In the modern economic era, innovative financial product is need for global financial crisis. Financial risk is the unanticipated volatility or variability of returns, and therefore it contains both possible worse than anticipated with excellent than anticipated returns. The derivatives contract is stalwart weapon to deal with the financial risk management. The importance of derivatives is primarily for hedging risk exposure as used by hedgers. The main principle of this book is to make students expert with the risk management and financial derivatives strategy. The book focuses on how to use derivatives contract to measure and evaluate risk and take accurate investment decision. And at the cost of repetition, each chapter is made of self-contained and related to other chapters. But this is an added advantage to students who get a recap of some of the points of significance.