This study examines investor perception of the derivative market by synthesizing evidence from empirical surveys, behavioral-finance literature, regulatory reports, and recent market data. Findings across existing research show that while participation in futures and options has increased—particularly among retail investors—awareness of derivative mechanics, margin requirements, and leverage-related risks remains limited. Investor perception is strongly shaped by behavioral biases such as overconfidence, herding, and sensation seeking, which contribute to speculative trading rather than informed hedging. Technological advancements, including mobile trading platforms and low-cost brokerage models, have improved accessibility but also intensified short-term, high-risk trading behavior. Institutional investors continue to view derivatives primarily as risk-management tools, while retail investors perceive them largely as avenues for quick gains, often resulting in substantial losses. Regulatory findings from recent years reinforce this mismatch between perception and outcomes, prompting calls for strengthened investor education, clearer disclosures, and redesigned contract structures. Overall, the literature indicates that investor perceptions are fragmented, influenced by limited financial literacy, cognitive biases, and platform dynamics. The study highlights the need for more causal, data-driven research to develop effective interventions that align investor perception with the actual risk–return profile of derivative instruments.