The three most important things to understand about derivatives are:
1. They are one of the tools that the unproductive financial sector uses to rip off a bigger piece of the proverbial pie from the productive sector of the economy.
2. Part of the supposed profits attributed to derivatives trading comes from creative bookkeeping. Therefore, while derivatives are a zero sum game in reality, they are (have so far been) a positive sum game on the collective books.
3. While derivatives supposedly allow companies to manage risks, they actually create systemic risk. Victor Haghani, formerly of LTCM summed it up, thusly: The hurricane is not more or less likely to hit because more hurricane insurance has been written. In the financial markets this is not true. The more people write financial insurance, the more likely it is that a disaster will happen because the people who know you have sold the insurance can make it happen. So you have to monitor what other people are doing.