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CISI Investment Advice Diploma
CISI Derivatives Level 4 Exam Preparation
Prepare for the Investment Advice Diploma Derivatives unit with ten syllabus chapters, worked calculations, revision cards and five full practice papers.
400 Practice Questions Detailed Study Notes Realistic mock exams
Course syllabus information reviewed for 2026. Always check the awarding body’s latest official syllabus and candidate updates before booking or sitting your exam.
Exactly what is included
- 400 practice questions across 5 mock exams · unlimited retakes
- Focus Learn · key areas, pitfalls, exam traps & key numbers
- Flashcards · fun, fast and effective recall
- Derivative formulas, worked examples and chapter references
- AI Analyzer & Mentor · pinpoints your weak areas
- Study Mode Exams · learn while you train
- AI Chat trained specifically for this exam
- Study material organised by syllabus
Syllabus
Module 1: Introduction to Derivatives 5% syllabus weight
Forward commitments and option rights; Gearing, liquidity and risk; Market participants.
- • Forward commitments and option rights
- • Gearing, liquidity and risk
- • Market participants
Module 2: Underlying Assets 12.5% syllabus weight
Money markets, bonds and currencies; Equities and tracker products; Commodity and other underlyings.
- • Money markets, bonds and currencies
- • Equities and tracker products
- • Commodity and other underlyings
Module 3: Exchange-Traded Futures and Options 17.5% syllabus weight
Trading venues and order instructions; Futures carry and option valuation; Greeks and market reporting.
- • Trading venues and order instructions
- • Futures carry and option valuation
- • Greeks and market reporting
Module 4: OTC Derivatives 17.5% syllabus weight
Forwards, FRAs and swaps; Credit derivatives and structured products; Documentation, collateral and controls.
- • Forwards, FRAs and swaps
- • Credit derivatives and structured products
- • Documentation, collateral and controls
Module 5: Clearing 8.75% syllabus weight
Novation and clearing relationships; Default resources and account protection; Initial and variation margin.
- • Novation and clearing relationships
- • Default resources and account protection
- • Initial and variation margin
Module 6: Delivery and Settlement 6.25% syllabus weight
Close-out, rollover and delivery; Option exercise and assignment; Invoices and uncleared margin.
- • Close-out, rollover and delivery
- • Option exercise and assignment
- • Invoices and uncleared margin
Module 7: Portfolio Research and Construction 6.25% syllabus weight
Research and market information; Portfolio risks and construction; Performance and risk measures.
- • Research and market information
- • Portfolio risks and construction
- • Performance and risk measures
Module 8: Trading, Hedging and Investment Strategies 17.5% syllabus weight
Futures and option hedges; Spreads, combinations and synthetics; Funds and client applications.
- • Futures and option hedges
- • Spreads, combinations and synthetics
- • Funds and client applications
Module 9: Investment Selection and Administration 5% syllabus weight
Client objectives and capacity; Suitable strategy selection; Monitoring and portfolio review.
- • Client objectives and capacity
- • Suitable strategy selection
- • Monitoring and portfolio review
Module 10: Regulatory Requirements 3.75% syllabus weight
Jurisdiction and client protection; European clearing and reporting; US securities and futures regulation.
- • Jurisdiction and client protection
- • European clearing and reporting
- • US securities and futures regulation
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Interactive preview
Free CISI Derivatives Level 4 (IAD) Practice Questions & Exam Preview
Try 15 CISI Derivatives Level 4 (IAD) practice questions from Exchange-Traded Futures and Options
Practice CISI Derivatives Level 4 (IAD) exam questions with answers and explanations. The full course includes 5 mock exams and chapter study tools.
Exam Preview
Exchange-Traded Futures and Options
Which activity primarily belongs to a clearing organisation rather than an execution venue?
1 / 15
Flashcards
Card 1 of 10Chapter 1
Question
What distinguishes a forward commitment from an option?
Tap to reveal answer
Focus Learn
- 1.1.1: Forward commitments
- 1.1.2: Gearing and margin
- 1.1.3: Purpose and risk
- 1.1.4: Volume, open interest and liquidity
- 1.1.5: Exchange and OTC comparison
- 1.1.6: Option rights and payoffs
- 1.1.7: Market participants
Chapter 1: Introduction to Derivatives
A derivative transfers a defined exposure through a contract. Begin with who has a right, who has an obligation and how the payoff changes before comparing the amount paid or deposited.
