CONTENT CHAPTER 1 Conceptual Aspect of Derivatives; 1.1 Introduction; 1.2 Evolution of the Derivative market & the Derivative instruments; 1.3 Trading of Derivatives; 1.4 Research Methodology; CHAPTER 2 Foreign Exchange Market; 2.1 How currencies are traded; 2.2 Currency Market and related Markets; 2.3 Why Exchange rate change; 2.4 Evolution of the Forex Derivative Market in India. 2.5 Structuring Derivative Exchanges; 2.6 Why Establish a Derivative Exchange; 2.7 The Micro structure of Derivative Exchanges; 2.8 Trading Mechanism and clearing arrangements; CHAPTER 3 Options & Derivatives Market; 3.1 Options: A Historical Perspective; 3.2 Types of Options; 3.3 RBI Regulations; 3.4 New Types of Options; 3.5 Trading in Options; 3.6 Concept of "In-the-money", "At-the-money" and "Out-of-the-money Options; 3.7 Motivation for Option Trading; CHAPTER 4 Swaps Basics; 4.1 Classification of the Swaps contract in Legal terms; 4.2 Developments in the Use of Swaps; 4.3 Foreign Exchange Products; 4.4 The historical development of Swaps in Currency Markets; 4.5 Modem Form of Currency Swaps; 4.6 The Structure of Currency Swaps; CHAPTER 5 Derivative Market and its Legal concerns; 5.1 Centre of Derivatives; 5.2 Benefits of Derivatives; 5.3 Present Legal Framework; 5.4 Foreign Currency-rupee swaps; 5.5 Future trading in stocks/securities and currencies; CHAPTER 6 Conclusion; Bibliography;