In the intricate web of modern commerce, wholesalers play a pivotal role, often operating behind the scenes yet wielding significant influence. From facilitating the flow of goods between manufacturers and retailers to providing essential services like bulk purchasing and inventory management, wholesalers serve as the linchpin of supply chains across diverse industries. This essay delves into the multifaceted nature of wholesalers, exploring their functions, significance, challenges, and evolving role in the contemporary business landscape.

Historical Context and Evolution

The concept of wholesaling dates back centuries, tracing its origins to ancient trade routes and marketplaces where merchants acted as intermediaries, consolidating goods from various sources for distribution to retailers. Over time, as economies evolved and trade expanded, wholesalers became formalized entities within the supply chain, assuming roles such as warehousing, transportation, and financing to streamline the distribution process. The Industrial Revolution further catalyzed the growth of wholesaling, as mass production necessitated efficient methods for distributing goods to burgeoning urban markets.

Functions of Wholesalers

Wholesalers perform a diverse array of functions, each contributing to the efficient movement of goods from producers to consumers. One of their primary roles is aggregation, whereby they consolidate products from multiple manufacturers into larger, more manageable quantities for distribution to retailers. This aggregation function not only reduces transportation costs but also provides economies of scale for both manufacturers and retailers.

Additionally, wholesalers serve as channels for market information, offering valuable insights into consumer trends, competitor activities, and product demand. Through their interactions with retailers and end customers, wholesalers gather data that can inform strategic decision-making for manufacturers and retailers alike.

Another vital function of wholesalers is risk-bearing. By maintaining extensive inventories of diverse products, wholesalers absorb the risk associated with fluctuating demand, supply chain disruptions, and market volatility. This risk mitigation role is particularly crucial in industries characterized by seasonality or rapid product obsolescence.

Furthermore, wholesalers provide logistical support by managing warehousing, transportation, and inventory control. Their expertise in logistics enables them to optimize the flow of goods, minimize transit times, and ensure timely delivery to retailers, thus enhancing overall supply chain efficiency.

Significance in the Supply Chain

The significance of wholesalers within the supply chain cannot be overstated. They serve as essential intermediaries that bridge the gap between producers and retailers, facilitating the smooth flow of goods from production to consumption. Wholesalers enable manufacturers to focus on core competencies such as product development and production, confident in the knowledge that their products will reach retailers efficiently and cost-effectively.

Moreover, wholesalers contribute to market efficiency by reducing transaction costs and increasing market access for both producers and retailers. Through their extensive networks and distribution channels, wholesalers create economies of scope, enabling smaller producers to reach a broader customer base than they could achieve independently.

Additionally, wholesalers play a vital role in price stabilization within the market. By absorbing excess inventory during periods of oversupply and releasing it during times of scarcity, wholesalers help mitigate price fluctuations, thereby fostering stability and predictability for both producers and retailers.

Furthermore, wholesalers facilitate market expansion by serving as conduits for new products and innovations. Their ability to identify emerging trends and capitalize on market opportunities enables them to introduce new products to retailers and consumers, driving growth and innovation within wholsaler vuse the industry.

Challenges and Adaptations

Despite their indispensable role in the supply chain, wholesalers face several challenges in today's dynamic business environment. One such challenge is the increasing competition from alternative distribution channels, including direct-to-consumer models and e-commerce platforms. As technology advances and consumer preferences evolve, traditional wholesalers must adapt their business models to remain competitive in the market.

Another challenge for wholesalers is the rising complexity of global supply chains, characterized by diverse sourcing strategies, fragmented distribution networks, and geopolitical uncertainties. Navigating these complexities requires wholesalers to enhance their logistical capabilities, invest in supply chain visibility technologies, and forge strategic partnerships with suppliers and logistics providers.

Moreover, wholesalers must contend with the growing trend of disintermediation, whereby manufacturers bypass traditional distribution channels to sell directly to retailers or consumers. To counteract this trend, wholesalers must demonstrate their value proposition through superior service, efficiency, and market expertise.

Furthermore, wholesalers face pressure to innovate and diversify their product offerings to meet changing consumer preferences and market demands. This may involve expanding into new product categories, investing in private-label brands, or developing value-added services such as marketing support and product customization.

