Certified Futures Trader

The Certified Futures Trader is a course developed to Evaluate a candidate as per the organization’s requirements and skill accordingly. This certification program will educate a candidate in different areas in future market basics, VaR pricing of futures contracts, investment assets, stochastic interest rates, hedging, short term interest rate futures contracts, t-bills, long term interest rate futures, foreign exchange futures, and stock index features.

Why become a Certified Future Trader

This course is designed for professionals and Graduates who want to gain good roles and positions in their respective niche. An employee who is already working can also attempt this certification exam, it will open the doors of employment opportunities and result in earning potential.

Who should take this certification?

Individuals who are looking for Job in options and future trading departments of different companies. Graduates who wish to improve their skills and make their CV’s stronger this certification will give them more opportunities in their career. Employees looking for a better role, through this certification a candidate can add value to their skills.

Roles and responsibilities of a Certified Futures Trader

The first step is to analyze and take the details about the task that a practitioner undertakes after Getting qualified for the particular examination. Below is the list of duties that a Certified Futures Trader undertakes.

To collect information on securities, market conditions, government regulations and financial circumstances of customers
To elucidate data from securities reports, financial periodicals and stock-quotation viewer screens.
To make proper analysis of financial markets and financial market products.
To Give information and offer advice on financial market matters and market conditions, as well as the history and prospects of corporations.
To undertake and execute buying and selling orders in the marketplace on behalf of clients.
To predict futures prices and market changes, and bidding for commodity futures contracts.
To keep record and transmit buy and sell orders.

Career as a Futures Trader

As a financial trader, you’ll purchase and sell stocks, bonds, and other assets for individual and institutional clients. You’ll establish pricing and deals in order to maximize assets or reduce financial risk. When it comes to futures trading, there’s more to it than meets the eye. Let us know about Career as a Futures Trader!

Benefits of taking Vskills Certification

Vskills being India’s largest certification provider gives candidates access to top exams as well as provides after exam benefits. This includes:

The certifications will have a Government verification tag.
The Certification is valid for life.
Candidates will get lifelong e-learning access.
Access to free Practice Tests.
Candidates will get tagged as ‘Vskills Certified’ On Monsterindia.com and Shine.com

Exam Details

Exam Duration: 60 minutes
Vskills Exam Code: VS-1137
Number of questions: 50
Maximum marks: 50
Passing marks: 25 (50%)
Exam Mode: Online
There is NO negative marking in this module.

Course Details

The Certified Futures Trader exam covers the following topics –

Introduction

Forward Contracts versus Futures Contracts
Type of Assets Underlying Futures Contracts
Futures Exchanges
Types of Assets Underlying Options Contracts
Options Exchanges
Hedgers, Speculators, and Arbitrageurs
The Role of Futures and Options Markets
Reasons for the Rapid Growth of Derivative Markets
The Recent Indian Story in Derivatives
Electronic Exchanges: The State-of-the-Art

Fundamentals of Futures Markets

Standardization of Futures Contracts
Margins and Marking to Market: General Principles
Spot-Futures Convergence at Expiration
Trading: General Principles
Value at Risk (VaR)
VaR in the Context of Futures Trading in India
Types of Members and the Margining System in India
Types of Orders
Liquidating a Futures Position
Trading Volume versus Open Interest
Conversion Factors When There are Multiple Deliverable Grades
Single Stock Futures

Pricing of Futures Contracts

Notation
Assumptions
Forward Contract on a Security That Provides No Income
Forward Contracts on Assets That Provide a Known Dividend Yield
Forward Contracts on Commodities
Investment Assets
Consumption Assets
Calendar Spreads and Arbitrage
Net Carry
‘Backwardation’ and ‘Contango’
Delivery Options
Imperfect Markets
Synthetic Securities
Forward Price versus Futures Prices
Stochastic Interest Rates
Quasi- Arbitrage
Risk and Futures Prices

Hedging

A Selling Hedge
A Buying Hedge
Lifting a Hedge Prior to the Expiration of the Futures Contract
Basis Risk
Selecting a Futures Contract
A Rolling Hedge
The Hedge Ratio
Estimating the Hedge Ratio
Tailing a Hedge
Quantity Uncertainty
Rationale for Hedging
Hedging Processing Margins
Developing Derivative Exchanges Key Issues

