Speculation
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| - | In [[finance]], '''speculation''' is the purchase of an asset (a [[commodity]], [[good (economics)|good]]s, 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.) | + | In [[finance]], '''speculation''' is the purchase of an asset (a [[commodity]], [[good (economics)|good]]s, or [[real estate]]) with the hope that it will become more [[valuable]] in the near [[future]]. |
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| - | Many speculators pay little attention to the [[fundamental value]] of a security and instead focus purely on price movements.{{citation needed|date=January 2022}} In principle, speculation can involve any tradable good or [[financial instrument]]. Speculators are particularly common in the markets for [[stock]]s, [[bond (finance)|bonds]], [[commodity futures]], [[currency|currencies]], [[fine art]], [[collectible]]s, [[real estate]], and [[derivative (finance)|derivatives]]. | + | |
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| - | Speculators play one of four primary roles in financial markets, along with [[hedge (finance)|hedgers]], who engage in transactions to offset some other pre-existing risk, [[arbitrage]]urs who seek to profit from situations where [[Fungibility|fungible]] instruments trade at different prices in different market segments, and [[investor]]s 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]]. | 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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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.
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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