Individuals and organizations might likewise try to find arbitrage chances, as when the present buying rate of a property falls listed below the cost defined in a futures agreement to offer the asset. Speculative trading in derivatives gained a lot of prestige in 1995 when Nick Leeson, a trader at Barings Bank, made bad and unapproved financial investments in futures agreements.The true proportion of derivatives contracts used for hedging functions is unidentified, but it appears to be relatively little. Also, derivatives agreements account for only 36% of the typical companies' overall currency and interest rate direct exposure. However, we understand that many firms' derivatives activities have at least some speculative component for a range of reasons.