BREAKING DOWN 'Speculation'
after fed decision we can see some speculations in financial markets
also can benefit to majors traders
It may sometimes be difficult to distinguish between speculation and investment, and whether an activity qualifies as speculative or investing depends on a number of factors
Speculation has its benefits in a free economy. By their willingness to assume the other side of the trade (for a price, of course), speculators provide market liquidity and narrow the bid-ask spread, enabling producers to hedge price risk. Speculative short-selling may also keep rampant bullishness in check and prevent the formation of asset price bubbles.
after fed decision we can see some speculations in financial markets
also can benefit to majors traders
It may sometimes be difficult to distinguish between speculation and investment, and whether an activity qualifies as speculative or investing depends on a number of factors
Speculation has its benefits in a free economy. By their willingness to assume the other side of the trade (for a price, of course), speculators provide market liquidity and narrow the bid-ask spread, enabling producers to hedge price risk. Speculative short-selling may also keep rampant bullishness in check and prevent the formation of asset price bubbles.