1.1.1: Forward commitments
A forward binds both parties to buy or sell an agreed underlying quantity at an agreed future date and price. A holder's option instead gives a right, while its writer accepts the corresponding obligation. Most forwards are negotiated OTC; do not define every forward as necessarily off-exchange. Bespoke amounts and dates can improve hedge fit but complicate transfer or early termination. Physical delivery and cash settlement describe how obligations are fulfilled, independently of whether the position is long or short.
1.1.2: Gearing and margin
Derivative exposure is mea…
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Preparation Package at a Glance
| Feature | Exams Academy | Details |
|---|---|---|
| Access Period | Lifetime Access | One-time enrollment with no recurring fee |
| Practice Exams | Unlimited Retakes | |
| Study Support | Instant 24/7 AI Tutor | Self-service AI support; live instructor support is not included |
| Cost | $151 (One-Time) | One-time payment with no recurring subscription |
Frequently Asked Questions
No. This is the Level 4 Derivatives technical unit in the Investment Advice Diploma, with ten chapters and an 80-question assessment. The Level 3 course remains separate.
The official syllabus specifies 80 scored multiple-choice questions in two hours. Computer-based sittings may add unscored trial questions with proportionate extra time.
Practice uses 56 correct answers out of 80, inferred from comparable IAD units. An accessible official unit-specific pass-mark record was not recovered, so this is labelled a practice target. Confirm official requirements with CISI when booking.
Exchange-Traded Futures and Options, OTC Derivatives, and Trading, Hedging and Investment Strategies each carry a base allocation of 14 out of 80 questions. Official allocations may vary by up to two per element.
Ten chapters, 154 recall and calculation cards, 161 revision references including 58 worked calculations, an AI tutor and 400 practice questions across five mock exams. Chapter audio is not included.
This is a technical-unit option. The IAD route also requires UK Regulation and Professional Integrity and Investment, Risk and Taxation, subject to CISI’s qualification requirements.
Yes! Test your knowledge and review detailed explanations with the free CISI Derivatives Level 4 (IAD) Mock Exam Preview below. It contains 15 exam-style questions from one named topic; the full course provides complete mock exams and syllabus coverage.
Key Benefits
Separate Level 4 course
Follow the Investment Advice Diploma unit with its own syllabus and learning materials.
- ✓ IAD technical-unit option
- ✓ Distinct from Level 3
- ✓ Ten chapters
Worked calculations
Practise pricing, margin, hedge sizing and option strategies with complete methods.
- ✓ Defined inputs and units
- ✓ Ordered calculation steps
- ✓ Answers and common traps
Five weighted papers
Build from foundational knowledge to applied and final practice using the official base allocation.
- ✓ 80 questions per paper
- ✓ Four original papers
- ✓ One balanced mixed paper
Exam Format & Details
| Assessment | Multiple-choice examination |
| Duration | 120 Minutes |
| Practice target | The practice target is 56 correct answers out of 80 (70%), inferred from comparable IAD units. Confirm CISI’s official unit-specific pass requirements when booking. |
| Level | CISI Level 4 |
| Total Qualification Time | 140 hours |
Prepare for CISI Derivatives Level 4
Derivatives is a technical-unit option in the CISI Investment Advice Diploma. It is a separate Level 4 unit from the Level 3 Derivatives course used in other CISI routes. Choose the course that matches your registered examination.
Study the underlying markets, exchange-traded and OTC contracts, clearing and settlement, portfolio analysis, hedging strategies and client regulation. The official assessment contains 80 scored multiple-choice questions in two hours. Its largest base allocations are 14 questions each for exchange-traded products, OTC derivatives and trading, hedging and investment strategies.
The learning hub contains ten detailed chapters, 154 recall and calculation cards, and 161 searchable references including 58 worked examples. Five timed mock exams provide 400 practice questions. The first four papers contain distinct questions, and the fifth mixes twenty from each. Each worked method shows its inputs, steps, answer and common trap. Practice uses a clearly identified 70% mastery target; confirm the official pass requirements when booking.
Who Is This For?
✓ Candidates taking the Derivatives technical unit in the Investment Advice Diploma
✓ Investment advisers and portfolio professionals studying derivative suitability
✓ Learners preparing for Level 4 derivative pricing, hedging and client applications
Preparation centre
CISI Derivatives Level 4 (IAD) Exam Guides
Use these connected guides for the syllabus, exam format, booking and revision strategy.
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CISI Derivatives Level 4 (IAD)
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