APRESENTATION ON

SPECULATION,TYPES OF SPECULATOR,FUNCTIONS &

THEIR ROLE IN STOCK MARKET

Presented to,Prof. R.K.RAULHOD,JNSMSASSAM UNIVERSITY

Presented by,Janmajit Debnath(13)

Sanjib Paul(18)Ishan Dutta(26)

Mritunjoy Deb(28)Biplab Dey(34)

Dhruba Debnath(43)Ratnadeep Paul(45)

Introduction

Speculation is a financial action that does not provide safety of initial investment along with the return on the principal sum.

Speculation typically involves the lending of money for the purchase of assets, equity or debt but in a manner that has not been given thorough analysis or is deemed to have low margin of safety or a significant risk of the loss of the principal investment.

In simple words, Speculation is the activity of Speculators. The activity of the speculators leads to taking position in the stock market for a short period of time.

Speculation vs Investment

The term “speculation” contracts with the term “investment”, which is a financial operation that, upon thorough analysis, promises safety of principal and a satisfactory return.

Basis Investor Speculator

Planning Horizon Longer planning horizon Shorter planning horizon

Risk Disposition Not willing to assume more than moderate risk

Willing to assume high risk

Return Expectation

Modest rate of return High rate of return

Basis for decision Fundamental factors,careful evaluation of the prospects of the firm

Hearsay,technical charts,market psychology

Leverage Uses his own funds & eschews borrowed funds

Resorts to borrowing