A Review Of After Shave Splash Lotions

Shaving is a daily ritual that bridges the gap between self-care and grooming. At the heart of this ritual lies the essential tool known as shaving cream. This seemingly humble product plays a crucial role in achieving a smooth, comfortable, and irritation-free shave. In this exploration of shaving cream, we delve into its history, composition, types, application techniques, and its significance in modern grooming.

A Historical Glimpse

The practice of shaving dates back centuries, with various cultures employing different methods and substances to enhance the shaving experience. Ancient Egyptians, for example, used a mixture of animal fat and wood alkali to create a rudimentary shaving cream. However, the modern concept of shaving cream as we know it today began to take shape in the 19th century.

The earliest commercial shaving creams were introduced in the mid-1800s and were often available in solid or semi-solid forms. These early versions were primarily made from a combination of soap and water, with some formulations incorporating natural oils and fragrances. The evolution of technology and chemistry over the decades led to the development of more sophisticated and effective shaving creams that catered to specific skin types and preferences.

Composition and Formulations

Modern shaving creams are formulated to provide a luxurious and comfortable shaving experience. They consist of a blend of ingredients carefully chosen to create a rich lather, soften facial hair, and lubricate the skin. The primary components of shaving cream include:

Water: Water serves as the base of most shaving creams, providing the necessary fluidity for the product to be easily applied to the skin.

Soap: Soap, usually in the form of potassium or sodium salts of fatty acids, acts as a surfactant that breaks down oils and dirt, allowing for a thorough cleanse of the skin and hair.

Emollients and Oils: Natural oils, such as coconut oil, jojoba oil, and glycerin, are commonly added to shaving creams to moisturize and soften the skin and hair, reducing the friction caused by the razor.

Fragrance: Essential oils and synthetic fragrances are often included to enhance the sensory experience of shaving. These scents can range from traditional, woody aromas to more contemporary, citrusy notes.

Humectants: Ingredients like glycerin help retain moisture on the skin's surface, preventing excessive drying during the shaving process.

Stabilizers and Thickeners: These additives maintain the consistency of the shaving cream, allowing it to be easily whipped into a lather.

Types of Shaving Cream

Shaving creams come in a variety of formulations, each catering to different skin types, preferences, and techniques. The main types include:

Traditional Shaving Cream: These are often found in tubs or tubes and require the use of a shaving brush to create a lather. Traditional shaving creams offer a classic, nostalgic experience and are favored by wet shaving enthusiasts.

Brushless Shaving Cream: Also known as shaving gels or foams, these products do not require a brush for lathering. They are dispensed as a gel or foam and are particularly convenient for those seeking a quick and fuss-free shave.

Shaving Soap: While not exactly a cream, shaving soaps are solid formulations that require a brush to create a lather. They often have a more traditional feel and can provide a rich, dense lather.

Cream-to-Foam Shaving Cream: These products start as a cream and transform into a rich foam when applied to the skin. They offer a compromise between the traditional and brushless options.

Application Techniques

Achieving the perfect lather is key to a comfortable and close shave. Whether using a traditional shaving cream, brushless gel, or shaving soap, the following techniques can help create an optimal lather:

Traditional Shaving Cream with a Brush: Wet the brush with warm water, then swirl it in the shaving cream until a rich lather forms. Apply the lather to the face using circular motions, ensuring an even distribution.

Brushless Shaving Cream or Gel: Dispense a small amount of Pure Badger Shaving Brushes the product onto wet hands. Rub the product between your palms to create a lather, then apply it to the face.

Shaving Soap with a Brush: Wet the brush and then use circular motions to load the brush with soap. Transfer the loaded brush to a shaving bowl or directly to the face, then whip the lather into a rich foam.

Cream-to-Foam Shaving Cream: Apply a small amount of the cream to a wet face and massage it in. The product will transform into a lather as you work it.

Significance in Modern Grooming

In the era of multi-blade razors and electric shavers, the role of shaving cream might seem diminished. However, its importance in modern grooming cannot be overstated. Here are some reasons why shaving cream remains an integral part of the shaving process:

Protection and Lubrication: Shaving cream creates a protective barrier between the razor and the skin, minimizing friction and reducing the risk of nicks, cuts, and irritation.

Softening Facial Hair: The emollients and oils in shaving cream help to soften the hair, making it easier to cut and reducing the force required during shaving.

Moisturization: The moisturizing properties of shaving cream prevent the skin from drying out during the shaving process, leaving it feeling soft and supple.

Enhanced Sensorial Experience: The scents and textures of shaving creams add a sensory dimension to the shaving ritual, transforming it from a routine task into a moment of self-indulgence.

Preparation for Shaving: The act of applying shaving cream serves as a preparatory step, opening up the pores and lifting the hair follicles, resulting in a more effective and comfortable shave.

