CCM Derivatives study guide
CCM Derivatives · Work through your exam, one topic at a time.
The CCM Derivatives credential is a specialist examination for treasury and cash-management professionals who need to understand, measure and control an organisation's exposure to interest rates, foreign exchange and commodity prices. It suits cash managers, treasury analysts, assistant treasurers and finance staff who already handle liquidity and funding and are moving into hedging and risk oversight. The CCM Derivatives study guide has 7 sections and about 1,992 words.
01Derivatives Fundamentals and Market Structure
A derivative is a contract whose value derives from an underlying rate, price, index, or event. Candidates must distinguish forwards (bilateral, customizable, no upfront premium, linear payoff), futures (exchange-traded, standardized, cleared, margined daily, marked to market), options (asymmetric payoff, premium paid upfront, buyer has a right not obligation), and swaps (series of cash-flow exchanges, typically netted).
286 words, about 1 min02Interest Rate Risk and Hedging Instruments
Interest rate risk includes repricing risk , yield curve risk , basis risk , and option risk . Candidates must know the main hedging instruments: interest rate swaps (fixed-for-floating), FRAs , interest rate futures (e.g., Eurodollar/SOFR-style contracts), caps, floors, and collars , and swaptions .
313 words, about 2 min03Foreign Exchange Risk Management
FX exposure comes in three forms: transaction (known future cash flows in foreign currency), translation (accounting conversion of foreign subsidiaries), and economic/operating (competitive impact of rate moves). Hedging tools include forwards , futures , options , FX swaps , cross-currency swaps , and natural hedges (matching revenue and costs in the same currency).
286 words, about 1 min04Commodity and Other Price Risk Exposures
Commodity risk includes price risk , basis risk , storage/carry cost , convenience yield , and seasonality . Hedging instruments include futures , forwards , swaps , options , and collars .
286 words, about 1 min05Counterparty and Credit Risk Management
Counterparty credit risk is the risk that a derivative counterparty defaults before settlement. Key measures: current exposure (mark-to-market), potential future exposure (PFE) , credit valuation adjustment (CVA) , wrong-way risk , and settlement risk .
282 words, about 1 min06Accounting, Valuation and Disclosure for Derivatives
Derivatives are recognized on the balance sheet at fair value . Under typical standards (e.g., ASC 815 / IFRS 9), candidates must know hedge accounting categories: fair value hedges , cash flow hedges , and net investment hedges .
270 words, about 1 min07Derivatives Policy, Controls and Compliance
A robust derivatives program rests on a board-approved policy covering objectives, authorized instruments, limits, and prohibited activities. Key controls include segregation of duties (front, middle, and back office), independent valuation , limit monitoring , counterparty approval , and reconciliation .
269 words, about 1 min