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 ?
Barclays, accused by the WDM of making PS445million between 2010 and 2012 by speculating on food prices, said the figure had been exaggerated.
When the Prime Minister decides he is going, that is the time for us all to start speculating, and it will be the party that chooses, not a few people like me.
We keep talking and speculating about the return of "better times" only to end up back in the same old place.
A brief section speculating about the music for the masque might also have been in order, if only to follow Peter Walls in warning against placing too much (if any) stock in surviving dance tunes with titles like "The Lord Hays his Masque," "The Lo rd Hayes his first Masque," and "Essex Anticke Masque" (in British Library, Add.
The first people in the "new economy" to take to speculating in shares were the middle class, but millions of impoverished Russians were quickly drawn in.
Speculating on what options are open to the minister, Traficante said there is a wide range of possibilities, from postponing a decision to not signing the agreement.
In a recent broadcast, the Real Estate News Network did a segment on INREEX and its new approach for speculating on the U.
He also hit back at fans critical of the club for not speculating in the transfer market after reaching the UEFA Cup Final in Seville.
That hasn't kept biologists from speculating, however.
Whether people are speculating that because of that the company is doing better than it had been, we don't know,'' he added.
The tax, coupled with other proposals such as increasing the minimum wage, had some people speculating that the new government may end up at odds with the business community.
Reiner stated, "I am pleased to introduce the first book on speculating in the microcap markets, specifically the OTC:BB and Pink Sheets.