What is Speculation?
{{Wiktionary|speculation}} '''Speculation''' has a special meaning when talking about money. The person who speculates is called a '''speculator'''. A speculator does not buy [[Goodsprings, Nevada|goods]] to own them, but to sell them later. The reason is that he wants to make a [[profit]] from the change in [[price]]. One tries to buy the goods when they are cheap and to sell them when they are expensive. There is a good chance to profit as long as the market price changes often in different directions. Speculation includes the [[trade|buying, holding, selling, and short-selling]] of [[stock]]s, [[bond (finance)|bonds]], [[commodity|commodities]], [[currency|currencies]], [[collectible]]s, [[real estate]], [[derivative (finance)|derivatives]] or any [[investment]]. It is the opposite of buying because one wants to use them for daily life or to get [[income]] from them (as [[dividend]]s or [[interest]]). Speculation is one of the biggest [[market]] roles in western [[Financial market|financial markets]]. The others are [[Hedge fund|hedging]], long term [[investing]] and [[arbitrage]]. Speculators do not plan to keep an [[asset]] for a long time.<ref>Macquarie Bank. [http://personal.macquarie.com.au/personal/products/shares/futures/futures_faq.htm#9 Futures - Frequently asked questions] {{Webarchive|url=https://web.archive.org/web/20061118112838/http://personal.macquarie.com.au/personal/products/shares/futures/futures_faq.htm#9 |date=2006-11-18 }}.</ref> == References == {{wikiquote-en}} {{reflist}} {{Financial markets navigation}} {{stub}} [[Category:Finance]]