NISM Series VIII: Equity Derivatives is the certificate SEBI requires for people who deal in equity futures and options on behalf of a broker's clients. After NISM V-A, it is one of the two most popular NISM exams. Many of my students take V-A first and VIII next, and some sit for VIII under real time pressure because a job offer depends on it.
This guide covers who needs it, the exam pattern, where the marks are, what happens on exam day, and how to prepare.
#Who needs NISM VIII
NISM designed the exam for associated persons who work as approved users and sales personnel of a trading member (a stockbroker) in the equity derivatives segment. In practice, that means:
- dealers and terminal operators who place F&O orders for clients,
- sales and relationship staff at brokers who deal with derivatives clients,
- students and job seekers aiming for these roles, often after NISM V-A.
#What NISM VIII is not
Some people take this exam hoping it will teach them to trade derivatives for quick profits. It won't, and that's not its purpose. NISM VIII is a minimum qualification to work in the securities market, not a trading course. It does teach the basic pillars (how futures and options are priced, settled and margined), and that understanding helps even if you trade on your own. But passing it is not a strategy for making money in F&O.
#NISM VIII exam pattern
| Parameter | Details |
|---|---|
| Questions | 100 multiple-choice questions, 1 mark each |
| Duration | 2 hours |
| Pass mark | 60% (60 out of 100) |
| Negative marking | 25%: each wrong answer deducts 0.25 marks |
| Fee | ₹1,500 plus payment gateway charges, as listed on NISM's exam page |
| Certificate validity | 3 years |
| Where | NISM test centres |
#Don't fear the negative marking
Many candidates are scared of the 0.25-mark penalty and leave questions blank. The math says otherwise. A right answer earns a full mark and a wrong one costs only a quarter, so guessing pays on average, and it pays more when there are fewer options to choose from:
| Question type | Average value of a guess |
|---|---|
| 4 options, none eliminated | +0.06 marks |
| 3 options (or 4 with one eliminated) | +0.17 marks |
| 2 options or True/False (or 4 with two eliminated) | +0.375 marks |
Some NISM VIII questions have only two or three options, or are True/False. Never leave those blank. The rule is simple: eliminate what you can, then answer every question.
This is an average over many guesses, not a guarantee for one question. Also, it applies to a genuinely random choice among the remaining options; if your “eliminated” options are actually plausible and your final pick is biased toward an attractive wrong answer, the real expected value can be lower than the table suggests.
#Syllabus and chapter-wise marks
| # | Chapter | Marks |
|---|---|---|
| 1 | Basics of Derivatives | 10 |
| 2 | Understanding the Index | 5 |
| 3 | Forwards and Futures | 20 |
| 4 | Options | 20 |
| 5 | Strategies using Equity Futures and Equity Options | 10 |
| 6 | Trading Mechanism | 10 |
| 7 | Clearing, Settlement and Risk Management | 10 |
| 8 | Legal and Regulatory Environment | 5 |
| 9 | Accounting and Taxation | 5 |
| 10 | Sales Practices and Investor Protection Services | 5 |
Forwards and Futures and Options together carry 40 marks. Master them first. But don't make the mistake many candidates make of neglecting Clearing, Settlement and Risk Management: it carries 10 marks, as much as Basics of Derivatives, and it's mostly rules you can learn rather than calculations. The first five chapters carry a weightage of 65%, and the content you are learning in these 5 chapters will almost never change. The remaining five chapters carry 35% weightage and, depending on latest rules, regulations, laws and bylaws, there may be change in the content. So focusing on the first five chapters and learning those topics in depth will help you not only in this examination but also in your work, since these concepts stay the same.
#Where students struggle
From my live training sessions, the same few areas trip people up every batch:
- Forwards vs futures. They sound alike, and students mix up which one is exchange-traded, standardised and marked to market daily (futures) and which is a private, customised contract (forwards).
- Long call, short call, long put, short put. These are counter-intuitive. "Buying a put" means you profit when the price falls, and "selling a call" means you take on an obligation. That is not how we normally think of buy and sell.
- Cost of carry calculations. Students skip practising them, then put the brackets in the wrong place when calculating a futures fair value. See our NISM VIII formula and payoff sheet.
- Payoff questions with traps. Missing "two lots" (sometimes written in words), or missing that the position was sold, gives an answer with the right number but the wrong sign.
Our study plan for NISM VIII is built around these.
#Study material
NISM's workbook is free to view and download from its study material page after entering basic contact details; you don't need to register for the exam first. Printed copies are sold by Taxmann. Use the current version: lot sizes and contract rules change, and the exam follows the current workbook.
#How to register
- Create an account on the NISM certification portal with your PAN. The certificate is issued in the name as per your PAN, and only to candidates whose PAN is in their registration.
- NISM verifies your details and usually approves your profile within 2–3 working days. You can book an exam only after that.
- Choose NISM-Series-VIII: Equity Derivatives Certification Examination, pick a test centre and date, and pay the fee online.
#On exam day
- Report 30 minutes before your slot. Late candidates are not allowed in.
- Carry your admit card (printed or soft copy) and one original photo ID: PAN card, Aadhaar, driving licence or passport, or a DigiLocker copy of one of these.
- Only a pen or pencil and a calculator go into the test area. You can take your own non-financial calculator; an on-screen calculator is available, and workstations have Microsoft Excel or LibreOffice Calc. For VIII this matters: practise calculations both by hand and in a spreadsheet, so you can do a cost of carry or payoff one way and cross-check it the other.
- Dress formal, semi-formal or business casual. Centres can refuse entry otherwise.
- Think a question is wrong? Fill in the re-evaluation form from the invigilator before you leave.
#Result and certificate
You get a provisional certificate (mark sheet) at the end of the exam. The final certificate is a soft copy you download from NISM's portal, issued within 15 working days (often sooner). The PDF's password is your PAN in capital letters. It is valid for three years from the exam date.
If you don't pass, you can book again straight away, with no waiting period, but you pay the full fee each time.
#NISM VIII and NISM V-D
If you are a mutual fund distributor, you don't need NISM VIII to distribute Specialized Investment Funds: NISM V-D includes equity derivatives (and interest rate derivatives) inside its own syllabus. See our NISM V-D Complete Guide. NISM VIII is the certificate for broking-side derivatives roles.
