LeoGlossary: Speculation

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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.

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.


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