A derivative is a security with a price which depends upon one or more assets. The derivative in itself is basically a contract between two parties depending on the underlying asset or assets and the value of the same depends upon the fluctuation of the value of these assets.
Low investment for high returns
In derivatives market people can transact huge transactions with small amounts and therefore it gives the benefit of leverage and hence even people who have less amount of money can enter into this market.
Derivative contracts helps to hedge the risk of high prices in the future. Most important purpose of these contracts is managing the risk.