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 classic literature ?
It would be the same with the Beauforts, in spite of his power and her popularity; not all the leagued strength of the Dallas connection would save poor Regina if there were any truth in the reports of her husband's unlawful speculations.
Finding, from the report of the men who had followed the gig, that he had distanced all pursuit, and having therefore no direct clew to his whereabout, they had been obliged to hunt after him in various directions, on pure speculation.
Various emotions and speculations possessed my mind in my retreat; but chiefly did I feel a sense of triumph in being the bearer of exciting news.
At length, after five years, when Mrs Nickleby had presented her husband with a couple of sons, and that embarassed gentleman, impressed with the necessity of making some provision for his family, was seriously revolving in his mind a little commercial speculation of insuring his life next quarter-day, and then falling from the top of the Monument by accident, there came, one morning, by the general post, a black-bordered letter to inform him how his uncle, Mr Ralph Nickleby, was dead, and had left him the bulk of his little property, amounting in all to five thousand pounds sterling.
Granted; as many as you like," he returned, glancing down into her eyes that were full of thoughtfulness and some speculation.
Tis a speculation," said the old gentleman, shaking his head, but at the same time slowly drawing out his purse, "quite a speculation
No sound and legitimate business can be established on a basis of speculation.
Weston naming one family of cousins who must be included, and another of very old acquaintance who could not be left out, it became a certainty that the five couple would be at least ten, and a very interesting speculation in what possible manner they could be disposed of.
In the word "missing" there is a horrible depth of doubt and speculation.
Grant and her sister, that after making up the whist-table there would remain sufficient for a round game, and everybody being as perfectly complying and without a choice as on such occasions they always are, speculation was decided on almost as soon as whist; and Lady Bertram soon found herself in the critical situation of being applied to for her own choice between the games, and being required either to draw a card for whist or not.
The creatures are always going off at a tangent into some fantastic employment, or ridiculous speculation, entirely at variance with the "fitness of things," and having no business whatever to be considered as a business at all.
What this additional fortnight was to produce to her beyond the pleasure of sometimes seeing Henry Tilney made but a small part of Catherine's speculation.