The Single Best Strategy To Use For can you freeze ranch dressing

Cherry chip cake is a delightful treat that combines the sweetness of cherries with a moist and fluffy cake base. This guide will walk you through the step-by-step process of making a homemade cherry chip cake that is sure to impress your friends and family. With a few key ingredients and some simple techniques, you'll be able to create a mouthwatering dessert that will be the highlight of any occasion. So, let's get started!

Preparing the Batter

To begin, preheat your oven to 350°F (175°C) and grease and flour two 9-inch round cake pans. In a large mixing bowl, combine the flour, sugar, baking powder, and salt. Mix them together until well combined. Add the softened butter to the dry ingredients and mix until the mixture resembles coarse crumbs.

Adding Wet Ingredients

In a separate bowl, whisk together the milk, vanilla extract, and almond extract. Gradually pour this mixture into the dry ingredients, mixing well after each addition. If desired, add a few drops of red food coloring to give the cake a vibrant pink color. Stir in the chopped maraschino cherries and mini chocolate chips, ensuring they are evenly distributed throughout the batter.

Incorporating Egg Whites

In another bowl, beat the egg whites until stiff peaks form. Gently fold the beaten egg whites into the cake batter, using a spatula or wooden spoon. Be careful not to overmix, as this can deflate the airiness of the egg whites and result in a denser cake.

Baking the Cake

Divide the batter equally between the prepared gluten free donuts baked cake pans. Smooth the tops with a spatula to ensure even baking. Place the pans in the preheated oven and bake for approximately 25-30 minutes, or until a toothpick inserted into the center of the cakes comes out clean. Rotate the pans halfway through baking for even cooking. Once baked, remove the pans from the oven and allow the cakes to cool in the pans for about 10 minutes. Then, transfer them to a wire rack to cool completely.

Frosting and Assembly

Once the cakes have cooled, it's time to frost and assemble your cherry chip cake. You have the option to use either whipped cream or cream cheese frosting. Whipped cream adds a light and airy touch, while cream cheese frosting offers a tangy and rich flavor. Choose your preferred frosting and spread a generous layer over one cake layer. Place the second cake layer on top and frost the entire cake, ensuring it is evenly covered.

Decorating and Serving

To enhance the visual appeal of your cherry chip cake, consider decorating it with additional maraschino cherries or chocolate shavings. You can also add a sprinkle of mini chocolate chips for an extra burst of flavor. Once decorated, refrigerate the cake for at least an hour before serving. This allows the flavors to meld together and the frosting to set. Slice the cake into beautiful portions and serve chilled.

Conclusion:

Making a cherry chip cake from scratch is a rewarding and delicious endeavor. By following this step-by-step guide, you'll be able to create a moist and flavorful cake that is filled with the delightful combination of cherries and chocolate. Whether it's for a birthday, celebration, or simply a sweet treat, this homemade cherry chip cake is sure to impress and leave everyone wanting more. So, put on your apron, gather your ingredients, and embark on a baking adventure to create a delightful cherry chip cake that will be enjoyed by all.

The best Side of strawberry cake strain



Cannabis genetics play a crucial role in determining the unique characteristics and effects of different cannabis strains. As the cannabis industry continues to grow, it has become increasingly important for both medical and recreational users to understand the genetics behind the plants they consume. In this comprehensive guide, we will delve into the world of cannabis genetics and explore some of the best strains available today. From legendary classics to innovative hybrids, these strains showcase the diversity and potential of cannabis genetics.

Understanding Cannabis Genetics:

Cannabis genetics refer to the specific combination of genes that determine the plant's traits, such as growth patterns, cannabinoid profiles, aroma, and flavor. Cannabis is typically classified into three main subspecies: Cannabis sativa, Cannabis indica, and Cannabis ruderalis. Each subspecies has unique characteristics and is often bred together to create hybrid strains that offer a combination of desirable traits.

Classic Strains:

Northern Lights: One of the most iconic strains, Northern Lights is renowned for its potent relaxation and euphoric effects. It originated from the Afghani and Thai landrace strains, resulting in a well-balanced hybrid that offers a soothing body high and a clear-headed mental experience.

Skunk #1: Skunk #1 is a legendary strain that has paved the way for countless hybrid varieties. Known for its pungent aroma and powerful cerebral effects, Skunk #1 is a genetic cross of Afghani, Acapulco Gold, and Colombian Gold. It offers a stimulating high combined with a relaxing body buzz.

Haze: Haze strains are revered for their energetic and creative effects. These sativa-dominant hybrids often feature a combination of South American, Thai, and Indian landrace genetics. Haze strains are cherished for their uplifting properties, making them popular among artists, musicians, and those seeking a boost of motivation.

High-CBD Strains:

CBD-rich strains have gained significant popularity in recent years due to their potential therapeutic benefits without the psychoactive effects associated with THC. Some notable high-CBD strains include:

Charlotte's Web: Developed specifically for its high CBD content, Charlotte's Web gained international attention as a treatment for epilepsy. It contains minimal THC and offers a gentle, calming effect alongside potential therapeutic properties.

ACDC: ACDC is a sativa-dominant strain known for its remarkably high CBD to THC ratio. It provides a relaxed and clear-headed experience, making it suitable for daytime use. ACDC has gained recognition for its potential analgesic and anti-inflammatory effects.

Hybrid Innovations:

Hybrid strains have opened up a world of possibilities by combining the best traits of different subspecies. Here are some noteworthy hybrid innovations:

Girl Scout Cookies (GSC): GSC is a popular hybrid that blends Durban Poison and OG Kush genetics. It offers a sweet and earthy flavor profile along with potent euphoric and relaxing effects. GSC has inspired a range of "Cookie" strains that continue to captivate cannabis enthusiasts.

