Unit ko samjho · NISM Series VIII
Trading Mechanism
11 questions is unit mein
Sawaal aur jawaab English mein hain, kyunki NISM ka exam paper bhi English mein hota hai.
Is unit mein kya hai
- For NSE equity derivatives contracts with expiry falling on or after 1 September 2025, the revised expiry day is generally:
- If the scheduled Tuesday expiry of an NSE equity-derivatives contract is a trading holiday, the contract generally expires on:
- As of October 2026, what are the regular trading-session hours for NSE’s equity-derivatives segment?
- A trader is short a futures contract at 1,000 and wants a stop-loss buy order that activates if the market rises to 1,025. What is the role of the 1,025 trigger?
- A trader submits an Immediate or Cancel (IOC) order for 1,000 units. Only 650 units can be executed immediately at acceptable prices. What happens to the remaining 350 units?
- What is the main objective when an exchange adjusts derivative contract terms for a corporate action such as a stock split or bonus issue?
- For a simplified 1-for-2 stock split illustration, an option has strike ₹1,000 and market lot 500 shares immediately before the adjustment. If the exchange applies the usual value-preserving split factor so price terms halve and quantity terms double, what adjusted pair is consistent with that logic?
- Which statement correctly distinguishes Securities Transaction Tax (STT) from brokerage in an F&O trade?
- Which description best captures algorithmic trading in the context of exchange markets?
- A trader wants strike-wise option premium, bid/ask information, volume and open interest for listed index options. Which exchange data view is most directly suited to this purpose?
- As of October 2026, which statement about SEBI's Investor Risk Reduction Access (IRRA) platform is current?
Zaroori ideas
Practice bank se · 1
For NSE equity derivatives contracts with expiry falling on or after 1 September 2025, the revised expiry day is generally:
NSE shifted the relevant index and stock derivative expiries to Tuesday for contracts expiring on or after 1 September 2025. Monthly contracts therefore generally expire on the last Tuesday of the period, while applicable weekly NIFTY options expire on Tuesday of the expiry week. Remember: Expiry-day rules are exchange-specific and date-sensitive. NSE’s applicable equity-derivatives expiry day is now Tuesday.
Hint Common mistake: Relying on the long-standing Thursday convention after the 2025 change.
VIII-059Practice bank se · 2
If the scheduled Tuesday expiry of an NSE equity-derivatives contract is a trading holiday, the contract generally expires on:
NSE contract specifications state that if the scheduled Tuesday expiry is a trading holiday, the expiry is moved to the previous trading day. Remember: Holiday adjustment for NSE equity-derivatives expiry is backward to the previous trading day.
Hint Common mistake: Assuming expiry moves forward to the next trading day as some other deadlines might.
VIII-060Practice bank se · 3
As of October 2026, what are the regular trading-session hours for NSE’s equity-derivatives segment?
NSE currently lists the equity-derivatives regular/normal market session as opening at 09:15 and closing at 15:40. A separate pre-open session for eligible futures operates before the regular session. Remember: Current NSE equity-derivatives normal market: 09:15–15:40. Do not confuse it with cash-market or pre-open timings.
Hint Common mistake: Using the familiar 15:30 cash-market close without checking the current derivatives schedule.
VIII-061Practice bank se · 4
A trader is short a futures contract at 1,000 and wants a stop-loss buy order that activates if the market rises to 1,025. What is the role of the 1,025 trigger?
A stop-loss order remains inactive until its trigger condition is reached. For a short position, a buy stop above the current market can be used to limit loss if price rises. The trigger activates the order. It does not guarantee an exact execution price, particularly in fast markets. Remember: Stop-loss trigger activates an order. It is not necessarily the guaranteed execution price.
Hint Common mistake: Treating trigger price and fill price as identical.
VIII-062Practice bank se · 5
A trader submits an Immediate or Cancel (IOC) order for 1,000 units. Only 650 units can be executed immediately at acceptable prices. What happens to the remaining 350 units?
An IOC order attempts immediate execution. Any portion that cannot be executed immediately is cancelled rather than resting in the order book. Remember: IOC = execute immediately to the extent possible. Cancel the balance.
