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 ?
After discovering the fraudulent nature of land speculation on the frontier, Philip returns to the East Coast, and then retreats to the hills of Pennsylvania to run a small-scale mining operation.
Research undertaken by CBRE in this sector has revealed that operational costs are extraordinarily high as a share of gross income, and as a result of excessive land speculation, low density compounds with the necessary range of leisure and recreational facilities are extremely difficult to build at a price that would make them competitive with the long-standing compounds already operating in this sector.
In addition, Ingeominas had allowed substantial increases in land speculation by awarding concession titles to individuals that presented the bare minimum of information; presumably with the sole intention of selling them on to other companies.
The NTD's land speculation deal would have, at a minimum, "significantly affect[ed] patterns of land access and use for tens, or even hundreds of thousands of people." Happily however, once the community of Mukaya Payam, in southern South Sudan, learned of the deal, they protested and quickly emerged victorious.
Ma also instructed the Executive Yuan to dampen land speculation by levying two to five times of land price tax on hoarders of vacant land in municipalities with high realty prices.
The result is to encourage land speculation and to undermine the principles of good urban planning.
He said he would keep the location of the project a secret, apparently to avoid possible land speculation in the area.
Then the 1887 federal Alien Property Act was enacted to prohibit the ownership of land by aliens--or by companies more than 20% owned by aliens--in the "territories" (as opposed to the fully fledged states), where land speculation was particularly rampant.
The confirmation of surviving specimens of endangered species, such as the ocelot, in the SPST underscores the call for the Park's preservation, which is located in an area of great land speculation. Since the SPST has no management plan as of yet, the dissemination of the first record of L.
He married Lucy Bakewell a few years later and moved to Kentucky, where he was a jack-of-all-trades, including land speculation and slave trading.
Most developers agree that land prices should represent no more than 30 percent of total development costs, in order to avoid jeopardizing projects, but in many Middle East locations, such as Saudi Arabia, land speculation has driven up prices and made middle- income housing difficult to pursue.