SPECULATION,TYPES OF SPECULATOR,FUNCTIONS & THEIR ROLE IN STOCK MARKET
A PRESENTATION ON SPECULATION,TYPES OF SPECULATOR,FUNCTIONS & THEIR ROLE IN STOCK MARKETPresented to, Presented by,Prof. R.K.RAUL Janmajit Debnath(13)HOD,JNSMS Sanjib Paul(18) Ishan Dutta(26)ASSAM UNIVERSITY Mritunjoy Deb(28) Biplab Dey(34) Dhruba Debnath(43) Ratnadeep Paul(45)
IntroductionSpeculation is a financial action that does not provide safety of initial investment along with the return on the principal sum.
Speculation typically involves the lending of money for the purchase of assets, equity or debt but in a manner that has not been given thorough analysis or is deemed to have low margin of safety or a significant risk of the loss of the principal investment.
In simple words, Speculation isthe activity of Speculators. The activity of the speculatorsleads to taking position in thestock market for a short periodof time.
Speculation vs InvestmentThe term “speculation” contracts with the term “investment”, which is a financial operation that, upon thorough analysis, promises safety of principal and a satisfactory return.
Basis Investor SpeculatorPlanning Horizon Longer planning horizon Shorter planning horizonRisk Disposition Not willing to assume Willing to assume high more than moderate risk riskReturn Modest rate of return High rate of returnExpectationBasis for decision Fundamental Hearsay,technical factors,careful charts,market evaluation of the psychology prospects of the firmLeverage Uses his own funds & Resorts to borrowing eschews borrowed funds