||The English used in this article may not be easy for everybody to understand. (June 2012)|
Speculation has a special meaning when talking about money. The person who speculates is called a speculator. A speculator does not buy goods to own them, but to sell them later. The reason is that he wants to profit from the changes of market prices.
One tries to buy the goods when they are cheap and to sell them when they are expensive. There is a good chance to do that as long as the market price of a good changes often in different directions.
Speculation includes the buying, holding, selling, and short-selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives or any valuable financial instrument. It is the opposite of buying because one wants to use them for daily life or to get income from them (as dividends or interest).
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- Macquarie Bank. Futures - Frequently asked questions.