There are several types of derivative contracts traded in the derivative market:

1. Futures Contracts: These are standardized agreements between two parties to buy or sell an asset at a specified future date and price. Futures contracts are commonly used for hedging against price fluctuations or for speculative purposes.
2. Options Contracts: Options provide the holder the right (but not the obligation) to buy or sell an underlying asset at a predetermined price (strike price) on or before a specific expiration date. There are two main types of options: call options (the right to buy) and put options (the right to sell).
3. Swaps: Swaps are agreements between two parties to exchange cash flows based on different variables, such as interest rates, currencies, or commodities. They are often used for managing interest rate risk or currency exposure.
4. Forwards Contracts: Similar to futures contracts, forwards are agreements to buy or sell an asset at a future date and price. However, they are customizable and are usually traded over-the-counter (OTC), unlike standardized futures contracts traded on exchanges.

The derivative market serves several important functions:

1. Risk Management: Businesses and investors use derivatives to manage various risks, such as price fluctuations, interest rate changes, or currency volatility. For instance, a farmer might use a futures contract to lock in a price for a future crop harvest, protecting against price declines.
2. Speculation: Traders and investors use derivatives to speculate on the price movements of underlying assets. Leveraged trading in derivatives allows for potentially higher returns, but it also comes with higher risk.
3. Arbitrage: Traders take advantage of price discrepancies between the derivative and the underlying asset through arbitrage. This helps keep the prices of derivatives in line with the prices of their underlying assets.
4. Price Discovery: The derivative market contributes to price discovery by reflecting market sentiment and expectations about the future prices of underlying assets.

Derivative markets can be found on various exchanges around the world, and they play a significant role in global financial markets. However, derivatives can also be complex and carry significant risks, including the potential for substantial losses. Therefore, participants in these markets should have a good understanding of the instruments they are trading and the associated risks.