The Future of Wholesaling

Furthermore, as supply chains become more interconnected and globalized, wholesalers will need to enhance their agility and resilience to navigate unforeseen disruptions and uncertainties. This may involve adopting agile supply chain practices, diversifying sourcing strategies, and investing in risk management capabilities to mitigate potential risks and vulnerabilities.

In conclusion, wholesalers play a vital role in modern business ecosystems, serving as indispensable intermediaries that facilitate the efficient movement of goods from producers to consumers. Despite facing numerous challenges and disruptions, wholesalers continue to adapt and innovate, leveraging technology, market insights, and logistical expertise to thrive in an ever-changing business landscape. As the dynamics of commerce continue to evolve, wholesalers will remain essential actors in the supply chain, driving efficiency, innovation, and growth across diverse industries.

Leadership is not merely about occupying a position of authority; it is about inspiring and guiding individuals and organizations toward a common goal. Conscious leadership takes this concept a step further, emphasizing the importance of self-awareness, empathy, and purpose-driven decision-making. A conscious leader operates from a place of mindfulness, focusing on the well-being of their team, stakeholders, and the broader community. In this guide, we will explore the principles, qualities, and practices of conscious leadership and how they can be applied to create positive and sustainable change.

The Foundation of Conscious Leadership

At the core of conscious leadership lies self-awareness. To lead consciously, a leader must have a deep understanding of their own values, strengths, weaknesses, and triggers. Self-reflection and introspection are essential tools for developing this awareness. Through practices such as meditation, journaling, or engaging in honest conversations with trusted mentors or coaches, leaders can cultivate a heightened sense of self-awareness.

Purpose-Driven Leadership

Conscious leaders operate with a clear sense of purpose that goes beyond financial success or personal gain. They align their actions and decisions with a higher mission, one that contributes to the betterment of society or the environment. Purpose-driven leadership provides a guiding light that inspires and motivates both the leader and their team. By connecting the organization's goals with a greater purpose, conscious leaders create a shared sense of meaning and fulfillment.

Cultivating Empathy and Emotional Intelligence

Empathy is a fundamental quality of conscious leadership. It involves the ability to understand and share the feelings of others, fostering a sense of connection and trust within the team. Conscious leaders actively listen, seek to understand diverse perspectives, and create a psychologically safe environment where team members feel comfortable expressing themselves. Emotional intelligence plays a crucial role in developing empathy, as it enables leaders to recognize and manage their own emotions, as well as respond empathetically to the emotions of others.

Authenticity and Vulnerability

Conscious leaders embrace authenticity and vulnerability as strengths rather than weaknesses. They create an open and transparent culture where honesty and integrity are valued. By sharing their own challenges and imperfections, leaders encourage their team members to do the same, fostering an environment of trust, collaboration, and continuous growth. Authenticity builds bridges between leaders and their teams, fostering genuine connections and fostering a sense of belonging.

Systems Thinking and Collaboration

Conscious leaders understand the interconnectedness of all systems and stakeholders. They take a holistic approach, considering the impact of their decisions on all aspects of the organization and its surrounding ecosystem. Instead of focusing solely on short-term gains, conscious leaders consider the long-term consequences and strive to create sustainable value. Collaboration is key to systems thinking, as it involves actively involving all stakeholders in decision-making processes, fostering a sense of ownership and collective responsibility.

Mindful Decision-Making

Conscious leaders make decisions based on a combination of rational analysis and intuition. They are open to diverse perspectives and ideas, recognizing that innovation often arises from unexpected sources. Mindful decision-making involves taking the time to reflect, seek input, and consider the potential consequences of different options. By embracing uncertainty and embracing a growth mindset, conscious leaders encourage experimentation and learning from failures.

Self-Care and Well-being

Conscious leaders recognize the importance of self-care and well-being, understanding that they cannot effectively lead others if they neglect pet salon their own needs. They prioritize their physical, mental, and emotional health, engaging in practices such as exercise, mindfulness, and setting boundaries. By modeling self-care, conscious leaders inspire their teams to prioritize their well-being, creating a healthier and more balanced work environment.

