NZX Derivatives Adviser study plan

Map the NZ regulatory perimeter for derivatives advice, distinguishing the roles of the FMA, NZX, and the relevant licensing and conduct regimes, and write a one-page comparison table from memory.

Define each core derivative product type (forwards, futures, options, swaps) and state for each the obligation created, the cash-flow timing, and one worked numeric payoff example.

Explain the difference between exchange-traded and OTC derivatives in terms of counterparty exposure, standardisation, and disclosure obligations.

Build a glossary of 40 exam-relevant terms with a precise one-sentence definition each, flagging any term you cannot define confidently for later review.

Compute long and short futures profit and loss, including tick value, contract multiplier, and initial versus variation margin effects, across at least 10 hand-worked scenarios.

Draw and label payoff diagrams at expiry for long call, short call, long put, short put, and a covered call, marking breakeven and maximum gain or loss.

Distinguish intrinsic value from time value and explain how each behaves as expiry approaches.

Summarise the mechanics of exercise, assignment, and cash settlement versus physical delivery for the products in scope.

Trace the full trade lifecycle from execution through clearing to settlement, naming the counterparties and the point at which each risk transfers.

Explain the purpose and mechanics of initial margin, variation margin, and margin calls, and calculate a margin call amount from a given price move.

Describe the role of the central counterparty and how novation reduces bilateral credit exposure.

Identify the operational and liquidity risks that arise between trade date and settlement date and how they are mitigated.

Calculate fair value of a forward using the cost-of-carry model, breaking out spot, financing cost, storage, and income yield, across three worked examples.

Explain how carry, convenience yield, and expected future spot prices produce contango and backwardation, and identify which market condition a given price curve implies.

Apply put-call parity to detect mispricing and explain the arbitrage that restores it.

Design a hedge for a specified commercial exposure (for example, an exporter with foreign currency receivables) and justify the instrument, ratio, and tenor chosen.

Construct a client suitability assessment covering objectives, financial situation, risk tolerance, and experience, and apply it to two contrasting hypothetical clients.

Draft the disclosure content that must accompany a derivatives recommendation, including risks, costs, and conflicts of interest.

Explain the advice process end to end, from fact-find through recommendation, record-keeping, and review, and identify where documentation failures create conduct risk.

Evaluate when a derivatives solution is unsuitable and articulate the reasoning a file note should capture.

Classify a set of trading behaviours as market manipulation, insider conduct, or acceptable practice, citing the distinguishing element in each case.

Explain the obligations around client order handling, best execution, and management of conflicts between principal and client interests.

Describe record-keeping, reporting, and breach-escalation expectations and how they connect to the licensing regime covered in week 1.

Resolve four short ethics scenarios by stating the correct action and the rule or principle that drives it.

Sit a full-length timed mock covering all eight domains and record the score per domain.

Re-derive from memory the formulas for futures P&L, cost of carry, put-call parity, and margin calls, then check against your notes.

Re-teach the three weakest domains aloud or in writing without referring to materials, then verify accuracy.

Consolidate the error log from weeks 1 to 6 into a prioritised revision list of no more than 15 items.

Close every item on the prioritised revision list and re-test each one to confirm retention.

Sit a second timed mock and compare per-domain scores against week 7, targeting improvement in the weakest two domains.

Rehearse the suitability and disclosure workflow until it can be produced from memory in under 10 minutes.

Finalise a one-page formula and definitions sheet for last-day review.