LeoGlossary: Speculation

6 mo (edited)
LeoFinance
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In the financial world, speculation is the purchase of an asset based upon anticipated price movements. Those engaging in this are rarely concerned with fundamentals. The goal is to capture large moves in the market for gain.

Assets that people typically speculate upon:

This is considered high risk as markets can often move in the opposite direction as expected. Thus, if someone is long an asset, a decline in price will result in a loss. A similar result is realized if one is short the asset yet it moves up in price.

People often look to maximize their return by leveraging up their speculative investment/trade. This is often done through the use of derivatives, which can also be used to hedge a position.

General:

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