Continuous Learning and Adaptability

Conscious leaders are committed to personal and professional growth. Theyrecognize that learning is a lifelong journey and actively seek opportunities to expand their knowledge and skills. They stay informed about industry trends, emerging technologies, and societal changes that may impact their organization. Conscious leaders embrace change and view challenges as opportunities for growth and innovation. They encourage a culture of continuous learning within their teams, supporting employees' professional development and fostering a growth mindset.

Ethical and Responsible Leadership

Conscious leaders operate with a strong moral compass and adhere to ethical principles in their decision-making. They prioritize integrity, honesty, and fairness, and take responsibility for their actions and their impact on others. They actively seek to create a positive and inclusive work environment, where diversity and equality are valued. Conscious leaders champion social and environmental responsibility, integrating sustainable practices into their organization's operations and actively contributing to the well-being of the communities they serve.

Inspiring and Empowering Others

Conscious leaders understand that their role is not to control or micromanage, but to inspire and empower their team members. They foster a culture of autonomy and accountability, providing their employees with the necessary resources, support, and guidance to excel in their roles. Conscious leaders encourage innovation, creativity, and risk-taking, celebrating both individual and team achievements. They invest in developing the leadership potential of their team members, recognizing that leadership is a collective endeavor.

Conclusion

Conscious leadership is a transformative approach that goes beyond traditional notions of authority and power. It requires self-awareness, empathy, purpose, and a commitment to ethical and sustainable practices. By embodying the principles and qualities of conscious leadership, leaders can create a positive work environment, drive innovation, and foster the well-being and growth of their teams. As we move toward a future that demands more conscious and responsible leadership, embracing these principles will enable leaders to navigate complexity and uncertainty while creating a meaningful impact on their organizations and society as a whole.

Weed delivery services have become increasingly popular in recent years, providing convenience and accessibility for cannabis enthusiasts in various regions. In Halifax, Nova Scotia, residents and visitors alike can now enjoy the benefits of having cannabis products delivered directly to their doorstep. This guide aims to provide a comprehensive overview of weed delivery in Halifax, including the legal framework, reputable delivery services, ordering process, product selection, and other essential considerations.

Understanding the Legal Landscape:

Before exploring weed delivery options in Halifax, it is crucial to have a clear understanding of the legal framework surrounding cannabis. In Canada, cannabis was legalized for recreational use in 2018 under the Cannabis Act. However, each province has its own regulations regarding distribution, retail, and consumption. In Nova Scotia, the Nova Scotia Liquor Corporation (NSLC) is the sole authorized distributor of recreational cannabis, including weed delivery services.

Reputable Weed Delivery Services:

In Halifax, several reputable weed delivery services operate within the legal framework established by the NSLC. These services have been licensed and authorized to deliver cannabis products to customers. Some of the popular weed delivery services in Halifax include ABC Cannabis, Green Leaf Express, and Cannabis.

Ordering Process:

To order weed for delivery in Halifax, customers must follow a straightforward process. First, they need to visit the website or app of their preferred delivery service. Customers must be of legal age, typically 19 or 21 years old, to place an order. They will be required to create an account, providing their personal information, proof of age, and sometimes a valid government-issued ID. Once the account is set up, customers can browse through the selection of products available and add them to their cart. The ordering process typically involves selecting the desired products, specifying quantities, and providing a delivery address. Payment is usually made online via credit card or other digital payment methods.

Product Selection:

Weed delivery services in Halifax offer a wide range of cannabis products to cater to different preferences and needs. Customers can choose from various strains of dried cannabis flower, pre-rolled joints, cannabis oil, edibles, concentrates, and accessories. These products come in different THC and CBD concentrations, allowing customers to select the potency that suits their preferences. It is important to note that some products may have specific purchase limits or restrictions based on the NSLC regulations.

Delivery Time and Fees:

Delivery time and fees can vary depending on the weed delivery service and the customer's location within Halifax. Most services aim to deliver within a specific time frame, such as same-day or next-day delivery. However, it is important to consider potential delays during peak times or adverse weather conditions. Delivery fees may also vary, and some services offer free delivery for orders above a certain amount. It is advisable to check the delivery policy and fees of the chosen service before placing an order.

