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

Synonyms & Antonyms Example Sentences Learn More about speculation

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Synonyms & Antonyms for speculation

Synonyms

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

Antonyms

sure thing

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.

Recent Examples on the Web

Remember that the point is to own the narrative, so get your message out ahead of gossip and speculation. — Elizabeth Bernstein, WSJ, "The Art of the Public Divorce Announcement," 11 Jan. 2019 It’s Over Award Our long national nightmare of media speculation and mayoral grovelling ends with HQ2 split between New York and Washington. — Mark Lamster, Curbed, "2018 in architecture: The good, the bad, and the urbanism," 27 Dec. 2018 Over his decade spanning career, each one of Slimane’s debuts has been met with off-the-chart amounts of speculation and controversy. — Steff Yotka, Vogue, "Meet the People, Trends, and Products That Will Rule Fashion in 2019," 17 Dec. 2018 Like Bigfoot and the Loch Ness Monster, the Coso Artifact became the subject of widespread conjecture and speculation. — Erik Lacitis, The Seattle Times, "Proof of alien visitors? Artifact from an ancient civilization? The truth is out there — in Seattle," 1 Dec. 2018 Intel unveiled its 9th-generation Core desktop chips (after weeks of speculation and leaks), with the notable omission of a key feature: Hyper-Threading, at least on all but the most exclusive Core i9-9900K for mainstream PCs. — Mark Hachman, PCWorld, "Intel debuts 9th-generation Core chips, including Core i9 and X-series parts, with a few twists," 8 Oct. 2018 But that's just informed speculation without further word from Sony, and Sony has not yet publicly commented about the incident. — Samuel Axon, Ars Technica, "Sony tries to upload movie trailer to YouTube, posts entire movie instead," 3 July 2018 After the Duchess of Sussex missed Chopra’s over-the-top wedding in India and the actress later failed to attend the duchess’ lavish New York City baby shower, some tabloid speculation started: Were these two famous friends. . — Elise Taylor, Vogue, "Priyanka Chopra Is Not Here for Those Meghan Markle Feud Rumors," 25 Mar. 2019 Besides, as all that tabloid speculation proves, there's more than enough buzz around each couple to employ two sizable offices. — Hadley Keller, House Beautiful, "Why Is Meghan Markle and Prince Harry's Household Split From Kate Middleton and Prince William Such a Big Deal?," 15 Mar. 2019

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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Last Updated

18 Apr 2019

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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

See the full definition for speculation in the English Language Learners Dictionary

speculation

noun

spec·u·la·tion | \ ˌspe-kyə-ˈlā-shən