This paper attempts to review research done in the area of financial derivatives published in journals of repute from the year 2000 to 2021. The paper and the study is conceptual. The paper discusses the basic need and application of derivatives with their evolution, role, types, and challenges encountered by investors, managers, and the market as a whole. The review of the literature attempts to examine the various outcomes by applications of tools of derivatives at various levels. The study concludes that there is still a vacuum that exists wherein the application of derivatives needs to study more.

Derivatives, Hedging, Risk Management.