Q.What is Speculation?

Speculation is the purchase or sale of securities to profit from future price movements, involving a deliberate acceptance of risk.

On a stock exchange, speculation refers to transactions entered into not to hold securities as long-term investments, but to gain from the rise or fall in their prices over a short period.

Key features:

• The speculator studies market trends and takes a risk on the direction of prices.
• A speculator who expects prices to rise and buys is called a 'bull'; one who expects prices to fall and sells is called a 'bear'. …