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2026 Statistics

Key Facts: CIRO Derivatives Exam Exam

100

Total Questions

CIRO Blueprint

3 hours

Exam Duration

CIRO Rules

60%

Passing Mark

CIRO Rules

$475 CAD

Exam Fee

CIRO 2026 Pricing

CBT

Exam Format

Prometric Portal

The CIRO Derivatives Exam consists of 100 multiple-choice questions over a 3-hour duration, with a 60% passing mark. It is computer-based and administered by Prometric under the 2026 CIRO model.

Sample CIRO Derivatives Exam Practice Questions

Try these sample questions to test your CIRO Derivatives Exam exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which of the following bodies is responsible for clearing and settling all exchange-traded options and futures contracts traded on the Montréal Exchange (MX)?

A.Canadian Derivatives Clearing Corporation (CDCC)

B.Canadian Investment Regulatory Organization (CIRO)

C.CDS Clearing and Depository Services Inc. (CDS)

D.Autorité des marchés financiers (AMF)

Explanation: The Canadian Derivatives Clearing Corporation (CDCC) acts as the issuer, clearinghouse, and guarantor of all exchange-traded derivative contracts in Canada, including options and futures traded on the Montréal Exchange (MX).

2An investor holds a long position in a gold futures contract on the Montréal Exchange. If the settlement price increases, what is the immediate effect on the investor's margin account under the mark-to-market process?

A.The margin account is credited with the cash gain, which is available for withdrawal.

B.The gain is recorded as paper profit but cannot be withdrawn until contract expiration.

C.The gain reduces the initial margin requirement but does not change the account cash balance.

D.The gain is credited only if the investor closes out the position prior to the end of the day.

Explanation: Futures contracts are marked-to-market daily. Any gain resulting from an increase in the settlement price of a long futures contract is credited to the investor's margin account in cash at the end of the day and is immediately available for withdrawal.

3An equity option contract traded on the Montréal Exchange (MX) represents how many shares of the underlying stock under standard contract specifications?

A.100 shares

B.10 shares

C.1,000 shares

D.50 shares

Explanation: Standard equity option contracts in Canada represent 100 shares of the underlying stock.

4What is the primary difference between American-style options and European-style options?

A.American-style options can be exercised at any time up to expiration, whereas European-style options can only be exercised at expiration.

B.American-style options trade on North American exchanges, while European-style options trade only on European exchanges.

C.American-style options are cleared by the CDCC, whereas European-style options are cleared by the OCC.

D.American-style options settle in cash, while European-style options always settle in the underlying physical asset.

Explanation: American-style options give the holder the right to exercise the option at any business day up to and including the expiration date. European-style options can only be exercised on the expiration date.

5If XYZ stock is trading at $54.00, what is the intrinsic value and time value of an XYZ October 50 Call option trading at a premium of $5.50?

A.Intrinsic Value: $4.00; Time Value: $1.50

B.Intrinsic Value: $1.50; Time Value: $4.00

C.Intrinsic Value: $5.50; Time Value: $0.00

D.Intrinsic Value: $0.00; Time Value: $5.50

Explanation: Intrinsic value for a call option is the amount by which the underlying stock price exceeds the strike price: $54.00 - $50.00 = $4.00. The remaining portion of the premium is time value: $5.50 (Premium) - $4.00 (Intrinsic Value) = $1.50.

6If ABC stock is trading at $42.00, what is the intrinsic value and time value of an ABC November 45 Put option trading at a premium of $4.25?

A.Intrinsic Value: $3.00; Time Value: $1.25

B.Intrinsic Value: $0.00; Time Value: $4.25

C.Intrinsic Value: $1.25; Time Value: $3.00

D.Intrinsic Value: $4.25; Time Value: $0.00

Explanation: For a put option, the intrinsic value is the amount by which the strike price exceeds the underlying stock price: $45.00 - $42.00 = $3.00. The time value is the premium minus intrinsic value: $4.25 - $3.00 = $1.25.

7Which of the following statements best describes put-call parity for European options on non-dividend-paying stocks?

A.A long call plus a short put plus the present value of the strike price equals the stock price.

B.A long call plus cash equal to the present value of the strike price equals a long put plus the stock.

C.A long call plus the stock equals a long put plus cash equal to the present value of the strike price.

D.A long call plus a long put equals the stock price minus the strike price.

Explanation: Put-call parity states that the value of a fiduciary call (long call + risk-free bond with face value equal to the strike price) must equal the value of a protective put (long put + long stock). Mathematically: C + K*e^(-rT) = P + S.

8A stock is trading at $100. A 1-year European call option with a strike price of $100 trades for $8.00. The risk-free rate is 5% per annum, continuously compounded. If put-call parity holds, and the stock pays no dividends, what is the price of a 1-year European put option with a strike price of $100? (Use e^-0.05 = 0.9512)

A.$3.12

B.$8.00

C.$12.88

D.$4.88

Explanation: By put-call parity: P = C - S + K*e^(-rT). Given C = $8.00, S = $100, K = $100, and e^(-rT) = 0.9512: P = 8.00 - 100 + 100*(0.9512) = 8.00 - 100 + 95.12 = $3.12.

