What Is Speculation? Definition, Risks & Examples

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The Street

By TheStreet.com Staff What Is Speculation?Ready to roll the dice in the stock market? In finance, big risk taking is known as speculation. Traders who speculate invest in assets that have the potential for big gains—as well as big losses. Speculative traders and investors, or speculators, purchase an asset in the hopes that its value will increase in the near term. Conversely, they could also invest in the hopes that an asset will lose value, which is a practice known asshort selling. Unlikefundamental analysis, speculators tend to solely focus on price movement. In the stock market, they pay…

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