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SPECULATIVE
What is speculation
Speculation typically involves the lending of
money or the purchase of assets, equity or
debt but in a manner that has not been given
through analysis or is deemed to have low
margin of safety or a significant risk of the loss
of the principal investments.
In a financial context, the terms "speculation"
and "investment" are actually quite specific.
How speculation is done..
1.Option Dealing for hedging
Options are used for hedging purpose to limit the loss in
portfolio. Thus hedging is a device which protects against
losses due to price fluctuation.
2. Wash Sales
It is a device by which a speculator is able to reap huge
profits by creating misleading pictures in the market.
Actually it’s a fictitious transaction in which member sells
huge quantity and buy the same from other brokers.
3. Cornering
It refers to the process of holding the entire supply of a
particular security by an individual or a group of individuals
with a view to dictate the short-seller and earn profits by
catching short seller.
Contd.
4. Rigging the market
5. Blank Transfer