speculation

noun
spec·​u·​la·​tion | \ ˌspe-kyə-ˈlā-shən How to pronounce speculation (audio) \

Definition of speculation

: an act or instance of speculating: such as
a : assumption of unusual business risk in hopes of obtaining commensurate gain
b : a transaction involving such speculation

Keep scrolling for more

Synonyms & Antonyms for speculation

Synonyms

adventure, chance, crapshoot, enterprise, flier (also flyer), flutter [chiefly British], gamble, throw, venture

Antonyms

sure thing

Visit the Thesaurus for More 

Examples of speculation in a Sentence

He dismissed their theories as mere speculation. The book is just a lot of idle speculation about the future. Her speculations leave many questions unanswered. He lost everything in foolish land speculation.
See More

Recent Examples on the Web

Agree with it or not, this is the just kind of challenging speculation that science fiction has always been about, and which makes the genre valuable as such. Andrew Liptak, The Verge, "An artist on creating the retro art for a new edition of Robert Heinlein’s Starship Troopers," 9 Dec. 2018 Later, Baldwin was reportedly crying at a restaurant, sparking speculation of trouble between the young golden couple. Michelle Ruiz, Vogue, "Now We Know Why Justin Bieber Was Crying in Public," 9 Aug. 2018 At the time, there was already widespread speculation that the Guccifer 2.0 account might be connected to the Russian government. Rosalind S. Helderman And Manuel Roig-franzia, chicagotribune.com, "Charges against Russian officers intensify spotlight on Trump adviser Stone," 13 July 2018 Velasquez muted any speculation that De Los Santos could nudge him from the rotation by flashing a mid-90s fastball and mixing in his secondary pitches in his first start since getting hit on the forearm by a line drive June 30. Scott Lauber, Philly.com, "Phillies' Maikel Franco making a play to stay | Extra Innings," 12 July 2018 The hospital has acknowledged a higher death rate around that time, raising speculation that the poisoning may have been systematic and more widespread. Washington Post, "Japan police search home of nurse in hospital poison deaths," 12 July 2018 DaSilva's account is the first from a Republican and could help quell speculation among some Hill supporters that the accusations are part of a Democratic effort to undermine a conservative statewide officeholder. Ryan Martin, Indianapolis Star, "GOP staffer speaks on groping allegations against Attorney General Curtis Hill," 12 July 2018 Since his election, however, Lopez Obrador has gone out of his way to strike a conciliatory tone and discourage speculation that his government would act in a precipitous manner. Patrick J. Mcdonnell, latimes.com, "Mexico's Lopez Obrador taps longtime loyalist as nominee for top diplomat and invites Trump to inauguration," 6 July 2018 On Thursday, the third straight day of relatively little rain at the cave complex raised speculation that Thai officials were considering a hurried evacuation attempt. New York Times, BostonGlobe.com, "Good weather, tough circumstances in Thailand cave rescue," 5 July 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'speculation.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

See More

First Known Use of speculation

14th century, in the meaning defined above

Keep scrolling for more

Learn More about speculation

Share speculation

Statistics for speculation

Last Updated

15 Mar 2019

Look-up Popularity

Time Traveler for speculation

The first known use of speculation was in the 14th century

See more words from the same century

Keep scrolling for more

More Definitions for speculation

speculation

noun

Financial Definition of speculation

What It Is

Speculation is a method of short-term investing whereby traders essentially bet on the direction an asset's price will move.

How It Works

Technically, anyone who buys or shorts a security with the expectation of a favorable price change is a speculator. For example, if a speculator believes XYZ Company stock is overpriced, they may short the stock, wait for the price to fall, and make a profit. It's possible to speculate on virtually every security, though speculation is especially concentrated in the commodities, futures, and derivatives markets.

But to really understand speculation, one must understand how it differs from hedging. Let's consider an example: let's assume part of your investment portfolio includes shares of Company XYZ, which manufactures autos. Because the auto industry is cyclical, Company XYZ shares will probably decline if the economy starts to deteriorate.

If you want to protect this investment -- that is, you want to hedge your investment -- one way to do that is to buy defensive stocks. You may choose "noncyclicals," or companies that sell basic necessities like toothpaste or toilet paper. During economic slumps, these stocks tend to hold or increase their value, which could offset the loss in value of the XYZ shares.

A speculator wouldn't follow this strategy. If a speculator purchased food-company stocks, he would do so because he simply believes the stock is going to increase.

Speculation can increase short-term volatility (and thus, risk). It can inflate prices and lead to bubbles, as was the case in the 2005-2006 real estate market in the United States. Speculators who were betting that home prices would continue to increase purchased houses (often using leverage) intending to "flip" them for a profit. This increased the demand for housing, which raised prices further, eventually taking them beyond the "true value" of the real estate in many markets. The frenzied selling that ensued is typical for speculative markets.

Why It Matters

Some people may see speculators as dangerous gamblers, but speculators actually provide much-needed liquidity to markets and are thus a vital component of market efficiency. Without them, many commodities markets, for example, would virtually grind to a halt because the only participants would be farmers and food companies. With fewer participants in a market, bid-ask spreads would widen and it would be much harder for buyers and sellers to find each other. The resulting illiquidity would dramatically increase the risk in that market.

Source: Investing Answers

speculation

noun

English Language Learners Definition of speculation

: ideas or guesses about something that is not known
: 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

speculation

noun
spec·​u·​la·​tion | \ ˌspe-kyə-ˈlā-shən How to pronounce speculation (audio) \

Kids Definition of speculation

2 : the taking of a big risk in business in hopes of making a big profit

Keep scrolling for more

speculation

noun
spec·​u·​la·​tion | \ ˌspe-kyə-ˈlā-shən How to pronounce speculation (audio) \

Legal Definition of speculation

: an act or instance of speculating: as
a : assumption of unusual business risk in hopes of obtaining commensurate gain
b : a transaction involving such speculation

Keep scrolling for more

Comments on speculation

What made you want to look up speculation? Please tell us where you read or heard it (including the quote, if possible).

WORD OF THE DAY

grandiloquent, ostentatious, or bombastic

Get Word of the Day daily email!

Test Your Vocabulary

Original Meanings Quiz

  • rembrandt-painting-a-young-scholar-and-his-tutor
  • Which of the following is the earliest known sense of the word awe?
Name That Thing

Test your visual vocabulary with our 10-question challenge!

TAKE THE QUIZ
Citation

Test Your Knowledge - and learn some interesting things along the way.

TAKE THE QUIZ

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!