So for those who don't know, equity derivatives are a specific banking / trading product, see here. Very basically they're ways of selling stocks and shares such as options (to buy in the future at a set price) and futures (which are commitments to buy / sell a stock or share at a given price at a given point in the future).
In terms of the tasks, they're the same sort of development, support and analysis tasks you'd likely carry out anywhere - bug fixing, build, unit test. Banks are almost always well resourced enough that the round the edges type tasks (DBA, packaging for release and so on) won't be covered by the development teams as they'll have specialists. The work can often be interesting and challenging and you'll almost always have great kit and training (because they've got the cash).
Probably Java, Linux/Unix, Oracle but could be an MS stack (.NET / SQL). The systems will usually be large scale, may be real time and are likely to be, if not mission critical, then at least responsible for very large amounts of money (with the sort of pressure that goes with that).
And that's the downside - merchant banks are often all about pressure and politics - they pay very very well and they make significant demands in return - there can be lots of arse covering (never delete an e-mail, never put anything in writing if you can avoid it) and long long hours. They're paying you well above market rate and in exchange they reserve the right not to care about your views on the productivity of the 40 hour week or how you had plans tonight when something comes up at 6pm.
But the reason they ask for this sort of knowledge is that this sort of role isn't just about the technical tasks you'd be carrying out, it's about the business knowledge that underpin the requirements and systems you're working on, and your ability to communicate well with the business.
Basically they're saying "we don't want to have to explain all this complex stuff from first principals so you need to know it up front." And it is pretty complex, it's the sort of thing that caused the banking crisis - what you can learn from Google isn't likely to be enough.
That said in some cases they are willing to take on those with good technical skills who are keen to learn. In these situations then be honest and don't try and blag it - you will get found out. Learn enough to show you're keen, focus on your technical strengths and, if it's what you want from you career, be happy you've found a route onto the gravy train.