Speculative Stock
A general term describing a stock with high risk relative to any potential positive returns. Speculative stocks are often purchased by those who believe the stock will appreciate in value without performing a detailed analysis. Investopedia Says:
Speculative stocks often have a high probability of declining in value and a low probability of experiencing above-average gains. Investors in these types of stock may be overly optimistic about the probability of earning above average gains, or the lure of the above average gains may be enticing enough for them to make a purchase.
Penny stocks are an example of a speculative stock. Related Terms:
Bubble
Penny Stock
Speculation
Speculative Company
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