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 ?
"Despite his statement speculation has however continued particularly since the Daily Mail newspaper reported that Wanyama didn't want to move abroad last summer as this would have prevented him obtaining British citizenship which he is now entitled to having lived in the UK for more than six years.
"As policy we don't comment on rumour and speculation"."
"There is speculation the rupee will depreciate to 165-170 against the US dollar in the inter-bank market as per IMF's conditions," Exchange Companies Association of Pakistan (ECAP) Secretary General Zafar Paracha said.
But a Corrie spokesman told our sister paper, The Mirror: "Katie is fully committed to playing out the extremely important storyline she is currently portraying speculation to the viewers Street on screen.
A source working on the show has strongly denied the suggestions, and said they are pure speculation.
The country cannot overcome economic problems unless speculation is discouraged and industrialization is preferred over everything else, he added.
The author examines how financial speculation aligns itself with speculative or aesthetic judgment in art in contemporary capitalism and how that plays out in the production and mediation of art, focusing on how the boundary between art and labor has been tested and displaced, noting that art emerges as a category of human activity in capitalist modernity out of the division of labor instituted by processes of rationalization and industrialization, and the accompanying modes of class formation.
Sohn Hye-won, Monday, who left the Democratic Party of Korea, Sunday, as an "icon of property speculation," on a radio show.
'Again, this could be mere speculation and rumours.
Were tackling this housing crisis head-on and the speculation and vacancy tax is an essential piece in our plan.
I have been in Mombasa for two weeks and there has been too much speculation on why I am here, so wacha nirudi Nairobi ndio wawache mambo ya speculation (so let me go back to Nairobi so they can stop the),' Uhuru said.
Gerrard has already taken Liverpool youngster Ovie Ejaria with him to Rangers, and speculation has continued about his next signing, with several Reds players linked with a move.