Conclusion

Shaving cream, with its rich history, diverse formulations, and multifaceted benefits, remains an essential component of the shaving ritual. Whether one prefers the traditional experience of using a brush and soap or the convenience of brushless gels, the act of lathering up with shaving cream continues to bridge the gap between personal care and grooming. In a world where efficiency often trumps tradition, the enduring significance of shaving cream as a tool for achieving a close, comfortable, and enjoyable shave reminds us that the simple acts of self-care can be imbued with meaning and satisfaction.

The smart Trick of pet care That Nobody is Discussing



Pets bring immense joy and companionship to our lives, and as pet owners, it is our responsibility to provide them with the utmost care and compassion. Ensuring the physical and emotional well-being of our furry friends requires attention, dedication, and love. In this guide, we will explore the various aspects of compassionate pet care, from providing proper nutrition and healthcare to fostering a loving environment. By following these principles, you can enhance the quality of life for your beloved pets.

Nutrition and Hydration

Proper nutrition forms the foundation of a healthy and happy pet. A well-balanced diet tailored to their species, breed, age, and size is essential. Consult with a veterinarian to determine the appropriate food and feeding schedule for your pet. High-quality pet food that includes all the necessary nutrients, such as proteins, carbohydrates, fats, vitamins, and minerals, should be the primary source of their diet. Avoid feeding them excessive table scraps or human food, as it may lead to nutritional imbalances or obesity. Additionally, always provide fresh and clean water to keep your pet hydrated throughout the day.

Exercise and Mental Stimulation

Regular exercise is crucial for pets to maintain a healthy weight, promote cardiovascular health, and prevent behavioral problems. Dogs require daily walks or play sessions, while cats benefit from interactive toys and vertical spaces for climbing. Engage in activities that cater to your pet's specific needs, energy level, and abilities. Mental stimulation is equally important. Utilize puzzle toys, treat-dispensing toys, or engage in training sessions to keep their minds active and prevent boredom.

Veterinary Care and Preventive Measures

Regular veterinary check-ups are essential to ensure your pet's overall health and catch any potential issues animal early on. Schedule annual or biannual visits to the veterinarian for comprehensive physical examinations, vaccinations, and parasite prevention. Stay up to date with vaccinations, as they protect against life-threatening diseases. Additionally, discuss preventive measures such as flea and tick control, heartworm prevention, and spaying/neutering with your vet to maintain your pet's well-being.

Grooming and Hygiene

Maintaining proper grooming and hygiene practices is essential for your pet's comfort and health. Regular brushing helps remove loose hair, prevents matting, and promotes a healthy coat. Trim their nails regularly to prevent overgrowth or discomfort. Proper dental care, including regular teeth brushing or providing dental treats, is crucial for preventing dental diseases. Additionally, ensure your pet's ears and eyes are clean and free from any signs of infection. Consult your veterinarian for specific grooming routines that suit your pet's breed and needs.

Creating a Safe and Enriching Environment

Your home should be a safe haven for your pet. Pet-proof the living space by removing toxic plants, securing hazardous chemicals, and preventing access to small objects that could be swallowed. Provide a comfortable bed or resting area where your pet can relax and sleep peacefully. Consider creating a designated space for your pet, complete with their toys, water, and food bowls. Additionally, provide opportunities for socialization, both with humans and other pets, to foster a well-adjusted and happy pet.

Emotional Well-being and Bonding

Pets thrive on love, attention, and a strong bond with their owners. Spend quality time with your pet every day, engaging in activities they enjoy. Offer praise, affection, and rewards during training sessions to reinforce positive behavior. Understand your pet's body language and cues to better respond to their needs. Provide mental and emotional stimulation through interactive play and companionship. Remember, your presence and affection are vital for their emotional well-being.

Conclusion:

Compassionate pet care encompassesall aspects of a pet's life, from their physical health to their emotional well-being. By following the guidelines outlined in this guide, you can ensure that your furry friend receives the care and love they deserve. Remember to provide a nutritious diet, engage in regular exercise and mental stimulation, prioritize veterinary care and preventive measures, maintain proper grooming and hygiene, create a safe environment, and foster a strong bond with your pet. With your compassion and dedication, you can enhance the quality of life for your beloved pet and create a lasting and fulfilling relationship.

Not known Facts About Office location reviews

Office reviews play a crucial role in shaping a positive work environment and fostering employee satisfaction. By providing valuable feedback, office reviews enable organizations to identify strengths, address weaknesses, and implement necessary improvements. In this comprehensive guide, we will explore the significance of office reviews, discuss the benefits they offer to both employees and employers, and provide practical tips on conducting effective office reviews. Whether you are an employee seeking to provide constructive feedback or an employer looking to enhance your workplace, this guide will equip you with the knowledge to navigate the realm of office reviews successfully.

Understanding the Importance of Office Reviews

Office reviews are essential for several reasons. Firstly, they serve as a platform for employees to express their thoughts, concerns, and suggestions, fostering a culture of open communication. Secondly, office reviews provide valuable insights into the employee experience, helping organizations identify areas of improvement and implement positive changes. Moreover, by encouraging regular reviews, employers demonstrate their commitment to employee well-being and development. By understanding the importance of office reviews, both employees and employers can unlock the potential for a more productive and harmonious workplace.