9Under what circumstance does an options clearing organization like the CDCC assign an exercise notice to a short member firm?

A.Through a random selection process among all clearing members holding short positions in that option series.

B.On a first-in, first-out (FIFO) basis based on when the short position was established.

C.To the member firm with the largest short position in that series.

D.Based on the lowest option premium paid at the time of position opening.

Explanation: The CDCC uses a random selection process to assign exercise notices to clearing members that have short positions in the corresponding option series.

10Which of the following events would lead to an adjustment in the strike price and contract multiplier of an equity option contract?

A.A 2-for-1 stock split by the underlying corporation.

B.A regular quarterly cash dividend of $0.25 per share.

C.An increase in the implied volatility of the underlying stock.

D.A change in the risk-free interest rate by the Bank of Canada.

Explanation: Option contracts are adjusted for corporate actions such as stock splits, reverse splits, stock dividends, and special distributions to maintain the economic value of the position. A 2-for-1 stock split results in the strike price being halved and the number of contracts doubled (or shares per contract adjusted).

About the CIRO Derivatives Exam Exam

The CIRO Derivatives Exam is the official regulatory exam under Canada's proficiency model, designed to assess the competency of investment professionals trading or advising on derivatives (options, futures, forwards, swaps) in Canada. It focuses on pricing, risk management (Greeks), trading strategies, derivatives margin rules (Rule 5700), suitability under KYC guidelines, and market integrity rules.

Assessment

100 multiple-choice questions (CBT, closed book)

Time Limit

3 hours

Passing Score

60%

Exam Fee

$475 CAD (Canadian Investment Regulatory Organization (CIRO))

CIRO Derivatives Exam Exam Content Outline

The Client Relationship

Understand client requirements for trading derivatives, including KYC standards, client risk profiles, and suitability assessments.

10%

Regulatory Documentation

Identify and explain mandatory client disclosures (e.g., Derivatives Risk Disclosure Statement), client options agreements, and account opening requirements.

20%

Types and Features of Derivatives

Analyze features of options (equity, index), futures, forwards, swaps, and contracts for difference (CFDs).

20%

Derivative Pricing

Calculate option value, understand the Greeks (Delta, Gamma, Theta, Vega, Rho), put-call parity, and variables affecting premiums.

19%

Trading, Clearing, and Settlement

Review order execution, the role of CDCC (Canadian Derivatives Clearing Corporation), exercise and assignment procedures, and settlement.

22%

Speculating, Hedging, and Strategies

Apply option strategies (covered calls, spreads, protective puts, straddles/strangles) and futures hedging; calculate payoffs, profits, losses, and breakeven points.

11%

Market Integrity & Standards of Conduct

Apply CIRO rules on prohibited practices (wash trading, front-running, spoofing), conflict of interest management, and ethical standards.

How to Pass the CIRO Derivatives Exam Exam

What You Need to Know

Passing score: 60%
Assessment: 100 multiple-choice questions (CBT, closed book)
Time limit: 3 hours
Exam fee: $475 CAD

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

CIRO Derivatives Exam Study Tips from Top Performers

1Master the Greeks: Know how delta, gamma, vega, and theta behave under different market movements and time decay.

2Understand margin rules (Rule 5700): Focus on the unhedged short options margin formula and how covered calls or spreads reduce margin requirements.

3Practice multi-leg options strategies: Be comfortable calculating max profit, max loss, and breakeven points for spreads, straddles, and strangles.

4Be clear on suitability: Review the KYC requirements and matching client risk parameters with appropriate derivatives strategies.

5Pay attention to documentation timelines: Know when the Derivatives Risk Disclosure Statement must be delivered relative to the first trade.

Frequently Asked Questions

Do I need to take a mandatory prep course before taking the CIRO Derivatives Exam?

No. Effective January 1, 2026, CIRO has adopted an assessment-centric model where there are no longer mandatory courses (like the former DFOL or OLC) required to register. Candidates may self-study using the syllabus or choose a third-party prep provider.

What is the passing score for the exam?

The passing score is 60%. The exam consists of 100 multiple-choice questions, meaning you must answer at least 60 questions correctly.

What happens if I fail the CIRO Derivatives Exam?

If you fail, you can register to retake the exam by paying the $475 CAD fee again. Note that CIRO enforces specific waiting periods between subsequent attempts (e.g., 30 days for second attempt, 60 days for third attempt).

Are calculators allowed in the testing center?

Yes, standard, non-programmable calculators are allowed and provided by the test center (Prometric) or within the computerized exam interface.

100+ Free CIRO Derivatives Exam Practice Questions

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