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 ?
There's always going to be press speculation and stuff about other jobs, but my focus has always been on achieving something with this club.
Global biometrics company Fingerprint Cards AB (STO:FINGB) announced on Thursday that it has noted the media and market speculation regarding the preparation of a possible takeover bid for the company's shares.
Vice Prime Minister Musa Xhaferi elaborated on the last audio recordings leaked in the social media and on the speculations that he will resign from function, for "Zhurnal".
Chilean Pellegrini, who took over at City in 2013, said he had informed his players to avoid any speculation regarding his future.
The central bank of Azerbaijan has said that it will curb currency speculation on holidays.
If you are a young lad I would rather be listening to speculation about lots of big clubs wanting to sign you than absolutely no speculation at all and no one interested in you," said Rowett (below).
Toure's agent Seluk sparked speculation about his future just days after City lifted the Barclays Premier League title - claiming Toure was hurt by the club's failure to mark his birthday despite a video on the club's website showing Toure being presented with a birthday cake.
Toure's agent Seluk sparked speculation about his future just days after City lifted the Premier League title - claiming Toure was hurt by the club's failure to mark his birthday - despite a video on the club's website showing Toure being presented with a birthday cake.
And actual domestic production, which had been falling for decades, actually stopped decreasing from 2006 to 2008, and then increased in 2009, which is also not consistent with speculation through withholding of production.
Summary: Gold fell below $1,400 an ounce on Friday on speculation any United States military strike on Syria was less likely and as strong US data rekindled speculation of a Federal Reserve's stimulus withdrawal soon.
Thiruvananthapuram: Kerala's ruling United Democratic Front, beleaguered by the solar power scam, has a new issue to handle, with speculation rife in political circles that Kerala Congress leader K.