Packaging and Discretion:

Weed delivery services prioritize discreet packaging to ensure customer privacy and comply with legal requirements. Products are typically packaged in odor-proof containers or bags that prevent the smell from escaping. The packaging is often unmarked, without any logos or labels that could indicate the contents. This ensures that the delivery process remains confidential and inconspicuous.

Age Verification and Legal Compliance:

Weed delivery services in Halifax are legally obligated to verify the age and identity of their customers to comply with the NSLC regulations. During the ordering process, customers will be required to Halifax weed provide proof of age and sometimes a valid government-issued ID. The delivery driver will also verify the customer's age and may ask to see the ID again upon delivery. It is essential to have the required documents ready to ensure a smooth and compliant transaction.

Responsible Consumption and Legal Limits:

It is crucial to understand and respect the legal limits and regulations surrounding cannabis consumption in Halifax. The NSLC has set limits on possession, purchase, and consumption of cannabis products. Customers should familiarize themselves with these limits to avoid any legal complications. Additionally, it is important to consume cannabis responsibly and be aware of the potential effects and risks associated with cannabis use.

Customer Reviews and Recommendations:

Before choosing a weed delivery service in Halifax, it is wise to check customer reviews and recommendations. Online platforms and forums dedicated to cannabis enthusiasts often provide valuable insights and experiences shared by previous customers. This information can help in selecting a reliable and reputable service that meets individual preferences and expectations.

Conclusion:

Weed delivery services have revolutionized the way cannabis enthusiasts in Halifax access their favorite products. With the convenience of online ordering and discreet delivery, residents and visitors can enjoy a seamless experience. By understanding the legal framework, reputable delivery services, ordering process, product selection, and other considerations outlined in this guide, individuals can make informed choices and enjoy the benefits of weed delivery in Halifax responsibly. Remember to always prioritize legal compliance, responsible consumption, and personal safety when using any cannabis delivery service.

London is renowned worldwide as a thriving hub for the creative industries, encompassing diverse fields such as art, design, fashion, film, music, theater, and more. If you're interested in researching and exploring the creative landscape of London, this comprehensive guide will provide you with valuable insights and practical tips to make the most of your endeavor. Whether you're a student, an entrepreneur, or simply a creative enthusiast, London offers a wealth of opportunities to delve into the dynamic world of creative industries.

Understanding the Creative Industries:
Before diving into researching the creative industries in London, it's important to grasp the scope and significance of these sectors. The creative industries encompass a wide range of disciplines that rely on individual creativity, skill, and talent to generate economic value. These industries include:

a) Advertising and Marketing
b) Architecture
c) Art and Antiques
d) Crafts
e) Design (including fashion, graphic design, product design, etc.)
f) Film, TV, and Radio
g) Music, Performing Arts, and Theater
h) Publishing
i) Software, Video Games, and Computer Services

Identifying Key Research Areas:
Once you have a basic understanding of the creative industries, it's important to identify specific areas or sectors that align with your interests. Consider the following aspects:

Historical and Cultural Context:
Explore the rich heritage of London's creative industries and the historical factors that have shaped them.

Trends and Innovations:
Research the latest trends, emerging technologies, and innovative practices within your chosen creative field.

Business and Entrepreneurship:
Investigate the business models, strategies, and entrepreneurial opportunities within the creative industries.

Education and Training:
Look into educational institutions, courses, and programs that cater to your chosen creative field. Identify opportunities for further learning and professional development.

Government Policies and Support:
Understand the policies and initiatives implemented by the government to foster the growth of creative industries in London. Explore funding opportunities and support networks available for creative entrepreneurs.

Networking and Collaboration:
Research networks, industry associations, and collaborative platforms that facilitate connections and partnerships within the creative community.

Utilizing Online Resources:
The digital landscape offers a wealth of resources to aid your research on London's creative industries. Here are some online platforms and tools to explore:

Official Websites:
Visit official websites of organizations, institutions, and government bodies related to your research area. These websites often provide valuable information, reports, and statistics.

