Over the past three decades, the market for financial derivatives has developed at an amazing speed. They could be used for hedging and other legitimate purposes. However, they are also blamed for the current financial crisis. This book proposes to analyze some fundamental issues to the nature and root of financial derivatives. This book would describe derivatives generally as contracts to trade risk. From this perspective, this book would use some case laws in the UK and US to explore the boundary between notional trading and physical sales, the line between gambling and derivatives trading, and information problems associated with risk trading. Some issues predicted in this book have surfaced after the collapse of Lehman Brothers. This book would cast some lights on the legal reform after the financial crisis; and this book would suit those who would like to approach the subject from a different angle and those who would further consider the legal infrastructure of contract, financial regulation, risk management, and gambling in any jurisdiction.