Speculation

Speculation activity in which someone buys and sells things such as stocks or pieces of property in the hope of making a large profit but with the risk of a large loss. It involves trading a financial instrument involving high risk, in expectation of significant returns. It can in principle involve any tradable good or financial instrument. It’s play very important roles in the markets by absorbing excess risk and providing much needed liquidity in the market by buying and selling when other investors don’t participate.