Trade Publications and Journals:
Access industry-specific publications and journals to stay updated on the latest trends, research studies, and expert opinions.

Social Media:
Follow relevant influencers, organizations, and communities on social media platforms to gain insights, engage in discussions, and discover opportunities.

Online Databases:
Utilize online databases such as academic journals, research repositories, and industry-specific databases to access scholarly articles, case studies, and market research.

Creative Hubs and Platforms:
Explore online platforms and creative hubs that showcase the work of artists, designers, and other creatives. These platforms often provide insights into the creative process and offer opportunities for collaboration.

Visiting Cultural Institutions and Events:
London boasts numerous cultural institutions, museums, galleries, and events that provide immersive experiences and valuable research opportunities. Consider the following:

Museums and Galleries:
Visit renowned museums like the Victoria and Albert Museum, Tate Modern, and the British Museum to explore their collections and exhibitions related to your research area.

Cultural Festivals:
Attend cultural festivals such as the London Fashion Week, London Design Festival, and the BFI London Film Festival to witness the latest works and connect with industry professionals.

Artist Open Studios:
Participate in artist open studio events, where you can interact with artists, view their creative process, and gain insights into the local art scene.

Theater and Music Performances:
Attend theater productions, music concerts, and performances to experience the vibrancy of London's performing arts scene.

Creative Workshops and Talks:
Look for workshops, seminars, and rccil.org.uk talks organized by cultural institutions, industry experts, and creative professionals. These events offer opportunities to learn, network, and gain firsthand knowledge.

Engaging with Local Communities:
To deepen your understanding of London's creative industries, engage with local communities and connect with like-minded individuals. Here's how:

Join Meetup Groups:
Search for Meetup groups focused on your research area. Attend meetups, network with fellow creatives, and engage in discussions.

Attend Networking Events:
Keep an eye out for networking events, industry conferences, and panel discussions relevant to your research field. These events provide opportunities to meet professionals and gain valuable insights.

Collaborate with Local Artists and Designers:
Reach out to local artists, designers, and creatives for collaboration opportunities or to learn from their experiences. Participating in joint projects can offer unique perspectives and enhance your research.

Volunteering and Internships:
Consider volunteering or interning with organizations or events related to your research area. This hands-on experience will provide practical knowledge and industry connections.

Conducting Field Research:
To gather firsthand information and insights, conduct field research within your chosen creative industry. Here are some methods to consider:

Interviews:
Conduct interviews with professionals, artists, designers, and entrepreneurs working in your research area. Prepare thoughtful questions to gain insights into their experiences, challenges, and success stories.

Surveys and Questionnaires:
Design and distribute surveys or questionnaires to gather quantitative data and opinions from industry professionals or consumers.

Site Visits:
Visit relevant workplaces, studios, production facilities, or creative spaces to observe the working environment and understand the practical aspects of your chosen field.

Case Studies:
Select and analyze case studies of successful creative ventures or projects within your research area. Identify key factors that contributed to their success.

Ethnographic Research:
Consider immersing yourself in the community you're studying, observing their practices, rituals, and interactions. This approach can provide valuable insights into the cultural aspects of the creative industry.

Documenting and Analyzing Your Findings:
As you gather information and conduct research, it's essential to document and analyze your findings effectively. Consider the following steps:

Note-taking:
Maintain a structured system for note-taking, ensuring you record key points, observations, and references during your research process.

Data Analysis:
Organize and analyze your data using appropriate methods such as content analysis, thematic coding, or statistical analysis. This will help identify patterns, trends, and insights.

Visual Presentations:
Present your research findings using visual aids such as graphs, charts, infographics, or multimedia presentations. Visual representations can enhance the clarity and impact of your research.

Report Writing:
Compile your research findings into a comprehensive report, including an introduction, methodology, results, analysis, and conclusions. Ensure your report is well-structured, concise, and supported by relevant references.

Ethical Considerations:
When conducting research in the creative industries, it's important to adhere to ethical guidelines and considerations. Respect intellectual property rights, maintain confidentiality, and seek informed consent when interacting with individuals or organizations.

