The perception that the futures market can lead to lower volatility in the spot market is common. However, the opposite is also true. As a result, the impact of derivatives trading on spot market volatility is widely debated, and the role of derivatives trading has recently received much attention. Increased regulation of derivatives has been put into practice, despite the lack of reliable statistical evidence demonstrating that derivatives trading is associated with a change in volatility. However, we cannot ignore the benefits of derivatives trading as it plays an important role in price discovery, portfolio diversification and hedging. Some financial market experts also believe that derivatives markets only create market efficiency and therefore find no reason to regulate the financial sector and derivatives trading. There is still disagreement over the role that derivatives trading plays in stock market volatility. Considering the above factors, it is necessary to study the impact of derivative contracts in the Indian market. The area of ​​interest of this thesis is to study the role of index futures and stock futures on the volatility of Indian cash markets. The objective of this study is to provide insights into the ongoing debate on the role of derivatives in capital markets. Thus, the main research question of this thesis is: