and how the foreign exchange market works.
- Quotes and cross rates.
- Spot market and participants.
- Exchange rate regimes.
Unit 2 Foreign exchange derivatives5%
Forwards, swaps and the basics of pricing and hedging.
- Forward contracts and pricing.
- Swaps and NDFs.
- OTC versus exchange traded.
Unit 3 Exchange traded currency futures20%
The core of the exam. Contract specifications, pricing, profit and loss, and hedging with futures.
- Contract specs.
- Futures pricing.
- Daily profit and loss.
- Hedging and speculation.
Unit 4 Exchange traded currency options20%
Option terminology, payoffs, premium, and factors affecting option value.
- Calls and puts.
- Payoff and break-even.
- Intrinsic value and time value.
- Greeks in outline.
Unit 5 Strategies using exchange traded currency derivatives10%
Combining futures and options to hedge or speculate.
- Spreads and straddles.
- Covered positions.
- Hedging strategies.
Unit 6 Trading mechanism10%
How orders are placed and matched on the exchange.
- Trading system and hours.
- Orders and matching.
- Price limits.
Unit 7 Clearing, settlement and risk management10%
Margins, daily settlement and the guarantee of the clearing corporation.
- Margin types.
- Daily and final settlement.
- Clearing corporation.
Unit 8 Regulatory framework5%
The authorities and rules that govern currency derivatives.
- RBI and SEBI roles.
- FEMA.
- Eligibility and limits.
Unit 9 Accounting and taxation5%
How gains from currency derivatives are treated for accounting and tax.
- Taxation of gains.
- Accounting treatment.
Unit 10 Codes of conduct and investor protection5%
Ethical duties of intermediaries and the safeguards for investors.
- Code of conduct.
- Investor protection.
Try 4 sample questions
These are from Mock 1. Open the free mock to see the correct answer and the reason behind each one.
Q1. Which statement best describes “Record maintenance”?
- A long put's payoff is the greater of zero and strike minus spot, less premium paid.
- The premium is the price paid by the buyer to the seller of the option, and is the buyer's maximum loss.
- Traders should maintain contract notes, margin statements and ledgers to substantiate returns.
- Turnover from derivatives is computed on the basis of the absolute sum of profits and losses, with audit rules based on thresholds.
Q2. Which statement best describes “Final settlement”?
- An exporter with a dollar receivable can sell futures or buy a put to protect against dollar depreciation.
- At expiry open positions are settled in cash at the final settlement price and the contract ceases.
- Modifying client codes after trade is restricted and subject to penalties, to prevent misuse.
- Products should match the client's needs and understanding, and mis-selling is a violation.
Q3. Which term is described here? A calendar spread involves buying one expiry and selling another, profiting from changes in the price gap.
- Spread trading
- Currency swap
- RBI role
- Margin call
Q4. Which term is described here? Greater expected volatility increases the chance of large moves and hence raises option premiums.
- Confidentiality
- Volatility and premium
- Forward rate formula
- Daily mark-to-market
How to prepare for NISM Series I
- Download the study guide and read the first three pages.
- Study the biggest units first. Their weight shows on this page.
- Take Mock 1 after one pass through the guide.
- Move to the next mock only when you clear the pass mark by 15 marks.
- Redo every wrong answer. Each one names its unit.
The app also lists your weak units after each mock and runs in English, Hindi or Gujarati. Mock tests and study material are in English.
Frequently asked questions
How many questions are there in NISM Series I?
The NISM Series I (Currency Derivatives) exam has 100 multiple-choice questions carrying 100 marks, to be answered in 120 minutes.
What is the passing score for NISM Series I?
The pass mark is 60%. Aim to clear 75% in practice mocks before you book the real exam.
Is there negative marking in NISM Series I?
Yes. The negative marking is 25% of marks. Practise leaving a question blank when you are unsure.
Is the NISM Series I study guide free?
Yes. UpperCrust Academy gives a free 37-page study guide PDF for NISM Series I, written unit by unit.
Are the NISM Series I mock tests free?
Yes. You get 5 full-length mock tests with the answer and the reason for every question. Sign in once with your mobile number or Google to start.
Is this affiliated with NISM?
No. UpperCrust Academy is independent preparation material from UpperCrust Wealth. Confirm the latest syllabus and exam rules on the official NISM website.
More NISM exams
UpperCrust Academy is independent study material from UpperCrust Wealth. It is not affiliated with NISM, SEBI or AMFI. For education only. Not investment advice. Always confirm the latest syllabus and rules on the official NISM website.