Hint Common mistake: Assuming “immediate” means the full quantity must execute or the whole order fails. Partial execution can occur.
VIII-063Practice bank se · 6
What is the main objective when an exchange adjusts derivative contract terms for a corporate action such as a stock split or bonus issue?
Corporate-action adjustments are designed so that, as far as practicable, the economic value of open derivative positions is preserved across the ex-date. Depending on the action, prices, market lots/positions or other contract terms may be adjusted. Remember: Corporate-action adjustments are intended to remove mechanical windfalls/losses, not market risk.
Hint Common mistake: Thinking a split or bonus itself should create derivative profit because the quoted share price changes.
VIII-137Practice bank se · 7
For a simplified 1-for-2 stock split illustration, an option has strike ₹1,000 and market lot 500 shares immediately before the adjustment. If the exchange applies the usual value-preserving split factor so price terms halve and quantity terms double, what adjusted pair is consistent with that logic?
In a 1-for-2 split, each old share becomes two shares and the per-share price is mechanically halved, other things equal. A value-preserving derivative adjustment therefore approximately halves the strike and doubles the : ₹1,000 → ₹500 and 500 → 1,000. Remember: For a simple split, strike and lot move in opposite directions to preserve economic exposure.
Hint Common mistake: Changing strike but forgetting the corresponding position/lot adjustment.
VIII-138Practice bank se · 8
Which statement correctly distinguishes Securities Transaction Tax (STT) from brokerage in an F&O trade?
is imposed by law on specified securities transactions at prescribed rates and bases. Brokerage is the broker's service charge, subject to the applicable regulatory/exchange framework and the broker's pricing. STT can arise even on a losing trade because it is transaction-based. Remember: Trading costs include multiple distinct components. Know which are statutory taxes and which are service/exchange charges.
Hint Common mistake: Combining every line item on the contract note into a single 'brokerage' charge.
VIII-139Practice bank se · 9
Which description best captures algorithmic trading in the context of exchange markets?
Algorithmic trading uses computerised rules/logic to automate aspects of order generation and execution. Automation can improve speed or consistency, but it does not guarantee profit and remains subject to the applicable exchange, broker and regulatory controls. Remember: Automation changes how orders are generated/executed, not whether market risk exists.
Hint Common mistake: Equating algorithmic trading with guaranteed or risk-free trading.
VIII-140Practice bank se · 10
A trader wants strike-wise option premium, bid/ask information, volume and open interest for listed index options. Which exchange data view is most directly suited to this purpose?
An exchange organises listed option information by expiry and strike and commonly displays fields such as prices/quotes, and . It is a direct source for analysing listed option contracts. Remember: Use exchange-derived F&O data for contract-level market analysis rather than unrelated secondary documents.
Hint Common mistake: Treating commentary or a chart screenshot as equivalent to the underlying exchange data.
VIII-141Practice bank se · 11
As of October 2026, which statement about SEBI's Investor Risk Reduction Access (IRRA) platform is current?
SEBI issued a circular on 7 May 2026 discontinuing the IRRA platform after citing strengthened business-continuity and resilience arrangements in the market ecosystem. This is a time-sensitive current-status fact and should be reverified if used in a later exam-preparation edition. Remember: Operational infrastructure can change. Current exam content should not preserve an obsolete platform status uncritically.
Hint Common mistake: Learning an older workbook reference to IRRA without checking later SEBI circulars.
VIII-142Expiry day is the last day on which a derivative contract can be traded.
Aage padhoThe strike price is the level at which an option can be exercised.
Aage padhoLot size is the number of units of the underlying that one derivatives contract stands for.
Aage padhoSecurities Transaction Tax (STT) is a statutory tax the Government of India levies on purchases and sales of securities.
Aage padhoAn option chain is the table of every listed strike for one underlying and one expiry.
Aage padhoTraded volume is the quantity that changed hands during a set period.
Aage padhoOpen Interest (OI) is the number of futures or options contracts in the NSE F&O segment that are still open.
Aage padho