Speculation
From The Art and Popular Culture Encyclopedia
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In finance, speculation is the purchase of an asset (a commodity, goods, or real estate) with the hope that it will become more valuable in the near future. (It can also refer to short sales in which the speculator hopes for a decline in value.)
Many speculators pay little attention to the fundamental value of a security and instead focus purely on price movements.Template:Citation needed In principle, speculation can involve any tradable good or financial instrument. Speculators are particularly common in the markets for stocks, bonds, commodity futures, currencies, fine art, collectibles, real estate, and derivatives.
Speculators play one of four primary roles in financial markets, along with hedgers, who engage in transactions to offset some other pre-existing risk, arbitrageurs who seek to profit from situations where fungible instruments trade at different prices in different market segments, and investors who seek profit through long-term ownership of an instrument's underlying attributes.
Metaphorically, it refers to the act or process of reasoning a priori from premises given or assumed, a conclusion to which the mind comes by speculating; mere theory; notion; conjecture.
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