Derivative contracts offer several advantages:
●    Risk Management: They allow businesses to hedge against price fluctuations in commodities, currencies, or interest rates.
●    Price Discovery: Derivatives markets can provide insights into future price expectations for underlying assets.
●    Market Efficiency: They can improve liquidity and reduce transaction costs in the underlying asset markets.
●    Leverage: Derivatives often require a smaller capital outlay than direct investment in the underlying asset.
●    Portfolio Diversification: They offer ways to gain exposure to various asset classes and markets.
●    Arbitrage Opportunities: Sophisticated traders can exploit price discrepancies between related securities.