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 ?
We could also speculate he thinks he is qualified to be a marriage guidance counseller.
Speculate hassle free: Binary options allow traders to speculate on whether the underlying market price will increase or decrease in value without the need to buy or sell the underlying asset itself.
Summary: Joe Calzaghe has refused to speculate about rumours he is dating his Strictly Come Dancing partner.
He added: "I can't speculate on what different or further decisions the company are going to make.
Given the available data, we can't really speculate about possible interactions," says Brown, "nor do we know what underlying mechanisms might cause interactions between risk factors.
Likewise, one can only speculate now as to what type of system will be used in the year 2500 to read the same human-readable microfilm and possibly send it to a settlement on Mars.
how long it took to dream up such hilarious ideas as getting Maureen from Driving School and Jeremy from Airport to sit in a park to see who's recognised first (you could also speculate whether Jeremy would be arrested before he was recognised - or whether Maureen would be mistaken for Les Dawson).
12) Imaginative in using his sources to yield insight into the dreams and hopes of his settlers as well as their material existence, unafraid to speculate, sensitive to the nuances of non-quantitative sources, May has written an excellent and insightful book.
What Yale Realty Services does is not unique, Paprin said, but real estate is a hedge guess against inflation and one can only speculate about the success of a shopping center's potential.
Competitors speculate that Dow blends a variety of butadiene rubber together (conventional HIPS is made with low-cis butadiene rubber) and possibly other rubbers as well.
Small wonder, then, that University of Tennessee economist Paul Davidson was moved to speculate, in a recent issue of The Nation, that it might not have made much economic difference "if President Bush had been re-elected and done nothing to change either the tax structure or the spending pattern of the Federal Government in 1993.
During the past year, at various gatherings celebrating the centennial of the 1891 law that created the national forests, I was asked to speculate about the future of these public lands.