Speculation
Also called: speculative trading
Taking a risky position mainly to profit from a hoped-for price move, rather than from the underlying value or income of the asset.
Speculation bets on price changes. It is not illegal or always foolish, but it is a different activity from investing in a business, and it carries a high risk of loss, especially when combined with borrowed money or tips.
Buying a share because a chat group says it will double this week is speculation, whatever the person calls it.
Learn more in these lessons
- Investing compared with tradingWhat is the difference between investing and trading?
- Common stock market mythsWhich common beliefs about the stock market are wrong?
- Investing compared with speculationWhat is the difference between investing and speculating?
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