This study looks at financial derivatives, specifically options and futures. To protect against changes in the value of fundamental assets including stocks, bonds, commodities, currencies, and stock indexes, derivative tools are used. Since the Indian derivatives market is still relatively new and not well known to all investors, SEBI must take action to raise awareness of this industry. The market price of the underlying asset immediately affects an investor's profit or loss in the cash market, which could lead to significant gains or losses. Onthe other hand, investors can minimize their downside risk and make substantial profits through the derivatives market. Hedging is the primary usage of derivatives. SEBI should think about changing several rules, such as those pertaining to contract size and the participation of Foreign Institutional Investors (Flis) in the derivatives market, in order to promote the expansion of the Indian derivatives industry. All things considered, this study sheds light on the derivatives market.