People and organizations might likewise look for arbitrage chances, as when the present buying rate of an asset falls below the rate specified in a futures contract to sell the property. Speculative trading in derivatives got a fantastic deal of prestige in 1995 when Nick Leeson, a trader at Barings Bank, made bad and unapproved investments in futures agreements.The true proportion of derivatives agreements used for hedging functions is unknown, but it seems relatively small. Also, derivatives agreements represent just 36% of the average firms' total currency and interest rate direct exposure. However, we understand that lots of companies' derivatives activities have at least some speculative component for a variety of reasons.