erwineyoso
erwineyoso
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People and institutions may also search for arbitrage opportunities, as when the existing buying rate of a property falls listed below the price defined in a futures contract to offer the property. Speculative trading in derivatives acquired a lot of prestige in 1995 when Nick Leeson, a trader at Barings Bank, made poor and unapproved financial investments in futures agreements.The real percentage of derivatives contracts used for hedging purposes is unknown, however it appears to be fairly little. Also, derivatives agreements represent just 36% of the average firms' total currency and interest rate exposure. Nevertheless, we know that numerous firms' derivatives activities have at least some speculative element for a variety of reasons.

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