DCPP. DGCX Commodity Professional Program

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1 DCPP DGCX Commodity Professional Program

2 DGCX Commodity Professional Program Inside Introduction Reference Material Contents Program Fees Terms and Conditions How to Register? Examination Procedures Contact Details

3 Introduction DGCX Commodity Professional Program (DCPP) is the certification course of Dubai Gold and Commodities Exchange (DGCX) for those wanting to pursue a career in Commodity derivatives markets. DCPP serves as a valuable introduction and reference tool for new participants in the derivatives industry and other financial service industry professionals who need to build market knowledge. This Certification Program of the Exchange is designed to gear up professionals in the commodity market with sufficient domain knowledge of the subject. It is equipped with the necessary information and inputs so as to enable the participants to get well versed with the modalities of the commodity markets in this region such as regulatory framework, trading, clearing and settlement and delivery procedures and the scope of commodity markets. The Grading of candidates as per their respective scores is as follows: i. 90% and above GRADE <A+> ii. 80% to less than 90% GRADE <A> iii. 70% to less than 80% GRADE <B+> iv. 60% to less than 70% GRADE <B> v. 50% to less than 60% GRADE <C> vi. Below 50% FAIL An online exam is conducted at the approved exam center of the Exchange. It consists of 50 questions from all chapters of the Reference material worth 1, 2 and 3 marks. All questions are of objective type and have to be completed in 90 minutes. Incorrect answers will attract a negative marking of The candidate has to score at least 50% marks in order to pass the exam. The certification is valid for a period of 3 years from the date of issue. 1 2

4 Reference Material Contents Chapter 1 - Evolution of Commodity Derivatives Definition and evolution of commodity derivatives How are commodities traded? - Spot, Futures & OTC markets Economic benefits of commodity futures markets Difference between spot and commodity futures markets Need for a world class commodity derivatives exchange in UAE DGCX - product profile and key shareholders Some of the world's major commodity exchanges Chapter 2 - Evolution of Commodity Derivatives Gold Silver Fuel Oil Currency futures Steel Chapter 3 - Forex Market History of foreign exchange market What are exchange rates? Currency exchange rate quoting convention Broad features of different FX markets - OTC - Spot, Forward & Futures How is currencies trading different from trading other commodities & stocks? Currency forward contracts versus DGCX futures contracts Market participants in forex Understanding currency futures contracts listed on DGCX Specification for Euro, GBP, Yen & Indian rupee contracts Going long / short, offsetting positions & final settlement Forward currency pricing Interpreting futures rates - Premium, Discount and Flat Futures market rates and Interest Rate Parity Forward points Cross currency quotes Calculating bid & ask cross rates Chapter 4 - Commodity Futures What are Derivatives? - Definition of Forward, Futures, Options & Swaps Difference between Futures and Forward contracts Difference between Commodity futures and Stocks Commodity futures contract Basic characteristics The Economic Role of Commodity futures Pricing Commodity Futures Convenience yield, Basis, Spreads, Contango and Backwardation Intra commodity spreads, Inter commodity spreads and Hedge ratio Commodity market participants - Hedgers, Speculators & Arbitrageurs 3 4

5 Chapter 5 - Trading Strategies using Commodity Futures Hedging, long hedge & short hedge Hedging and Basis risk Rolling over a hedge position Advantages and limitations of hedging Speculation - going long and going short Spread trading Arbitrage Cash and carry arbitrage Reverse cash and carry arbitrage Arbitrage between different commodity markets Chapter 6 - Options What is an Option? Two basic types of options - the Call and the Put Terminology to remember - Premium, Strike/Exercise price, Exercise date, Assignment, Expiration date, American and European options Distinction between Futures and Options contracts Moniness Concept - In-the money; At-the-money; Out-of-the-money Option premium components - Intrinsic value and Time value How are DGCX gold options traded? Reading option prices Factors influencing option premium Option Greeks Option pricing through mathematical models Put-Call Parity Exiting an option position - Offsetting, Exercising & Letting options expire Why use options? Contract specifications for options on gold futures Chapter 7 - Trading Strategies Using Options Selecting an option trade; how much to buy? Long put Married put Protective put Short call Covered call Short put Option Spreads -Vertical or Price spreads & Horizontal or Calendar spreads Bull Spreads - Bull call spread & Bull put spread Bear Spreads - Bear call spread & Bear put spread Calendar Spread - long calendar spread & short calendar spread Diagonal spreads Straddles - long straddle & short straddle Strangle - long strangle & short strangle Butterfly - long butterfly & short butterfly Condor - long condor & short condor Ratio Spreads Call ratio spreads - long call ratio spread & short call ratio spread Put ratio spreads - long put ratio spread & short put ratio spread 5 6

