What are derivatives exactly and why are they apparently so "dangerous"?

Derivatives are basically financial instruments that derive their value from their underlying instrument. I gave the example of wine being a derivative of grapes in my previous sharing on seedly on options on stocks.

Dangerous perhaps, if you don't know what you are doing with them. You can have unlimited liability if you did not structure your positions correctly. But when used correctly, it can create income that is unparalleled when compared to traditional buy and hold strategy. Personally I'm managing an options portfolio generating 60% returns pa that will allow me to retire early.

I think "dangerous" is quite relative. It probaly depends on what kinds of derivatives you have, the market for derivatives, the underlying assets they are based on and like what others have mentioned, the investors themselves. I personally know people who have burnt quite a sum of their savings by playing with options. I guess they were just looking to make a quick buck!