---
title: "The Melamed Revolution: How derivative financial assets conquered the world, Part 5 – Official Olymp Trade Blog"
description: In the third part of our video series, we talk about Leo Melamed and how derivative financial assets conquered the world. Read more on the official Olymp Trade Blog.
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3. [History of derivatives, Part 5: How derivative financial assets conquered the world](https://blog.olymptrade.com/education/history-of-derivatives-part-5-how-derivative-financial-assets-conquered-the-world)
Oct 14, 2022
# History of derivatives, Part 5: How derivative financial assets conquered the world
Learn how Chicago Mercantile Exchange CEO Leo Melamed made his mark on financial history. In this video, we tell the story of the emergence of derivative financial assets that influenced the economic path of mankind. Happy viewing!
[Olymp Trade Team](https://blog.olymptrade.com/education/author/olymp-trade)
Subtitles for video are available in English.
``
## Commodity exchange chief Leo Melamed
This time, we’re taking a step back to the 20th century, when Leo Melamed decided to do something different: hedging currency risks with futures.
When he took over the Chicago Mercantile Exchange, it was in a state of crisis. Seeking ways to reform the way the CME operated, Melamed eventually started trading futures for pig bellies used to make bacon.
At the time, though, this wasn’t considered prestigious or profitable. Then in 1971, the CME CEO, continuing his search for a solution, took advantage of a unique opportunity.
### A bold decision
That year, the United States of America abandoned the gold standard. This came as a shock to the foreign exchange market, but not to Leo Melamed.
He came up with the idea of using futures to hedge not only agricultural risks, but currency risks too. Introduced in 1972, currency futures were the first financial derivatives that were not aimed at ordinary commodities, but other assets too.
Despite the fact that Wall Street tycoons scoffed at Leo Melamed’s initiative, he eventually received legislative support from the government.
Ten years later, in 1982, he took advantage of a strong bullish trend to introduce index futures, which ensured high returns on these derivatives.
### World economic footprint
Melamed created a new market by introducing financial derivatives to the market, which became a key tool for traders in the 1980s.
This was a breakthrough and opened up new opportunities in the world of speculative trading.
If you’re wondering about how the modern history of the financial markets was formed and what’s coming next, stay turned! We’ll be detailing it all in our next video.
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A monetary system in which a currency is pegged to a fixed amount of gold.
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