Short -Term Interest Rate Futures

Eurodollars
T-bills
Yields
T-bill Futures
The No-Arbitrage Pricing Condition
Risk Management Using T-bill Futures
Shortening T-bill Maturities
Lengthening T-bill Maturities
Risk Management Using Chained Hedge Ratios
Introduction to Eurodollar Futures
Calculating Profits and Losses on ED Futures
Bundles and Packs
Locking in a Borrowing Rate
Cash and Carry Arbitrage
Reverse Cash and Carry Arbitrage
The No-Arbitrage Pricing Equation
Hedging Rates for Periods Not Equal to Days
Creating a Fixed Rate Loan
Strip versus Stack Hedges
The TED Spread

Long-Term Interest Rate Futures

Fundamentals of Bond Valuation
Duration
The Cash Market
The Futures Market
Conversion Factors
Calculating the Invoice Price for a T-bond
The Cheapest to Deliver Bond
Arbitrage or Risk Arbitrage?
Seller’s Options
Hedging

Foreign Exchange Futures

Purchase and Sale
The Spot Market
Arbitrage
The Forward Market
Merchant Rates and Exchange Margins
The No-Arbitrage Forward Price
One Way Arbitrage
The Relationship Between Interest Rate Parity and One-Way Arbitrage
Options Forwards
Modification of Forward Contracts
Futures Markets
Hedging an Export Transaction
Hedging an Import Transaction
Creating Synthetic Investments
Borrowing Funds Abroad
Creating Synthetic Futures Contracts
Creating Synthetic Futures Contracts
Creating Synthetic Short-Term Interest Rate Contracts
Forward Covered Interest Arbitrage

Stock Index Futures

Price Weighted Indices
Value Weighted Indices
Equally Weighted Indices
Forming Portfolios to Mimic an Index
Portfolio Re-Balancing
Re-balancing an Equally Weighted Portfolio
Changing the Base Period Capitulation
Pricing of Index Futures
Cash and Carry Arbitrage
Reverse Cash and Carry Arbitrage
The No-Arbitrage Equation
Index Arbitrage and Programme Trading
Hedging with Index Futures
Market Timing with Index Futures
Using Index Futures to Change the Beta of a Portfolio
Stock Picking
Portfolio Insurance
Index Futures and Stock Market Volatility
Index Futures in India

Preparation Guide for Vskills Certified Futures Trader

Study guide improves comprehension and helps a candidate to follow an organized pattern for studying before examination. It also enables a candidate to understand concepts and resources clearly. This preparation guide consists of the resources that will guide you and prepare you to do better for the exam.

Certified Futures Trader Preparation Guide

Step 1 – Review Exam Objectives

Exam objectives/ syllabus are a significant resource under the preparation guide. It is the first step in the preparation and it is to analyze the syllabus and topics that a candidate will study during this certification program.

Introduction to Futures Trading
Fundamentals of Futures Markets
Pricing of Futures Contracts
Hedging
Short Term Interest Rate Futures
Long Term Interest Rate Futures
Foreign Exchange Futures
Stock Index Futures

Refer: Certified Futures Trader Brochure

Step 2 – Learning with Books

Books are our main source of guidance during any preparation for any examination. It is the prime source of knowledge that consists of all important concepts for beginners in an intelligible manner. All topics are explained in detail and a book is an easy to access source. The top 3 for this certification exam is given below.

Future 101 by Richard E. Waldron. This book is known for its not so technical future trading concepts mentioned in it. The book is just completely designed for beginners in future trading.
Standing out in Futures Trading by Mark J. Powers. The standing out in future trading is the sixth edition. It is written by a serious spectator of the domain. This book will highlight key points like brokers and how to choose nuances of placing different order types and the importance of stock indices.
Fundamentals of Future Market by Donna Kline. The writer of this book is a reporter and she has given some important knowledge and details of Fundamentals of the Futures market and fundamental aspects of the futures markets.

Step 3 – E-learning and Study material

Online learning is all about flexibility and self-paced learning. If a candidate wants to gain more knowledge through different online learning platforms to explore more content, e-learning gives you the best knowledge and updated one as well. It makes the information comprehensible and easy to access. Study materials are the new form of notes, which are already created by the masters of the particular niche so that the candidates get quality notes to refer to. Vskills offers you its E-Learning Study Material and its hard copy as well, to supplement your learning experience and exam preparation. Moreover, this online learning material is available for a lifetime and is updated regularly.

Refer: Certified Futures Trader Sample Chapter

Step 4 – Check your Progress with Practice Tests

Practice Tests are essential to create your own exam taking endurance. The more a candidate practices, the easier it gets for you to attempt the real examination as you get the experience through the practice tests. Attempting practice tests will help you attain the questions swiftly and learn the quirks of the exam. The practice tests will help you realize what you know and what you don’t from the syllabus and how much are you ready for the exam.