CIRO Derivatives Exam study plan

Build a one-page map of derivative instrument types (forwards, futures, options, swaps) and where each trades, so you can state the market structure for any product on demand

Calculate intrinsic value and time value for calls and puts from given spot, strike, and premium figures without notes

Derive and apply put-call parity to identify arbitrage mispricing in three worked examples

Explain in writing how exchange-traded versus OTC structure changes counterparty exposure and price transparency

Compute payoff and profit at expiry for long/short calls, puts, and covered combinations across at least five price scenarios each

Apply the binomial one-period pricing logic step by step and reconcile the result against a no-arbitrage argument

Identify the five inputs to an option pricing model and predict the direction of price change when each input moves

Describe futures contract specification elements (underlying, size, tick, delivery, settlement) and explain how each affects trading

Trace the full lifecycle of a futures trade from order entry through matching, clearing, and final settlement

Calculate mark-to-market variation margin flows across a multi-day price path for a long and a short position

Distinguish the roles of broker, exchange, and central counterparty, and state who bears which risk at each step

Explain basis, contango, and backwardation and compute basis for given cash and futures prices

Compute initial margin, maintenance margin, and the margin call amount for long and short futures positions

Explain how collateral is posted, valued, and haircut, and identify which asset classes qualify under typical rules

Describe the mechanics of a central counterparty default waterfall from member margin through to the default fund

Analyze a counterparty exposure scenario and recommend netting, collateral, or clearing mitigants with reasoning

Design a hedge for a specified cash-market exposure using futures, and calculate the hedge ratio and resulting residual basis risk

Evaluate a hedge using options and compare cost, protection floor, and upside forgone against the futures alternative

Compute and interpret delta, gamma, theta, vega, and rho for a given position and state how each changes as expiry approaches

Identify when a hedge should be adjusted or unwound and justify the trigger conditions in writing

Summarize the core regulatory objectives for derivatives markets, including market integrity, transparency, and reduction of systemic risk

Map reporting, recordkeeping, and business-conduct obligations to the parties responsible for each

Explain how position limits and large-trader reporting interact with a hedging strategy and when an exemption may apply

Apply a hedging exemption or position-limit rule to a scenario and state whether the proposed position complies

Conduct a suitability assessment for three client profiles with different objectives, risk tolerance, and experience, and match each to appropriate or inappropriate products

Draft the key risk disclosures that must precede a recommendation of a leveraged or option-selling strategy

Identify conduct failures in written sales scenarios, including misrepresentation, inappropriate recommendation, and inadequate disclosure

Explain conflicts of interest and the controls expected when advising on derivatives

Complete two full-length timed practice exams under exam conditions and record the score by domain

Re-teach the three weakest domains from your own notes without referring to source material

Drill every missed calculation type until you can reproduce the method from memory

Build a one-page formula and rule sheet covering margin, parity, hedge ratio, and key conduct obligations