Definition of Speculation:
Investment in stocks, property, or other ventures in the hope of gain but with the risk of loss.
The forming of a theory or conjecture without firm evidence.
Deliberate assumption of above average (but analyzed, measured, and usually hedged) short-term risk of financial loss, in expectation of above average gain from an anticipated change in prices. Organized speculation (as conducted through commodity and stock exchanges) adds capital and liquidity to financial markets, and helps dampen wild fluctuations in prices in normal times. In times of speculative hysteria or economic/political crises, however, speculation exacerbates price swings and may swamp usual trading activity. In terms of degree of risk assumed, speculation (short-term acquisition of assets) falls between investment (long-term acquisition of assets for income and/or capital appreciation) and gambling (wagering on random outcomes without acquisition of assets). See also arbitrage.
In the world of finance, speculation, or speculative trading, refers to the act of conducting a financial transaction that has substantial risk of losing value but also holds the expectation of a significant gain or other major value. With speculation, the risk of loss is more than offset by the possibility of a substantial gain or other recompense.
An investor who purchases a speculative investment is likely focused on price fluctuations. While the risk associated with the investment is high, the investor is typically more concerned about generating a profit based on market value changes for that investment than on long-term investing. When speculative investing involves the purchase of a foreign currency, it is known as currency speculation. In this scenario, an investor buys a currency in an effort to later sell that currency at an appreciated rate, as opposed to an investor who buys a currency in order to pay for an import or to finance a foreign investment.
Synonyms of Speculation
Conjecture, Theorizing, Hypothesizing, Supposition, Guesswork, Abstraction, Actuarial prediction, Advisement, Agiotage, Analysis, Apocalypse, Arbitrage, Betting, Blind guess, Bold conjecture, Brainwork, Brooding, Buying in, Calculated risk, Cardsharping, Casting lots, Cerebration, Chance, Cogitation, Conjecture, Consideration, Contemplation, Counsel, Deliberation, Doctrinairism, Doctrinality, Doctrinarity, Equity capital, Evaluation, Excogitation, Explanation, Flier, Flutter, Foreboding, Forecast, Forecasting, Foreshowing, Foresight, Foretelling, Fortune, Gamble, Gambling, Gaming, Guess, Guesswork, Hazard, Hazarding, Hunch, Hypothesis, Improbability, Investment, Liquidation, Luck, Lucubration, Meditation, Mere theory, Musing, Omen, Opinion, Perhaps, Play, Playing, Plunge, Pondering, Postulation, Prediction, Prefiguration, Prefigurement, Prefiguring, Presage, Presaging, Presentiment, Preshowing, Presignifying, Prime investment, Probability, Profit taking, Prognosis, Prognostication, Promise, Prophecy, Prophesying, Prospectus, Reflection, Review, Revolving, Risk, Risking, Rough guess, Round trade, Rumination, Scalping, Shot, Soothsay, Sortition, Sporting, Spot sale, Stab, Staking, Statistical prediction, Stockjobbery, Stockjobbing, Study, Studying, Suppose, Supposition, Surmise, Theoretic, Theoretical basis, Theoretics, Theoria, Theoric, Theorization, Theory, Thinking, Turn, Uncertainty, Unverified supposition, Vaticination, Venture, Venture capital, Wager, Wagering, Weighing, Wild guess, Wondering
How to use Speculation in a sentence?
- Speculation refers to the act of conducting a financial transaction that has substantial risk of losing value but also holds the expectation of a significant gain.
- Mr. Smith made a very positive speculation on xyz companies stock, which came as quite a surprise to xyz and lead to their stock price closing higher than it ever has.
- Some times you dont have all of the important information and when you have to make your final decision it really is just pure speculation .
- The companys move into property speculation.
- In terms of the monetary gain of the sales of stocks, it was a huge speculation on the part of the buyer which would return the most money.
- There has been widespread speculation that he plans to quit.
- Without the prospect of substantial gains, there would be little motivation to engage in speculation.
- Consider whether speculation depends on the nature of the asset, expected duration of the holding period and/or amount of applied leverage.
Meaning of Speculation & Speculation Definition