Conclusion:
Researching creative industries in London offers a rewarding opportunity to explore the vibrant and diverse landscape of art, design, fashion, film, music, and more. By understanding the scope, utilizing online resources, visiting cultural institutions, engaging with local communities, and conducting field research, you can gain valuable insights and contribute to the knowledge and understanding of the creative industries in London.

A financial market refers to a marketplace where various kinds of financial securities such as stocks, bonds, commodities, etc. are traded. The term ‘market’ can also refer to exchanges that are legal organizations that facilitate the trade of financial securities between buyers and sellers. In any case, these markets are categorized based of the type of financial securities that are traded through them. One such financial market is the Derivatives Market.

Derivatives market thus refers to the financial marketplace where derivative instruments such as futures, forwards and options contracts are traded between counterparties.

It was during the 1980s and 1990s that the financial markets saw a major growth in the trade of derivatives. A derivative is a financial instrument whose value is derived from the value of an underlying asset such as stocks, bonds, currencies, commodities, interest rates and/or different market indices. These underlying assets have fluctuating prices and returns, and derivatives provides a means to investors to reduce the risk exposure and leverage profits on these assets. Thus, derivatives are an essential class of financial instruments and central to the modern financial markets providing not just economic benefits but also resilience against risks. The most common derivatives include futures, forwards, options and swap contracts.

As per the European Securities and Markets Authority (ESMA), derivatives market has grown impressively (around 24 percent per year in the last decade) into a truly global market with over €680 trillion of notional amount outstanding. The interest rate derivatives (IRDs) accounted for 82% of the total notional amount outstanding followed by currency derivatives at 11%.

Main types of derivative contracts
Derivatives derive their value from an underlying asset, or simply an ‘underlying’. There is a wide range of financial instruments that can be an underlying for a derivative such as equities or equity index, fixed-income instruments, foreign currencies, commodities, and even other securities. And thus, depending on the underlying, derivative contracts can derive their values from corresponding equity prices, interest rates, foreign exchange rates, prices of commodities and probable credit events. The most common types of derivative contracts are elucidated below:

Forwards and Futures
Forward and futures contracts share a similar feature: they are an agreement between two parties to buy or sell a specified quantity of an underlying asset at a specified price (or ‘exercise price’) on a predetermined date in the future (or ‘expiration date’). While forwards are customized contracts i.e., they can be tailor-made according to the asset being traded, expiry date and price, and traded Over-the-Counter (OTC), futures are standardized contracts traded on centralized exchanges. The party that buys the underlying is said to be taking a long position while the party that sells the asset takes a short position and both parties are obligated to fulfil their part of the contract.

Options
An option contract is a financial derivative that gives its holder the right (but not the obligation) to trade an underlying asset at a price set in advance irrespective of the market price at maturity. When an option is bought, its holder pays a fixed amount to the option writer as cost for this flexibility of trading that the option provides, known as the premium. Options can be of the types: call (right to buy) or put (right to sell).

Swaps
Swaps are agreements between two counterparties to exchange a series of cash payments for a stated period of time. The periodic payments charged can be based on fixed or floating interest rates, depending on contract terms decided by the counterparties. The calculation of these payments is based on an agreed-upon amount, called the notional principal amount (or just notional).

Exchange-traded vs Over-the-counter Derivatives Market
Exchange-traded derivatives markets
Exchange-traded derivatives markets are standardized markets for derivatives trading and follows rules set by the exchange. For instance, the exchange sets the expiry date of the derivatives, the lot-size, underlying securities on which derivatives can be created, settlement process etc. The exchange also performs the clearing and settlement of trades and provide credit guarantee by acting as a counterparty for every trade of derivatives. Thus, exchanges provide a transparent and systematic course of action for any derivatives trade.

Over-the-counter markets
Over-the-counter (also known as “OTC”) derivatives markets on the other hand, provide a lesser degree of regulations. They were almost entirely unregulated before the financial crisis of 2007-2008 (also a time when derivatives markets were criticized, and the blame was placed on Credit Default Swaps). OTCs are customized markets and run by dealers who hedge risks by indulging in derivatives trading.

