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 ?
You can speculate that there must be some bad news from the company that is coming out soon and this will lead the share price to fall.
We shouldn't be surprised that they have a relationship, I would not speculate on what specific operational support they have or whether they are an actual arm.
What we are trying to do is give every single retail investor an opportunity to go out and speculate in the real estate markets without actually having to buy physical property," said Paul Rozenberg, CEO of INREEX, Inc.
Ultimately, it will be up to the democratically-elected government of Mongolia to approve any amendments to Mongolia's mining laws and, while it is premature to speculate as to what the government will eventually decide, Ivanhoe remains confident that the government will act in a manner consistent with the aligned long-term interests of the people of Mongolia and the domestic and international stakeholders in the Mongolian mining industry.
With traders continuing to speculate on the status of petroleum supplies and the potential for change in Saudi Arabia's crude policy, the September contract has slipped higher by 99 cents to $61.
However, a decade ago, scientists began to speculate that T.
Scientists speculate that the impact of PBDEs on humans might be similar.
Dodgers manager Jim Tracy said he won't speculate on when the organization will activate Brown until after the bullpen session.
today announced that its market participants may now hedge or speculate on the direction of home values in major U.
The digestive tracts of both plesiosaurs also contained dozens of gastroliths, stones that paleontologists speculate were used to grind up hard-shelled prey and thereby aid digestion.
Whether a derailment could have been prevented had the train been in front pulling the cars, it's ``too early to speculate what could have occurred or what could have prevented anything,''said Keith Holloway, National Transportation Safety Board spokesman in Maryland.
This prospect has led many observers to speculate on how they should invest in a rising-interest-rate environment.