This chapter describes advanced applications of derivatives in quantitative portfolio management, emphasizing their role in enhancing both risk-adjusted returns and absolute return potential. The first application, a Target Volatility Strategy (TVS), dynamically adjusts exposure to risky assets based on observed market volatility. A derivatives-free version of TVS demonstrates the limitations of lacking leverage, while an enhanced approach using equity futures introduces notional leverage, improving precision in risk targeting and boosting performance in low-volatility environments. The second application, a commodity carry strategy, captures absolute returns by exploiting the term structure of commodity futures. The strategy generates returns independent of market direction by holding long positions in backwardation markets and short positions in contango markets. The chapter illustrates how derivatives enable precise positioning, efficient capital allocation, and strategic flexibility in modern portfolio management through these examples.