This article discusses the types of derivatives and their roles in financial risk management in International Financial Management. It also explores the ways in which derivatives protect against the IFE and PPO failings. The article highlights the arguments against financial derivatives and the disadvantages of hedging theory. It also covers the types of derivatives, including forward contracts, future contracts, and option contracts, and their roles in real-life situations. The subject is International Financial Management, and the article includes references to various sources.