Benefits of Office Reviews

Office reviews offer a range of benefits that contribute to the success of both individuals and organizations. For employees, participating in office reviews can lead to increased job satisfaction, improved work-life balance, and enhanced personal growth. Honest feedback and constructive criticism provided during office reviews empower employees to make meaningful contributions, address challenges, and develop professionally. Additionally, regular reviews create a sense of trust and transparency, fostering a positive work culture that promotes collaboration and engagement.

On the other hand, employers benefit greatly from office reviews. These reviews provide organizations with a holistic view of their strengths and weaknesses, enabling them to develop tailored strategies to optimize productivity and employee satisfaction. Office reviews also serve as a means of identifying high-performing employees, recognizing their efforts, and providing appropriate rewards or growth opportunities. Furthermore, by addressing any concerns raised during the reviews, employers can effectively mitigate issues before they escalate, reducing turnover rates and fostering employee loyalty.

Conducting Effective Office Reviews

To conduct effective office reviews, it is crucial to establish a well-defined process that promotes transparency, confidentiality, and fairness. Here are some key steps to consider:

Define the Purpose: Clearly communicate the objectives and expectations of the office review process to employees. Establish a constructive tone that encourages open dialogue and emphasizes the importance of feedback in driving positive change.

Collect Feedback: Employ a variety of feedback collection methods, such as anonymous surveys, one-on-one discussions, or online platforms, to ensure employees feel comfortable expressing their opinions. Provide specific prompts to guide employees in providing valuable feedback.

Create Actionable Metrics: Develop clear evaluation criteria that align with the organization's goals and values. These metrics should focus on both individual and team performance, as well as factors like work environment, leadership, and employee well-being.

Maintain Confidentiality: Assure employees that their feedback will remain confidential and anonymous if desired. This confidentiality fosters trust and encourages honest feedback from employees who may be hesitant to express concerns openly.

Provide Timely Feedback: Ensure that feedback is promptly shared with employees to maintain a sense of continuity and demonstrate the value placed on their input. Constructive feedback should highlight strengths, identify areas for improvement, and offer suggestions for growth.

Develop Action Plans: Collaborate with employees to create action plans that address the areas identified for improvement. These plans should be specific, measurable, achievable, relevant, and time-bound (SMART), and should involve clear responsibilities and deadlines.

Implement Changes: Encourage management to actively support the implementation of necessary changes and initiatives resulting from office reviews. Communic these changes to employees, emphasizing the reasons behind them and the potential positive impact on the work environment.

Monitor Progress: Regularly assess the progress of implemented changes and measure their impact on employee satisfaction and performance. This ongoing monitoring allows for adjustments and fine-tuning to ensure continuous improvement.

Provide Feedback Loop: Close the feedback loop by sharing updates with employees on the progress made based on their feedback. This demonstrates that their input is valued and reinforces the idea that office reviews lead to tangible improvements.

Follow-Up Reviews: Schedule regular follow-up reviews to assess the effectiveness of implemented changes and gather further feedback. These reviews allow organizations to track long-term progress and address any emerging issues.

Overcoming Challenges in Office Reviews (300 words)
While office reviews offer numerous benefits, they can also present challenges that need to be addressed. Some common challenges include:

Resistance to Feedback: Employees or managers may be resistant to receiving or providing feedback due to fear, pride, or discomfort. Encourage a culture of openness and ensure that feedback is viewed as a constructive tool for growth and improvement.

Lack of Follow-Through: If feedback is not acted upon or changes are not implemented, employees may lose trust in the review process. It is crucial for organizations to prioritize the implementation of meaningful changes based on feedback received.

Bias and Subjectivity: Reviews may be influenced by biases or personal opinions. To mitigate this, establish clear evaluation criteria, provide training on unbiased feedback, and ensure multiple perspectives are considered.

Insufficient Resources: Organizations may face resource limitations when it comes to implementing changes suggested during office reviews. Prioritize and allocate resources strategically, focusing on initiatives that will have the most significant impact on employee satisfaction and organizational performance.

Conclusion

Office reviews are powerful tools that can drive positive change, enhance employee satisfaction, and improve overall workplace dynamics. By understanding the importance of office reviews, embracing a Office-Reviews.co.uk culture of feedback, and implementing effective review processes, organizations can unlock their full potential and foster an environment of continuous improvement. Remember, successful office reviews are built on open communication, confidentiality, actionable feedback, and a commitment to acting upon the insights gained. By investing in office reviews, organizations invest in their most valuable asset—their employees—and set the stage for long-term success.

5 Essential Elements For Produit dérivé comics





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 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 Derivatives products gamer 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.

The Definitive Guide to Produit dérivé manga





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 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 Derivatives products 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.

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