What is derivative strategy?

Could you please elucidate the concept of derivative strategy for me? I'm trying to grasp its essence in the realm of finance and investment. Could you explain how it works and what are the key components that constitute a successful derivative strategy? Additionally, I'm curious to know about the risks associated with it and how investors can mitigate them effectively. Would you also discuss some practical examples or case studies that illustrate the application of derivative strategies in real-world scenarios? I'm keen to understand its potential benefits and how it can be integrated into a diversified investment portfolio. Thank you for your insights.