Terms

Speculation

Speculation

Speculation or Speculative Trading is the act of conducting a financial transaction that has a substantial risk of losing value but also holds the expectation of a significant gain or other major value. It simply involves trading a financial instrument involving high risk, in expectation of significant returns, to take maximum advantage from fluctuations in the market. Consider whether speculation depends on the nature of the asset, expected duration of the holding period and/or amount of applied leverage.

  • Some say that a good speculation should offer 10x gains
  • Speculations are risky and should only be for money one can afford to lose - not core investments