People and organizations might also search for arbitrage chances, as when the existing buying cost of an asset falls below the cost specified in a futures contract to offer the possession. Speculative trading in derivatives got a lot of prestige in 1995 when Nick Leeson, a trader at Barings Bank, made poor and unauthorized financial investments in futures agreements.The real proportion of derivatives agreements utilized for hedging functions is unknown, however it appears to be reasonably small. Also, derivatives contracts represent just 36% of the typical firms' overall currency and rates of interest exposure. Nevertheless, we understand that numerous firms' derivatives activities have at least some speculative element for a range of factors.