People and institutions may likewise look for arbitrage chances, as when the existing buying rate of a property falls below the cost specified in a futures contract to offer the property. Speculative trading in derivatives gained a lot of notoriety 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 utilized for hedging functions is unidentified, however it appears to be fairly little. Likewise, derivatives agreements account for just 36% of the typical companies' total currency and interest rate exposure. Nonetheless, we understand that lots of firms' derivatives activities have at least some speculative part for a variety of reasons.