I. Fixed-income or Debt Securities – Introduction

  • Financial Markets: Overview
  • Debt/ Fixed-income Securities : Introduction
  • Debt/ Fixed-income Securities : Classification
  • Fixed-income Securities vs. Fixed-return Securities
  • Debt Securities vs. Equity Securities
  • Relative Size of Debt and Equity Markets: Globally and in India

II. Interest Rate – Introduction

  • Concept of Interest Rate
  • Risk-free Interest Rate vs. Risky Rate
  • Term Structure of Rates: Shapes
  • Term Structure of Rates: Shifts
  • Conversion of Rate into Amount
  • Accrued Interest

III. Return and Risk Measures for Debt Securities

  • Return Measure: Spot Rate
  • Coupon, Current Yield and Yield-To-Maturity
  • Spot rate, Bond price and YTM
  • Risk Measures

IV. Interest Rate Derivatives

  • Derivatives: Definition and Economic Role
  • Interest Rate Derivatives
  • Over-The-Counter (OTC) vs. Exchange-Traded Derivatives
  • Derivatives Market in India

V. Contract Specification for Interest Rate Derivatives

  • Underlying Assets of Permissible Interest Rate Derivative Contracts in India
  • Market Lot / Contract Amount
  • Contract Months, Expiry Dates and Last Trading Day of Exchange Traded Derivatives
  • Price Quotation and Tick
  • Daily Settlement Price
  • Final Settlement Price
  • Delivery Aspects of Interest Rate Derivatives Contracts

VI. Trading, Clearing, Settlement and Risk Management

  • Operational Guidelines of Exchanges
  • Order Types and Execution
  • Spread Orders
  • Margining and Mark-To-Market (MTM)
  • Clearing and Settlement
  • Procedure for Delivery 

VII. Regulations and compliance

  • Role of Various Regulators in Bond and Interest Rate Derivatives Market
  • Restrictions and Limits Applicable to Resident and Non-resident Investors
  • List the Regulatory Reporting Requirements
  • Accounting Aspects of Interest Rate Derivatives

VIII. Trading and Hedging

  • Speculative / Trading Strategies
  • Hedging Strategies
  • Basis Risk, Yield Curve Spread Risk and Market Liquidity Risk