Derivatives are financial instruments that derive their value from an underlying asset. The underlying asset can be equity , indices, precious metals, commodities, currencies, bonds, etc. They provide traders and investors with:

• Leverage: They can be highly leveraged, meaning you can control a large position with a relatively small margin. This can amplify both your gains and losses.
• Variety: There are many different types of derivatives, each with its own unique features and risks. Common types include futures, options, forwards, and swaps.
• Use cases: They are used for various purposes, including hedging existing positions, speculating on price movements, and generating income.