ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Who are the Speculators? Speculators are people who engage in speculative investments. In other words, a speculator is a person who buys assets, financial instruments, commodities, or currencies with the hope of selling them at a profit on a future date.

Detailed explanation-2: -Speculators are sophisticated investors or traders who purchase assets for short periods of time and employ strategies in order to profit from changes in its price. Speculators are important to markets because they bring liquidity and assume market risk.

Detailed explanation-3: -Key Takeaways. Speculation refers to the act of conducting a financial transaction that has substantial risk of losing value but also holds the expectation of a significant gain. Without the prospect of substantial gains, there would be little motivation to engage in speculation.

Detailed explanation-4: -Speculators trade based on their educated guesses on where they believe the market is headed. For example, if a speculator thinks that a stock is overpriced, they may sell short the stock and wait for the price to decline, at which point it can be bought back for a profit.

Detailed explanation-5: -Bull Speculator. People who are bull speculators anticipate an increase in the asset’s price. Bear Speculator. Bears can be known to be the opposite of the first category of speculative individuals we discussed, the bulls. Lame Duck. Stag. 21-Dec-2022