6 Chapter 8 - Exchange Functioning Trading - order matching rules & order conditions Clearing Settlement Types of settlements - Daily - T+1settlement & Final settlement Tender period and delivery period Clearing and Settlement of funds DGCX risk management system - real time mark-to-market loss monitoring Position limit; daily mark-to-market; daily price range SPAN methodology for risk management Clearing member commitment Payment of margins - Initial & mark-to-market margin Special margin & Delivery margin Hypothetical examples of computation of different margins Open position and delivery period Daily settlement of funds Determination of margin by brokers, maximum allowable open position Order placement on behalf of members Know Your Customer / Client (KYC) Risk Disclosure Document Chapter 10 - Analysis and Price forecasting Fundamental analysis Analyzing agricultural Commodities Fundamental analysis of Gold Fundamental analysis of Silver Fundamental analysis of Copper Analyzing currency markets Technical Analysis Different types of charts Using various tools - trend lines Supports and Resistances Price patterns Gaps Volume & Open Interest Trend following indicators - Moving Averages Trend leading indicators - Oscillators System trading & discipline Chapter 9 - Regulatory Structure of DGCX The first regulatory layer DGCX By-Laws An overview Second regulatory layer - SCA Regulations - A brief overview Member Client Agreement Money Laundering 7 8

7 Program Fees candidate has to register for the DCPP Self-Study course. DGCX Commodities Professional Program - Self-study Course 1. Fees for DCPP Self-study course is AED 1200/-, which is inclusive of examination & reference material fees only. Fees once paid will not be refunded. 2. The candidate must appear for the online exam within 3 months of registration for the DCPP Self-study course. Terms and Conditions: How to Register Payment Details: A Demand Draft (DD)/ Telegraphic Transfer (TT) of amount AED-1200/- (One thousand two hundred only) against DCPP Self-study course. The DD should be drawn in favor of Dubai Gold and Commodities Exchange payable at Dubai. Those opting to pay by telegraphic transfer may remit the payment as per the under mentioned details: Bank: EmiratesNBD Post Box 777 Dubai, United Arab Emirates. 1. In case, a candidate does not appear for the online exam within 3 months of registration, he/she can take the exam by paying an additional fee of AED 400/- towards exam fees. Candidates reappearing for the exam will not be provided with the reference material for the second time. 2. If a candidate wishes to reappear for the exam for the purpose of increasing his/her grades, an extra fee of AED 400/- towards exam fees has to be paid. 3. The online exam will be conducted at the designated Test Centers only. Account Name: IBAN: Currency: Swift Code: Dubai Gold and Commodities Exchange DMCC AE AED (UAE Dirhams) EBILAEAD days of completion of the exam and will be couriered to the address given in the registration form. 9 10

8 Mail: Print the downloadable registration form. Mail the completely filled registration form along with a Demand Draft (DD) drawn in favor of Dubai Gold and Commodities Exchange payable at Dubai or a copy of bank advice evidencing payment through TT. In addition, kindly mention your name and DGCX Commodity Professional Program (DCPP) on the reverse of the Draft. Also, send two recent passport size color photographs along with the completed registration form. Mailing Address: Dubai Gold and Commodities Exchange Training Department P. O. Box: Emaar Business Park, Bldg No. 2, Level 1, Sheikh Zayed Road (Near Interchange 5), DUBAI. P: ; F Confirmation: On confirmation of your registration for the Self-Study course, a letter of registration and reference material will be sent to you by courier within one week. Cancellation: Registration once confirmed cannot be cancelled and the payment will not be refunded. No Show: In case a candidate fails to show up for the examination after taking an examination date, his registration will stand to be cancelled. In order to reappear again, he will have to pay a sum of AED 400/- as reappearing examination fee. Rescheduling of exam date: A candidate who wishes to reschedule his examination date to any other date can do so by informing the Training department at least 3 days in advance. Only one such request to reschedule the examination dates will be accommodated. However, if a candidate still fails to show up on the rescheduled date, then his registration will stand to be cancelled. In order to reappear again, he will have to pay a sum of AED 400/- towards reappearing examination fee. Examination Procedures 1. Once registered, the candidates will be given an Exam Admit Card containing a test ID to appear for the exam. 2. Candidates must apply for an exam date and time at the designated Exam Center at least one week in advance. 3. Candidates are requested to be present at the Exam Center at least 30 minutes prior to the exam. 4. Use of calculators is permitted and candidates are requested to carry their own calculators for the exam. 5. Candidates will have to produce the Exam Centre head with the Photo Identity proof. 6. Mobile phones will not be allowed inside the 11 12

9 Examination room. 7. In case, a candidate is found using any unfair means during the Exam, he/she will be expelled from the Exam and the decision of the DGCX official will be final. 8. The exam consists of 50 objective type questions worth 1, 2 and 3 marks which have to be completed within 90 minutes. 9. Any wrong answer will attract negative marking. The marking is based on the following: a. Right answer will be awarded full marks (1,2 or 3 marks) Contact Details Training & Exam Center Dubai Gold and Commodities Exchange Emaar Business Park, Bldg No. 2, Level 1, Sheikh Zayed Road (Near Interchange 5), Dubai, United Arab Emirates Phone: Fax: Website: b. Wrong answer will attract negative marking of 0.25 c. Un-attempted answer will not attract any marking 13 14

10 Dubai Gold & Commodities Exchange P.O.Box 37736, Sheikh Zayed Road Dubai, United Arab Emirates Tel.: , Fax:

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