What are speculators?

Question

In terms of stocks and finance...

Answer 1

Gamblers.

Or, people who buy stocks with absolutely no intention of holding them for the several years that investors need to.

Answer 2

A speculator is someone who expects to profit from price change or change in value.

An investor is someone who hopes to profit from a stream of payments, like interest or dividends.

Most decisions to buy stock are a combination of the two.  If you hope the price goes up, you are speculating.  There is nothing in this definition that limits the time frame to short periods.

Answer 3

any investor is a speculator believing the stock he buys is going to go his way based on fundamental or technical reasons.

from: www.dowteq.com

Answer 4

I think you can learn from all types of investors.  Speculators usually are high risk takers.  Big risk, big reward. I would not suggest that for you.  But, the speculator teaches us all an important lesson:  you are not married to a stock.  You can hold it for five years for good reason (appreciation and dividend income) or as a friend of mine did recently he bought and sold a stock in five minutes.  You do have cut your losses and some people follow strict limits about the loss they will endure before selling.  A stock may bounce back; but, I submit to you that you have to have some rules to go with some research of your own.

Answer 5

In short, any investor is a speculator.  When you invest in a company by purchasing stocks, bonds or even mutual funds (that have that company in its holdings), you are speculating that there will be a change in the company's value.  Similarly, a speculator may puchase commodity contracts or any other item of value that can be traded.

As far as the term "speculation demand," which we are hearing a lot about given the current price of oil, this refers to the influence that speculators have on the price of a stock, bond, commodity, etc.  

EXAMPLE:  Currently, many people (including the folks at Goldman Sachs) are expecting oil to reach $200 / barrel within the next two years.  These expectations lead people to buy oil contracts for later sale at a higher price (this is very "in a nutshell" summary of commodity trading).  The purchase of these contracts imply a higher "speculation demand" for oil which, in turn, leads to higher oil prices.  This demand is over and above the current demand for oil in the world market.

So, to some extent, speculators (when largely in agreement) create the very price increases that they hope to see.

This same pressure can be applied downward when the common view of the valuable is that it will be worth less in the future.

Answer 6

The holding of a stock position for a short duration of time before closing the trade from either a long or short position.

Answer 7

A person who trades derivatives, commodities, bonds, equities or currencies with a higher-than-average risk in return for a higher-than-average profit potential. Speculators take large risks, especially with respect to anticipating future price movements, in the hope of making quick, large gains.

         Speculators are typically sophisticated, risk-taking investors with expertise in the market(s) in which they are trading and will usually use highly leveraged investments such as futures and options.