Business / Taxes / Speculator: When you make a financial commitment because you believe something will happen in the market where you’re trading that will provide a profit, you are acting as a speculator. For example, you might invest in a bankrupt company because you expect that it will emerge from bankruptcy and its stock price will rise at some point in the future. Or, you might purchase futures contracts or buy or sell options because you think the contracts might increase in value. In contrast, hedgers buy futures and options to protect their financial interests. For example, a baker who buys a wheat futures contract in order to protect the cost of producing bread is hedging the risk that wheat prices will rise. She’s willing to spend a certain amount to protect against a potentially larger loss.


Business / Finance / Shakeout: A dramatic change in market conditions that forces speculators to sell their positions, often at a loss. MORE


Business / Finance / Handle: Heavy selling of stocks by speculators who think that the stock is overvalued and is about to drop. MORE


Business / Finance / Speed: One who attempts to anticipate price changes and, through buying and selling contracts, aims to make profits. A speculator does not use the market in connection with the production, processing, market MORE