Critics have long claimed that the financial services sector has become too bloated and complex. But with complexity comes profit. In the third part of this series, David Grossman looks at the byzantine worlds of derivatives and high-frequency trading.

Derivatives began as a way of protecting businesses against unexpected developments like a bad harvest. But this practice, known as 'hedging', now represents just a small fraction of the total market. Derivatives are now the product of choice for speculators looking to place vast bets on everything from the price of gold to pork bellies. But the market has become so complex and tangled that it led one of the world's most successful investors to dub them 'financial weapons of mass destruction'. They have been at the heart of scandals from Enron to the sub-prime mortgage bubble that precipitated the crash of 2008. But they remain hugely lucrative for the banks. David Grossman finds out why and hears from the small businesses who were mis-sold products designed to protect them against fluctuations in interest rates but which turned out to be costly bets that they lost and the banks won.

The programme also assesses the growth of high-frequency trading, where computers compete to beat the market and where trades are performed automatically at breakneck speed. But if the computers are winning, who is losing? David Grossman investigates and talks to former industry insiders about how high-frequency traders seek an edge over the rest of the market. Show less