ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -When you trade you can either take delivery or you need not take delivery depending on how quickly the price moves in your favour. But, in speculation there is no intent of taking delivery at all. For example, betting on weather, betting on outcome of major events are all examples of speculation.

Detailed explanation-2: -Speculation is the act of buying or selling assets that have an increased chance of significant losses. Speculation is common among investors who trade penny stocks and over-the-counter (OTC) investments. Speculation should be limited to ensure that long-term financial goals like retirement are not impacted.

Detailed explanation-3: -Speculative stocks are high-risk, high-reward, and tend to appeal to short-term traders. Speculative stocks tend to be clustered into sectors or types: penny stocks, emerging market stocks, rare materials stocks, pharmaceutical stocks, etc.

Detailed explanation-4: -In finance, speculation is the purchase of an asset (a commodity, goods, or real estate) with the hope that it will become more valuable shortly. It can also refer to short sales in which the speculator hopes for a decline in value.