Series XIII
Common Derivatives
50 questionsPass mark 60%Negative marking 25% / wrong answer
NISM Series XIII practice questions
150 questions. Each answer is explained.
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Learn these topics
Practise one unit at a time
- Basics of Derivatives (Equity, Currency and Interest Rate)6 questions
- Introduction to the Underlying Markets24 questions
- Introduction to Forwards and Futures20 questions
- Strategies Using Futures24 questions
- Introduction to Options – Options on Equities and Currencies22 questions
- Option Trading Strategies – Strategies using Equity Options and Currency options4 questions
- Introduction to Trading, Clearing, Settlement & Risk Management25 questions
- Legal and Regulatory Environment14 questions
- Accounting and Taxation of Derivatives6 questions
- Sales Practices, Code of Conduct and Investor Protection Measures5 questions
Exam format
| Questions | 150 · 1 mark each |
|---|---|
| Duration | 180 min · 3 hours |
| Pass mark | 60% · 90 of 150 marks |
| Negative marking | 25% · 0.25 marks off per wrong answer |
| Certificate validity | 3 years · from the date of the examination |
NISM Series XIII Common Derivatives
Exam rules read on NISM's site on 17 October 2026. Check the current rules on NISM's site (opens in a new tab)
What these answers assume, and when it was last checked
Each question uses the rules listed below. We last checked them on 5 September 2026. A Budget or SEBI circular can change a rate, lot size or expiry day. If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.
- NSE uses Tuesday expiry and BSE uses Thursday expiry. This applies from 1 September 2025.
- The January 2026 index lot sizes are NIFTY 65, BANKNIFTY 30, FINNIFTY 60, MIDCPNIFTY 120 and NIFTYNXT50 25.
- The October 2024 SEBI framework sets a minimum index contract value of Rs 15–20 lakh. Each exchange may list one weekly benchmark index.
- Option buyers pay the premium upfront from 1 February 2025. A short index option has an extra 2% Extreme Loss Margin on expiry day from 20 November 2024.
- Equity short-term capital gains are taxed at 20%. Long-term gains are taxed at 12.5% above Rs 1.25 lakh. Both rates apply from 23 July 2024.
- F&O income is non-speculative business income in ITR-3. NSE equity derivatives trade from 9:15 a.m. to 3:40 p.m.
- The final ten-minute session began on 3 August 2026. It aligns with the cash market Closing Auction Session.
- Most Securities Transaction Tax questions test the base and who pays. On an option sale, it is the premium and the seller pays. On a futures sale, it is the traded value and the seller pays.
- On exercise, Securities Transaction Tax uses intrinsic value: settlement price minus strike price. The buyer pays it.
- Two questions test the current rate. From 1 April 2026, option sales carry 0.15% on the premium and futures sales carry 0.05% on traded price. The earlier rates were 0.10% and 0.02% from 1 October 2024.
- This section uses the T+1 rolling settlement cycle. Obligations are fixed on T+1. A short delivery goes to buy-in auction on T+1 and settles on T+2.
- The trade-for-trade surveillance segment uses direct close-out. Funds pay in by 10:30 a.m. and pay out on or after 1:30 p.m. on settlement day.
- Securities pay in to the settlement pool by 10:30 a.m. They pay out directly to the client’s demat account by 3:30 p.m.
- The 3:30 p.m. deadline replaced 1:30 p.m. under SEBI’s 10 October 2024 circular. Direct client credit was required by SEBI’s 5 June 2024 circular.
- The optional T+0 cycle trades until 1:30 p.m. Obligations are fixed by 2:30 p.m. on the trade day. An early pay-in shortage is closed out directly.
- Cash-market Value at Risk margin is six times exponentially weighted moving-average volatility. It has a 9% floor for Group I, a 21.5% floor for Group II, and a fixed 50% or 75% level for Group III.
- Extreme Loss Margin is 3.5% for a share and 2% for a broad-market-index exchange traded fund. Mark-to-market margin is collected before the next day’s trading. The trade-for-trade segment has 100% upfront margin.
