Derivatives Markets In India Were Introduce About Seven Years Ago and Futures Options Markets Have Become an Extremely Important Trading Instrument Throughout World Tlnancial Sectors. In Our Country. India, a Futures Options Market Is Playing Very Important Role For Various Category of Investor’S Right from Retail to Institutional Investors. In This Thesis I Discuss the Role of Derivatives Markets In Terms of Price Discovery and Volatility Over a Cash Market. Paper Outlines Legal, Financial. and Structural Framework of Index Futures Contract Trading on the National Stock Exchange of India (Nse). I Offer a Summary For Price Discovery and Volatility In Nse Cnx Nifty Index and Nifty Index Futures Markets. any Study on Index Futures Trading Must Include a Discussion of the Theoretical Framework of Futures Markets Institutions, Operation Mechanisms. and Other Features of a Well Organized Futures Market Must Also Be Analyzed. Benchmark Indexes Require Special Attention. As They Represent the Underlying Assets of Overall Markets. I Review the Techniques of Price Discovery and Volatility and the Various Factors That Innocence It. I Operate on the Assumption That Indexes Are Suitable Instruments For Serving As a Foundation of Futures Contracts. I Explain Specification and Pricing Techniques of Index Futures and Argue That They May Indeed Represent a Good Alternative For Managing Stock Market Risk.