Types of market participants
The participants in the Derivatives products derivative markets can be categorized into different groups namely,

Hedgers
Hedging is a risk-neutralizing strategy when an investor seeks to protect a current or anticipated position in the market by limiting their risk exposure. They can do so by taking up an offset or counter position through derivative contracts. Parties such as individuals or companies who perform hedging are called Hedgers. The hedger thus aims to eliminate volatility against fluctuating prices of underlying securities and protect herself/himself from any downsides.

Speculators
Speculation is a very common technique used by traders and investors in the derivatives market. It is based on when traders have a strong viewpoint regarding the market behavior of any underlying security and though it is risky, if the viewpoint is correct, the speculation may reward with attractive payoffs. Thus, speculators use derivative contracts with a view to make profit from the subsequent price movements. They do not have any risk to hedge, in fact, they operate at a relatively high-risk level in anticipation of profits and provide liquidity in the market.

Arbitrageurs
Arbitrage is a strategy in which the participant (or arbitrageur) aims to make profits from the price differences which arise in the investments made in the financial markets as a result of mispricing. Arbitrageurs aim to earn low risk profits by taking two different positions in the same or different contracts (across different time periods) or on different exchanges to in-cash on price discrepancies or market inefficiencies.

Margin Traders
Margin is essentially the collateral amount deposited by an investor investing in a financial instrument to the counterparty in order to cover for the credit risk associated with the investment. In margin trading, the trader or investor is not required to pay the total value of your position upfront. Instead, they only need pay the margin amount which may vary and are usually fixed by the stock exchanges considering factors like volatility. Thus, margin traders buy and sell securities over a single session and square off their position on the same day, making a quick payoff if their speculations are right.

Criticism of derivatives
While derivatives provide numerous benefits and have significantly impacted modern finance and markets, they pose many risks too. In a 2002 letter to Berkshire Hathaway shareholders, Warren Buffet even described derivatives as “financial weapons of mass destruction”.

Derivatives are more highly leveraged due to relatively relaxed regulations surrounding them, and where one may need to put up half the money or more with buying other securities, derivatives traders can get by with just putting up a few percentage points of the total value of a derivatives contract as a margin. If the price of the underlying asset keeps falling, covering the margin account can lead to enormous losses. Derivatives are thus often criticized as they may allow investors to obtain unsustainable positions that elevates systematic risk so much that it can be equated to legalized gambling. Derivatives are also exposed to counterparty credit risk wherein there is scope of default on the contract by any of the parties involved in the contract. The risk becomes even greater while trading on OTC markets which are less regulated.

Derivatives have been associated with a number of high-profile credit events over the past two decades. For instance, in the early 1990s, Procter and Gamble Corporation lost more than $100 million in transactions in equity swaps. In 1995, Barings collapsed when one of its traders lost $1.4 billion (more than twice its then capital) in trading equity index derivatives.

The amounts involved with derivatives-related corporate financial distresses in the 2000s increased even more. Two such events were the bankruptcy of Enron Corporation in 2001 and the near collapse of AIG in 2008. The point of commonality among these events was the role of OTC derivative trades. Being an AAA-rated company, AIG was being exempted from posting collateral on most of its derivatives trading in 2008. In addition, AIG was unique among CDS market participants and acted almost exclusively as credit protection seller. When the global financial crisis reached its peak in late 2008, AIG’s CDS portfolios recorded substantial mark-to-market losses. Consequently, the company was asked to post $40 billion worth of collateral and the US government had to introduce a $150 billion financial package to prevent AIG, once the world’s largest insurer by market value, from filing for bankruptcy.

Conclusion
Derivatives were essentially created in response to some fundamental changes in the global financial system. If correctly handled, they help improve the resilience of the system, hedge market risks and bring economic benefits to the users. Thus, they are expected to grow further with financial globalization. However, past credit events have exposed many weaknesses in the organization of their trading. The aim is to minimize the risks associated with such trades while enjoying the benefits they bring to the financial system. An important challenge is to design new rules and regulations to mitigate the risks and to promote transparency by improving the quality and quantity of statistics on derivatives markets.