- Close-out uses the higher of the highest price from trade day to auction day and 20% above the auction day’s official close.
- A funds shortage costs 0.07% a day. The trading facility is withdrawn at a shortage of Rs 5 lakh or more.
- SCORES allows 21 calendar days, then two 15-day review levels. Online Dispute Resolution moves from conciliation to arbitration after the market participant and SCORES steps.
- At NSE, the Investor Protection Fund limit is Rs 35 lakh per investor for each defaulting or expelled member. This applies to claims arising after 13 August 2024.
- A Basic Services Demat Account has no annual maintenance charge up to Rs 4 lakh of holdings. It costs up to Rs 100 above that, until the Rs 10 lakh eligibility ceiling. These slabs apply from 1 September 2024.
- The rupee pairs are USD-INR, EUR-INR, GBP-INR and JPY-INR. The cross-currency pairs are EUR-USD, GBP-USD and USD-JPY.
- Each contract covers 1,000 units of the foreign currency, except JPY-INR. JPY-INR covers 100,000 yen and is quoted in rupees per 100 yen.
- The tick is 0.25 paise, or Rs 0.0025. It equals Rs 2.50 a contract.
- Rupee pairs trade from 9:00 a.m. to 5:00 p.m. A monthly contract stops trading at 12:30 p.m. two working days before the expiry month’s last business day.
- Final settlement is in cash at the FBIL reference rate on expiry day. FBIL, Financial Benchmarks India, has published this rate in place of the Reserve Bank since 2018. Premium-style European options are quoted in rupees. The buyer pays the premium in cash on T+1.
- Daily settlement is on T+1 and final settlement is on T+2.
- NSE Clearing circular 026/2020 sets SPAN margin plus Extreme Loss Margin. The futures margin is 0.50% for USD-INR, 0.15% for EUR-INR, 0.25% for GBP-INR and 0.35% for JPY-INR. A short option has 0.75%. These figures apply from 1 June 2020.
- A USD-INR client may hold 6% of total open interest or USD 20 million, whichever is higher. A trading member may hold 15% or USD 100 million.
- A resident user has one USD 100 million equivalent limit across all rupee pairs and exchanges. No document is needed below that limit, but a valid underlying contracted exposure must still exist. This clarification applies from 3 May 2024.
- The currency segment has no Securities Transaction Tax.
The exam figures (questions, time, pass mark, negative marking and certificate validity) come from NISM's own pages, read on 17 October 2026. Timed practice uses the same figures. Study with the official workbook as well.
The written-out answers on this page are hidden while your timed set runs.
5 sample questions with answers
The other 145 are on the unit pages above, written out the same way.
Q1An importer expects to pay US dollars in three months. Which action most directly addresses rupee depreciation risk?
Option A. Buying extra equity shares today
Why it is wrong: Equity shares do not directly hedge the dollar payment.
Option B. Ignoring the future currency liability
Why it is wrong: Ignoring exposure leaves exchange-rate risk open.
Option C. Selling a fixed-rate corporate bond
Why it is wrong: Selling a bond does not directly offset a currency liability.
Option D. Locking an appropriate future exchange rate — Correct answer
Answer: D. Locking a suitable exchange rate can reduce the importer's uncertainty about the rupee cost. Remember: Match a hedge to the exposure being hedged.
Hint, shown before you answer in practice mode: Common mistake: The direction of the foreign-currency obligation matters. Identify the exposure created by a dollar payment.
XIII-004mediumapplication
Q2A currency futures contract represents USD 1,000. Its quoted price rises by ₹0.40 per dollar. What is the long position's gain?
Option A. ₹40
Why it is wrong: ₹40 understates the contract quantity.
Option B. ₹4,000
Why it is wrong: ₹4,000 moves the decimal one place.
Option C. ₹400 — Correct answer
Option D. USD 400
Why it is wrong: USD 400 uses the wrong profit currency.
Answer: C. Gain in rupees = 1,000 × ₹0.40 = ₹400. Remember: Currency futures payoff uses the contract's quotation units.
