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An amortising interest rate swap is one in which the notional principal:
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Key Facts: CISI Derivatives Exam
100
Multiple-Choice Questions
CISI Derivatives Level 3 Syllabus
2 hours
Exam Duration
CISI Derivatives Level 3 Syllabus
70%
Pass Mark
CISI Investment Operations Certificate
9
Syllabus Elements
CISI Derivatives Level 3 Syllabus
On demand
Computer-Based Testing
CISI
The CISI Derivatives unit is a 2-hour, 100 multiple-choice question computer-based exam with a 70% pass mark, available on demand remotely or at a CBT centre. It is a technical unit of the Investment Operations Certificate and follows the Derivatives Level 3 syllabus effective from 21 February 2026. Questions are distributed across nine elements: Introduction to Derivatives (17), Underlying Markets (16), Clearing and Margin (14), Trading, Hedging and Investment Strategies (14), Pricing and Valuation (11), Market Structure (9), OTC Derivatives (7), Delivery and Settlement (6), and Regulatory Requirements (6). Computer-based candidates may also see up to 10% additional unscored trial questions with proportionately more time.
Sample CISI Derivatives Practice Questions
Try these sample questions to test your CISI Derivatives exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.
1A derivative is best described as a financial instrument whose value is derived from what?
2Gearing (leverage) in derivatives trading arises principally because:
3The holder of a long call option has the right, but not the obligation, to:
4An investor who writes (sells) a put option has:
5On a long call payoff diagram, the maximum loss to the holder is:
6Which option style can be exercised ONLY on the expiry date?
7An Asian option differs from a standard option because its payoff is based on:
8The key distinction between a forward and a futures contract is that a futures contract is:
9A contract for difference (CFD) is characterised by the fact that the holder:
10How does spread betting principally differ from other CFDs in the UK?
About the CISI Derivatives Exam
CISI Derivatives is a Level 3 technical unit of the Investment Operations Certificate (IOC). It tests basic knowledge of the regulations and practices in financial and commodity derivatives, their underlying markets, trading, and the principles of investment strategies through 100 multiple-choice questions across nine syllabus elements.
Questions
100 scored questions
Time Limit
2 hours
Passing Score
70%
Exam Fee
Set by CISI as part of the Investment Operations Certificate; confirm current unit pricing on the CISI website (Chartered Institute for Securities & Investment (CISI))
CISI Derivatives Exam Content Outline
Introduction to Derivatives
Risk and reward, gearing, options, futures and forwards, CFDs and spread betting, swaps, and the basics of derivatives trading including EFPs, open interest, and OTC versus exchange-traded products.
Underlying Markets
Money market instruments, foreign exchange, bonds and yield curves, equities and corporate actions, commodities, and other markets such as cryptocurrencies, freight, emissions, and weather.
Market Structure
Order types, wholesale trading facilities, OTC markets, market conventions, principal versus agency dealing, account types and segregation, give-ups, and trade reporting.
Principles of Pricing and Valuation
Arbitrage-free and cash-flow pricing, forward and futures pricing, contango, backwardation, cost of carry, fair value, basis risk, and option pricing including put-call parity and the Greeks.
OTC Derivatives
Forwards, caps, floors, collars, swaps and swaptions, credit derivatives, OTC and flex options, structured products with embedded derivatives, and ISDA documentation.
Principles of Clearing and Margin
Clearing and novation, clearing members, default management, prime brokers, central clearing of OTC, initial and variation margin, SPAN, collateral, haircuts, and the Uncleared Margin Rules.
Delivery and Settlement
The clearing house as counterparty, profit and loss on delivery, cash versus physical settlement, notice and delivery days, the EDSP, options exercise, and process control.
Trading, Hedging and Investment Strategies
Hedgers, speculators and arbitrageurs, spreads, long and short positions, hedge ratios, basis trading, covered calls, protective puts, vertical spreads, straddles, strangles, and synthetics.
Regulatory Requirements
Scope and purpose of derivatives regulation, MiFID II, ESMA and EMIR, the SEC, CFTC and NFA, rules versus principles-based regulation, client money, and best execution.
How to Pass the CISI Derivatives Exam
What You Need to Know
- Passing score: 70%
- Exam length: 100 questions
- Time limit: 2 hours
- Exam fee: Set by CISI as part of the Investment Operations Certificate; confirm current unit pricing on the CISI website
Keys to Passing
- Complete 500+ practice questions
- Score 80%+ consistently before scheduling
- Focus on highest-weighted sections
- Use our AI tutor for tough concepts
CISI Derivatives Study Tips from Top Performers
Frequently Asked Questions
How many questions are on the CISI Derivatives exam?
The CISI Derivatives unit has 100 multiple-choice questions. Candidates sitting by computer-based testing may also receive up to 10% additional trial questions that are not separately identified and do not count towards the result, with proportionately more time given.
What is the pass mark for the CISI Derivatives unit?
The pass mark for the CISI Derivatives unit is 70% of the scored questions. CISI applies this fixed standard across IOC units rather than publishing a variable scaled score.
How long is the CISI Derivatives exam?
The CISI Derivatives exam lasts 2 hours. It is a computer-based test that can be taken on demand, either remotely with online proctoring or at a CISI CBT centre.
Is CISI Derivatives part of the Investment Operations Certificate?
Yes. Derivatives is a Level 3 technical unit of the CISI Investment Operations Certificate (IOC). Candidates select it alongside other IOC units to complete the qualification.
What topics does the CISI Derivatives syllabus cover?
The syllabus has nine elements: Introduction to Derivatives, Underlying Markets, Market Structure, Principles of Pricing and Valuation, OTC Derivatives, Principles of Clearing and Margin, Delivery and Settlement, Trading, Hedging and Investment Strategies, and Regulatory Requirements.
Which CISI Derivatives elements carry the most questions?
Introduction to Derivatives carries the most at 17 questions, followed by Underlying Markets at 16, and Clearing and Margin and Trading, Hedging and Investment Strategies at 14 questions each.
Can I take the CISI Derivatives exam remotely?
Yes. CISI offers the Derivatives unit by computer-based testing, which can be sat remotely under online proctoring or at a CBT centre, and exams can be booked on demand.
How should I prepare for the CISI Derivatives exam?
Use the official CISI workbook aligned to the Derivatives Level 3 syllabus, focus study time on the higher-weighted elements, and practise timed 100-question mock exams against the 70% pass mark before booking your sitting.