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 slug taking the hit slows down, so Anthes speculates that the syringelike prong injects a sedative.
Tardif speculates that Canadian companies are discouraged by the cost of exporting to Europe, as well as by differences in product standards and tastes.
Wegman is not afraid to speculate about mysterious causes that may lie behind - and the equally mysterious meaning that may lie within - the neutral notes on the page.
Cook also speculates that Western Europe wheat output could be affected by the environmental movement, which may create a backlash against the high level of fertilizer used.
However, he speculates, "fluorescence is likely to be a weak color cue compared to the visual signals reflected by pigments in full daylight.
Although yet unproven, we speculate that the potential gas in place in the mapped area is in the range of three trillion cubic feet, which would be a bonanza for our investors and a boon to consumers who are increasingly dependent on imported natural gas and oil to support their abundant lifestyle.
TVOG speculates an unproved potential of up to 125 million barrels of oil and up to 375 billion cubic feet of natural gas from the multiple targets.
Without the cell-preserving actions of IKK-beta, pre-cancerous cells died before tumors were even initiated, Karin speculates.
Because of the intense nature of a police interrogation, stressed truth tellers may display the same behaviors as liars do, Vrij speculates.
Thery speculates that the first dendritic cells to encounter an infectious microbe produce exosomes bearing microbial antigens as messages to other dendritic cells, sparking a chain reaction that amplifies and perhaps speeds the overall immune response.
Since MC1R resembles that protein, O'Brien speculates that thousands of years ago, an infectious agent that exploits the receptor caused an epidemic in jaguars and jaguarundi.
In accordance with that view, Payne speculates that early farmers in England primarily used milk to make lower-lactose dairy products, at least until widespread biological tolerance for the sugar had evolved.