Due to the increased effects of globalization, economies are invariably exposed to global market factors and are volatile and sensitive to rising level of complexity of risks and changing conditions, making risk universal. However, due to the word of the ill effect of wide fluctuations of risk, various financial innovations have taken place at all times - derivatives being the most important. The uses of derivatives have become very predominant because of increased globalization and financial integration causing unpredictable variables and fluctuations. Though derivative instruments provide benefits, they come with certain risks as well. Low transaction cost and flexibility to take positions are the predominant features of futures and options instruments, which have lead to mushroom growth in their trading volume across the world. Popularity of equity futures contracts in India can be adjudged from the fact that in terms of trading volume.India's experience with the launch of equity derivatives market has been extremely positive. The derivatives turnover on the NSE has surpassed the equity market turnover. The turnover of derivatives on the NSE increased from Rs. 23,654 million (US $ 207 million) in 2000-01 to Rs. 315,330,030 million in 2012-13.