speculation

noun
spec·u·la·tion | \ˌspe-kyə-ˈlā-shən \

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

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Synonyms & Antonyms for speculation

Synonyms

adventure, chance, enterprise, flier (also flyer), gamble, throw, venture

Antonyms

sure thing

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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.
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Recent Examples on the Web

On Wednesday, the first day of the new window, the club announced the acquisition of Aleksandar Katai on a permanent basis, ending all speculation about his future in Chicago one his loan deal ended on July 31. Juan Pimiento, chicagotribune.com, "Ronaldo's shock transfer, the World Cup semis and the best of the week in soccer," 12 July 2018 The book also spurred speculation about whether Bryant — now known as Carolyn Donham — could face charges. Kristine Phillips, Washington Post, "New details in book about Emmett Till’s death prompted officials to reopen investigation," 12 July 2018 The sudden resignation of Scott Pruitt from the Environmental Protection Agency, following months of ethics investigations and allegations of misbehavior, has prompted a flurry of speculation about where his successor might lead the agency. Mark Trumbull, The Christian Science Monitor, "From new leadership to Clean Power Plan, subtle shifts ripple through EPA," 11 July 2018 Michael Cohen's off-camera sit-down with ABC's George Stephanopoulos unleashed a tidal wave of speculation about whether the President's long time personal lawyer is now turning against him. Fox News, "Media's Supreme Court scrutiny," 9 July 2018 Supreme bet: The D.C. crowd is all abuzz with speculation about President Trump’s pick to replace Justice Anthony Kennedy on the Supreme Court. Willie Brown, SFChronicle.com, "Scott Pruitt is just the symptom. The disease is Trump," 7 July 2018 Amid speculation about its ability to carry out the flurry of new executions on the calendar, state records show the Texas prison system in recent weeks received 15 more doses of the powerful barbiturate used in its Huntsville death chamber. Keri Blakinger, Houston Chronicle, "With 7 execution dates on the calendar, Texas just got more lethal injection drugs," 6 July 2018 Josh Raffel, deputy White House communications director Raffel, who worked closely with Jared Kushner and Ivanka Trump, left amid speculation about Kushner’s status within the administration. Emily Stewart, Vox, "EPA Administrator Scott Pruitt joins the very long list of high-profile White House departures," 5 July 2018 Wanting to tell her story at a time when speculation about her life behind the scenes was intensifying, the pop superstar gave Austrian director Rudi Dolezal full access to trail her on tour. Gerrick D. Kennedy, latimes.com, "Unflinching Whitney Houston film was the therapy a grieving, damaged family needed," 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.

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First Known Use of speculation

14th century, in the meaning defined above

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Last Updated

11 Oct 2018

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

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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 \

Kids Definition of speculation

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

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speculation

noun
spec·u·la·tion | \ˌspe-kyə-ˈlā-shən \

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

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Comments on speculation

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to reject or criticize sharply

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