What is speculation? Distinguish between a 'bull' and a 'bear' in a stock exchange.

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**Speculation** is the practice of buying or selling securities purely to profit from **short-term fluctuations in price**, rather than for steady dividend/interest income or reasoned, longer-term capital appreciation the way a genuine investor does. A speculator accepts a considerably higher degree of risk in the hope of a quick, sizeable gain, and a regulated amount of such trading adds useful volume and depth to the market.

Speculators are traditionally distinguished by the direction they expect the market to move:

| Basis | Bull | Bear |
|---|---|---|
| Expectation | Expects prices to RISE | Expects prices to FALL |
| Action taken | Buys securities now at the current (lower) price | Sells securities now (sometimes 'short-sells' shares not yet owned) |
| Later action | Sells later at the expected higher price to book a profit | Buys back later at the expected lower price to book a profit |
| Market named after them | A generally rising market is called a 'bull market' | A generally falling market is called a 'bear market' | …

Q.What is speculation? Distinguish between a 'bull' and a 'bear' in a stock exchange.

Concept understanding — Speculation and Investor Protection

Basis	Bull	Bear
Expectation	Expects prices to RISE	Expects prices to FALL
Action taken	Buys securities now at the current (lower) price	Sells securities now (sometimes 'short-sells' shares not yet owned)
Later action	Sells later at the expected higher price to book a profit	Buys back later at the expected lower price to book a profit
Market named after them	A generally rising market is called a 'bull market'	A generally falling market is called a 'bear market'

Q.What is speculation? Distinguish between a 'bull' and a 'bear' in a stock exchange.

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