Speculation
Generally, the activity with the aim of avoiding disadvantages or gaining advantages from a market change expected in the future. – Transactions in which very high risks are taken with regard to profit or loss – On stock exchanges, the attempt to make a profit from price changes on the financial market or commodities market by buying/selling futures contracts. The speculator thereby assumes the risk which the hedger seeks to transfer to a partner. In this way, the speculator provides the market with the necessary liquidity. In Germany, it is prohibited under § 23 BörsG to induce inexperienced persons to engage in speculative trading. – Derogatory term for risk-taking market participants in general with the claim that they cause – even worldwide – imbalances. So it is not the cause, such as bad policies and thus corresponding expectations of economic subjects, that is denounced; rather, only the effect – here: Withdrawal from exposures suspected of being in crisis – is illuminated…. – See agiotage, duty to inform, bubble, bubble, speculative, derivatives duty to inform, derivatives code, differential transactions, financial vultures, financialization, fixing, Herstatt bankruptcy, short selling, Martin principle, opinion buying, option, position, uncovered, return, implied, risk report, risk transfer, commodity price risk, commodity futures contract, short selling, Soros speculation, speculator, spread bets, stag, futures speculator, polygon, magic, foreshadow effects, commodity futures contract, lemon trading. – Cf. ECB Monthly Bulletin of September 2008, p. 21 (Fluctuations in commodity prices depending on speculators: overview), Deutsche Bundesbank Monthly Bulletin of June 2012, p. 34 f. (on the influence of speculation on the oil market).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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