Speculation is investing in some asset, such as goods, services, debt securities, or foreign currencies, in the hope of profiting from a price change in the asset. An asset that is a suitable vehicle for speculation often trades in a liquid and active market with low transaction costs. But other assets that have different characteristics can also be used for speculation. For example, compared with stocks, real estate is less liquid and active and has relatively high transaction costs, but real estate speculation occurs quite frequently. A speculator is one who speculates. The word “speculation” stems from the Latin word speculare, which means observing the positions of the stars with the goal of taking a specific action at the most adequate time and the best ...