Gorilla Glue #4: Known for its sticky resin production, Gorilla Glue #4 is a cross between Chem's Sister, Sour Dubb, and Chocolate Diesel. It delivers heavy-hitting euphoria and relaxation, making it a favorite among experienced users seeking powerful effects.

Landrace Strains:

Landrace strains are cannabis varieties that have developed naturally in specific regions, adapting to the local environment over time. These strains often possess unique characteristics and provide a glimpse into the plant's origins. Some notable landrace strains include:

Afghani: Originating from the Hindu Kush mountain range, Afghani is a pure indica strain with a reputation for its relaxing and sedating properties. It serves as a foundation for many popular indica-dominant hybrids.

Durban Poison: Hailing from South Africa, Durban Poison is a pure sativa strain renowned for its uplifting and energizing effects. It offers a sweet and spicy aroma and is highly regarded among connoisseurs for its cerebral stimulation.

Conclusion:

Understanding cannabis genetics is essential for both growers and consumers who seek specific effects and flavors from their cannabis strains. From classic strains that have stood the test of time to innovative hybrids and CBD-rich cultivars, the world of cannabis genetics offers a diverse range of options to suit every preference. By exploring the genetic makeup of different strains, users can make informed choices and miracle alien cookie find the cannabis genetics that align with their desired experiences and therapeutic needs.

New Step by Step Map For Vape coil replacements online

In recent years, vaping has gained significant popularity as an alternative to traditional smoking. With numerous options available in the market, selecting the right vape kit can be overwhelming for beginners and experienced vapers alike. This comprehensive guide aims to provide you with a detailed understanding of vape kits, their components, different types, and factors to consider before making a purchase. By the end, you'll be equipped with the knowledge needed to choose a vape kit that suits your preferences and vaping style.

What is a Vape Kit?

A vape kit, also known as an electronic cigarette or e-cigarette, is a device that vaporizes a liquid solution, known as e-liquid or vape juice, into an inhalable vapor. It typically consists of a battery, a heating element (coil), a tank or cartridge to hold the e-liquid, and various controls and safety features.

Components of a Vape Kit:

Battery:

Vape kits are powered by rechargeable batteries, which provide the energy needed to heat the coil. Batteries can be internal (built-in) or external, and their capacity determines the overall battery life.

Coil:

The heating element, often referred to as a coil, is responsible for vaporizing the e-liquid. Coils are available in different resistances, which affect the amount of vapor produced and the intensity of the throat hit.

Tank/Cartridge:

The tank or cartridge holds the e-liquid and connects to the coil. Tanks come in various sizes and materials, such as glass or plastic. They can be refillable or disposable, depending on the type of vape kit.

Controls:

Advanced vape kits often feature control buttons, screens, and settings to adjust parameters like wattage, temperature, and airflow. These controls allow vapers to customize their vaping experience.

Types of Vape Kits:

Cigalikes: Cigalikes resemble traditional cigarettes in size and shape, making them an ideal choice for beginners. They are usually disposable and pre-filled with e-liquid.

Vape Pens: Vape pens are slim, cylindrical devices with a larger battery and a refillable tank. They offer more customization options and are suitable for both beginners and intermediate vapers.

Pod Systems: Pod systems consist of a battery and a removable pod that contains the coil and e-liquid. They are compact, user-friendly, and are available in both pre-filled and refillable versions.

Box Mods: Box mods are larger and more powerful devices with advanced features. They have replaceable batteries and offer extensive customization options, making them suitable for experienced vapers.

Factors to Consider When Choosing a Vape Kit:

Vaping Style: Consider your vaping style and preferences. Are you Best online vape store usa a beginner looking for simplicity or an experienced vaper seeking customization options? This will help you determine the type of vape kit that suits you best.

Battery Life: Evaluate the battery capacity and lifespan of the vape kit. A larger battery capacity is ideal for those who vape frequently or at higher wattages, as it ensures longer usage time between charges.

E-Liquid Compatibility: Check the vape kit's compatibility with different types of e-liquids, such as freebase nicotine or nicotine salts. Some devices are designed specifically for one type of e-liquid, while others offer versatility.

Coil Options: Consider the availability and variety of coil options for the vape kit. Different coils offer varying resistances and heating materials, resulting in different vaping experiences.

Ease of Use: For beginners, user-friendly vape kits with simple operation and maintenance are recommended. Advanced vapers may prefer devices with more features and customization options.

Budget: Set a budget and explore vape kits within your price range. Remember to consider long-term costs, such as replacement coils and accessories.

Safety Considerations:

Quality and Brand Reputation: Choose vape kits from reputable brands that prioritize safety and quality control. Avoid purchasing counterfeit or low-quality devices.

Battery Safety: Follow proper battery safety practices, such as using the recommended charger, avoiding overcharging, and using batteries in good condition.

E-Liquid Safety: Purchase e-liquids from trusted sources that adhere to safety standards and provide detailed ingredient information.

General Safety Tips: Familiarize yourself with general safety precautions, such as keeping vape kits away from children and pets, avoiding exposure to extreme temperatures, and proper storage of e-liquids.

Conclusion:

Selecting the right vape kit is a crucial step for an enjoyable and safe vaping experience. By understanding the components, different types of vape kits, and considering factors such as vaping style, battery life, and safety, you can make an informed decision. Remember to choose reputable brands, prioritize safety, and explore the vast array of options available. With the right vape kit in hand, you can embark on a satisfying vaping journey tailored to your preferences.

Derivatives products cinema - An Overview





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 Derivatives products mangas 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.

A Review Of Derivatives products gamer





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 Derivatives products comics 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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