Hint, shown before you answer in practice mode: Common mistake: Check whether profit is expressed in rupees or dollars. Scale the rupee movement by the dollar quantity.
XIII-041mediumnumerical
Q3A call is bought for ₹8 with strike ₹100. What expiry underlying price gives zero profit before costs?
Option A. ₹108 — Correct answer
Option B. ₹92
Why it is wrong: ₹92 subtracts the premium instead of adding it.
Option C. ₹100
Why it is wrong: ₹100 ignores the paid premium.
Option D. ₹116
Why it is wrong: ₹116 counts the premium twice.
Answer: A. Long call break-even = ₹100 + ₹8 = ₹108. Remember: Long call break-even is above strike by premium.
Hint, shown before you answer in practice mode: Common mistake: At-the-money expiry does not repay a call premium. Account for strike and paid premium.
XIII-086mediumnumerical
Q4When a new futures buyer trades with a new futures seller, what normally happens to open interest?
Option A. It increases by one contract — Correct answer
Option B. It decreases by two contracts
Why it is wrong: Two new openings do not reduce outstanding contracts.
Option C. It stays unchanged in every case
Why it is wrong: Open interest can increase when both sides open.
Option D. It becomes equal to twice the trade volume
Why it is wrong: One contract contributes once, not once per side.
Answer: A. One newly opened long matched with one newly opened short creates one additional outstanding contract. Remember: Open interest counts contracts, not both counterparties separately.
Hint, shown before you answer in practice mode: Common mistake: Never double count the long and short sides of one contract. Consider whether both sides create outstanding positions.
XIII-113mediumconceptual
Q5Under the Income-tax Act, 2025, how are qualifying exchange-traded securities-derivative transactions generally classified?
Option A. They are excluded from the definition of speculative transactions — Correct answer
Option B. They are always treated as untaxed gifts
Why it is wrong: Derivative trading profits are not automatically gifts.
Option C. They are automatically exempt from all income tax
Why it is wrong: The exception does not exempt all income from tax.
Option D. They are always speculative regardless of how they are traded
Why it is wrong: Qualifying exchange trades receive an express exception.
Answer: A. Section 66(31), read with section 66(33) of the Income-tax Act, 2025, excludes qualifying specified derivative transactions from speculative transactions. Remember: Tax classification depends on statutory eligibility criteria.
Hint, shown before you answer in practice mode: Common mistake: Non-speculative does not mean tax-free. Look for the statutory exception for eligible exchange transactions.
XIII-143mediumregulatory
NISM Series XIII practice: common questions
Are these the real NISM Series XIII exam questions?
No. LearnNifty wrote every question from NISM's public syllabus. NISM does not publish its question bank, so nobody can offer you the real paper. Use these questions to check that an idea has gone in. Use the official NISM workbook to see what is examined.
How many practice questions are there for NISM Series XIII?
150 at the moment, across 10 practice topics, with one page per unit. It is a practice set, not a copy of the paper: the real NISM-Series-XIII: Common Derivatives Certification Examination has 150 questions.
Where are all the questions and answers?
On the 10 practice topics listed above. There are 5 in full. Each unit's page has the rest, with all four options, the correct answer and why each other option is wrong.
Does negative marking apply to NISM Series XIII?
Yes. NISM takes off 25% of a question's marks for a wrong answer. On a 1-mark question that is 0.25 marks off. A blank question earns nothing and loses nothing, so a wrong guess costs marks on this paper. Timed practice here uses the same rule.
How do I book the NISM Series XIII exam?
You register and pay on NISM's own website, nism.ac.in. The steps and the fee change from time to time, so read them there on the day you book.
Are these practice questions kept up to date?
Each question is written against the rules printed on this page, last checked on 5 September 2026. A Budget or a SEBI circular can change a rate, a lot size or an expiry day. If one of those rules changes before your exam, treat the questions that use it as out of date. Then check NISM's current workbook.
See the exam these questions follow
The Common Derivatives exam page shows the question count, the time, the pass mark and the marking rule.
Open the NISM Series XIII exam pagePaper Trading Try it on the practice trading desk