Although derivatives are not widely used in Romania, their use is expected to grow over the coming years. Swaps - a swap is the simultaneous purchase and sale of a foreign currency in broadly equal amounts at two different maturity dates. The key aspect of a swap is that the bank arranges it as a single transaction with a single counterpart. This means that the trader does not incur any foreign exchange rate risk since the bank pledges by contract to pay and to receive the same or nearly the same amount of currency at specified rates. Any existing differences are usually accrued interest.
Options differ from all other financial instruments in terms of the patterns of risk they entail.
For this reason, option contracts have a one-sided risk and return. The profits of an option writer are limited to the premiums received, but their potential losses can be unlimited. On the other hand, the potential losses of option holders are limited to the premiums paid while in principle their potential gains can be unlimited. Financial futures provide a means of reducing the risks arising from movements in interest and exchange rates. As mentioned above, derivatives came into use as a result of the attempts to reduce business risks.