speculation

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Speculation

Purchasing risky investments that present the possibility of large profits, but also pose a higher-than-average possibility of loss. A profitable strategy over the long term if undertaken by professionals who hedge their portfolios to control the amount of risk.

Speculation

An investment with an exceptionally high risk. Speculators may invest in a start-up company or in a volatile commodity. These risks carry the possibility of very high returns. Speculators often trade actively and many have hedging strategies to reduce their risks. See also: Hedge fund.

speculation

The taking of above-average risks to achieve above-average returns, generally during a relatively short period of time. Speculation involves buying something on the basis of its potential selling price rather than on the basis of its actual value.

speculation

the buying and selling of COMMODITIES (tea, tin etc.), FINANCIAL SECURITIES (shares etc.) and FOREIGN CURRENCIES whose market prices are characterized by substantial fluctuations over time, by individuals and firms (speculators) in the hope of making windfall profits. For example, in the STOCK MARKET and FOREIGN EXCHANGE MARKET, a speculator may take a ‘bullish’ view that a share price or the exchange rate of a currency will rise and may gamble on this possibility by buying that share or currency, using either his or her own money or short-term credits, and hoping to resell it at a higher price after a few days or weeks, in order to make a capital gain on the difference between the two prices. On the other hand, the speculator may take a ‘bearish’ view that a share price or currency value will fall and may gamble on this possibility by selling the share or currency (even though he or she does not currently own any), using the proceeds from this sale to buy at a lower price the shares or currency he or she has promised to deliver a week or two later.

Speculative activity may have a destabilizing effect on share prices or exchange rates if speculators take a collective view that prices will rise or fall, accelerating and magnifying upward or downward price movements. Because of the disruptive effects of speculation on international trade, countries' central banks often intervene in the foreign exchange markets to maintain ‘orderly’ exchange rates. See ARBITRAGE, FORWARD MARKET, FLOATING EXCHANGE RATE SYSTEM, STAG, ACCOUNT PERIOD.

speculation

the purchase or sale of ASSETS, real or financial, to achieve a CAPITAL GAIN.

See ARBITRAGE, SPECULATIVE DEMAND FOR MONEY, SPECULATOR.

speculation

Investment decisions based on the hope and expectation there will be a profit, but no firm evidence that this will be the case. As a general rule, the more speculative the venture, the greater the reward should be,commensurate with the risk taken.

References in periodicals archive ?
The original pattern found its way to Texas when Jim and Rezin continued their land speculation.
In 1819, for example, a supporter of Jackson's opponent William Crawford--a political hopeful named Andrew Erwin--published a protest against allegedly illegal land speculation conducted by Jackson and his friend Sen.
Land speculation and a real-estate boom produced sudden millionaires.
Titled Right to Fight, the satirical documentary on Vancouver's housing crisis livens up its earnest interviews with not only wacky game-show parodies but also anti-capitalist tap dance numbers and bouncy cabaret pieces about the evils of unregulated land speculation.
However, in many parts of Latin America (the region with which this reviewer is most familiar), the expansion of agriculture during the twentieth century resulted from land speculation, state-sponsored land colonization, and expanding export markets for products such as cattle, coffee, and cotton--projects that had little to do with feeding hungry mouths.
Overbuilding and land speculation will continue to destroy once-tranquil zones.
I was told, "The church is not in the land speculation business," and that was that.
In the waning days of the campaign, one local newspaper grew so fed up with the lawyer-baiting commercials that it editorialized: "Faircloth's ads use `lawyer' as an epithet, as if Edwards' profession was somehow less honorable than the way Faircloth makes his money--politics, hog feeding, [and] land speculation.
Some REITs cannibalize each other, as occurs when shopping centers "leap-frog" each other, and many of them engage in land speculation.
In 1842, he returned to Hungary to gather up his family and take them to Sauk where they prospered in such ventures as steamboating, lumbering, farming, and land speculation.
Restrictions imposed by the dominance of automotive distribution and the volatile play of land speculation limit the scope of urban design to such a degree that any intervention tends to be reduced either to the manipulation of elements predetermined by the imperatives of production, or to a kind of superficial masking to which modern development seems to gravitate in order to facilitate marketing while maintaining a prerequisite level of social control.