What are speculation on the stock market?
The stock market speculation is when the investor buys shares because they believe that the price will go up or down. The value of a shares or company issues shares is devoted to a very small idea. Daily traders are often the largest users of speculation on the stock market; They check dozens of shares every day to determine which of them they think they will increase or reduce the price per day. The trader takes the position in stocks and quickly terminates when the shares reach the expected price or move against the expectations of the merchant. For example, a company facing government fines or regulations, approval of a new pharmaceutical drug, merger or acquisition with another company or a high competitive risk, usually for speculative purchases of shares. Speculators will buy long or short positions in stocks. The long position refers to Alief at higher stock prices when short -circuiting shares means that the speculator hopes that the stock price is falling.
Specilation purchases of shares often have significant risks. Traders usually understand that they can lose their entire balance on certainty when buying shares. The main swing in the opposite direction of the merchant position can quickly delete the full value of the trade. Day merchants often do not see so risky because they can have more positions in different stocks to compensate for any serious losses. These traders are planning more stores that earn a small increase in price to make money.
Many government agencies regulate speculation on the stock market. The ability to sell short shares in large groups can lead to a loss of significant market value. In some cases, non -ethnic traders can shorten shares and then expand negative rumors to companies. This is the result of a profit for a trader in damage to the company. If this happens too often, traders may face and face fines for such shops.
The opposite of speculation on the stock market is inVestice. This strategy is governed by the theory "Buy and Hold". Investors will review shares and determine long -term expectations of shares and issuing companies. Rather than earning a few quick dollars for price movements, the investor will earn money from dividends provided from shareholders or increased long -term prices. This strategy works well for pension accounts or similar types of investment.