CA KAMAL GARG

Nevertheless, derivative instruments give a lot of options, and flexibility to the businesses. A decision gone right or gone wrong can turn the fortunes of the firms and sometimes the industry. Traders have to be on their toes and, each second counts. Opportunities are unlimited; the returns are high, and a lot is at stake. But all this come, with a warning – “Handle with Care”. Irrespective of the traditional use of derivatives as instruments for hedging risk , they have been historically used by traders to speculate and gamble in pursuit of windfall gains .  Traders in lure of big money take positions which are out of their authority and control. The MONEY at stake is sometimes so huge that a derivative decision gone wrong WIPES OUT the complete company and spoils the hard reputation earned by the firm IN SECONDS .  There are numerous instances of huge losses from derivatives trading but there are a few cases in the derivatives history which stand out.  Let’s look at some of the bigg