Individuals and organizations might likewise try to find arbitrage chances, as when the present purchasing rate of a possession falls listed below the rate defined in a futures contract to offer the possession. Speculative trading in derivatives gained a lot of prestige in 1995 when Nick Leeson, a trader at Barings Bank, made poor and unapproved financial investments in futures contracts.The true percentage of derivatives agreements used for hedging purposes is unidentified, however it seems fairly small. Also, derivatives agreements represent just 36% of the average companies' total currency and rate of interest direct exposure. Nevertheless, we understand that numerous firms' derivatives activities have at least some speculative component for a range of reasons.