Speculation
The process of selecting investments with higher risk in order to profit from an anticipated price movement. Investopedia Says:
Speculation should not be considered purely a form of gambling, as speculators do make an informed decision before choosing to acquire the additional risks. Additionally, speculation cannot be categorized as a traditional investment because the acquired risk is higher than average.
More sophisticated investors will also use a hedging strategy in combination with their speculative investment in order to limit potential losses. Related Terms:
Hedge
High Flier
Speculation Index
Speculative Capital
Speculative Flow
Speculator
Spread Betting
Take a Bath
Take a Flier
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