Speculation (speculative transactions). The meaning of the word speculation Speculative purposes

Speculation- this is making a profit by selling a cheap product with some markup.

This term comes from the Latin word “specio”, which means “look, observation”. When carrying out the speculation process, there is no need to carry out any specific actions with the item being resold.

History of speculation

Just a couple of decades ago, this term meant something negative and abusive. Speculation was subject to a special article in the Soviet Criminal Code, which implied punishment including imprisonment. Soviet citizens also did not like speculators - people who speculated on scarce products and foreign goods, selling these things at exorbitant prices.

The first mentions of speculative activity refer to Holland in the 17th century, where tulip bulbs were widely resold. Many residents sold their property in hopes of making a quick profit. But a century later, the situation in the country worsened and many were ruined.

At the present time, speculation is an obligatory component of the modern economic market, which must perform the corresponding functions.

There are several definitions of the term "speculation". This:

• acquisition and resale of various goods at inflated prices to increase one’s own profit;
• acquisition of securities for sale and making a profit from the difference received from the existing exchange rate on the market;
• a confirmed plan where the result is profit.

Modern economic experts claim that speculation is a kind of enrichment by realizing the difference between prices during a certain time interval. Many people nowadays are interested and continue to engage in speculative activities in the field of valuable documents, expensive metals, foreign currency, real estate, property, etc. – wherever transactions involving large amounts of money and investments are involved.

The purpose of speculation is to purchase things at a lower cost and resell them at several times the price. It is from this difference in the price of the product that the speculator’s income lies.

Speculation these days

Today, as mentioned above, people involved in speculation play an important role in the economic system of the state apparatus, because they perform specific functional duties:

• help simplify the situation during the resale of goods and securities throughout the market;
• play the role of a person who is able to compensate for the outcome of concluded contracts, which for a certain reason could not take place.

It turns out that speculation also plays the role of one of the participants in the insurance agreement, and is a kind of intermediary between the seller and the buyer of the product.

The result of the work of speculators is an increase in the number of successful transactions, improvement of relationships in the economic market, as well as the eradication of rapid drops and jumps in prices in the market.

Speculators are popularly divided into “bulls” and “bears”. “Bulls” make purchases of goods in order to resell them at a higher price when the country experiences an increase in the price of these products. And the Bears, on the contrary, resell products with the expectation of buying them up at a lower price. These names are conventional and are used exclusively colloquially, since there are various types of transactions, and the same person can act as both a “bull” and a “bear”.

Today, experts in the fields of stock exchange and economics make forecasts for the future development of speculative activity as a separate unit in the field of business building.

Factors influencing the emergence of speculation

It is worth noting that there are several reasons for the emergence of speculation in the economic market. This was also influenced by a number of factors that were recorded in a specific time interval.

Change in value over time

For example, during the Great Patriotic War, works of great artists, precious jewelry, interior items, etc., which in “quiet” times would have been sold at a market price, were sold practically for nothing.

It turns out that the speculator must lead in a given period of time. Just from the implementation of one transaction, he can become a millionaire, or he can spend ten years and not find his gold mine.

Inflation

The second factor influencing the emergence of speculation is inflation. Through the process of depreciation of money, the percentage of poverty in the country increases, and even those people who a couple of days ago were immensely rich can become poor.

Political factors

The destruction of the national economy of the state, the collapse of public and private organizations can lead to the fact that the country's residents will strive to resell their valuable property in the fastest way. It is this time that will be the most advantageous for the implementation of speculative activities.

An unstable political system, doubts about the correctness of the actions of the current government, an imperfect state apparatus, shortcomings in the legislative sphere, incomplete and dishonest work of law enforcement agencies can lead to an immediate abandonment of long-term investments.

Citizens no longer invest money in “businesses”, but prefer to transfer this money to accounts in foreign banking organizations or use them to purchase securities, precious metals, real estate, etc. The result of such a situation will be the emergence of a large number of speculators who will offer their own services.

Types of speculation

The Russian Federation, at one time, managed to go through all of the above factors, and it turned out that in the process of speculation several types of speculation arose:

1. stock speculation;
2. currency speculation;
3. speculation in precious metals;
4. real estate speculation.

Let's consider each type separately.

Exchange

Exchange speculation arose at a time when the transition of the Russian Federation economy to a market environment saw the emergence of a large number of public companies, in the absence of which further activity in a market environment would have been impossible. These companies were societies of shareholders, insurers, state and private banking organizations, various exchange organizations, etc.

Exchange is a certain organization that has the same rights and obligations as a legal entity, where the main thing is the creation of a wholesale market segment.

To carry out its activities, the exchange recruits and trains brokers (or agents), organizes places to work, maintains statistics of transactions performed, monitors existing prices on the market, and also helps resolve conflict situations that may arise in the market.

Exchanges are divided by type of exchange products:

• futures;
• agricultural;
• foreign exchange, etc.

Exchange activity involves two types of speculation: hedging and exchange. It is worth saying that these types of speculation cannot exist separately; they are complementary to each other.

1. Hedging- this is a certain insurance against a negative jump in the change in the cost of a product, which is based on monitoring the dynamics of the difference between the real price on the market and futures agreements (transactions) for this type of product.
2. Stock speculation is a specific way to realize profitability through trading, which is based on the dynamics of changes in futures transactions that directly depend on time and place.

The work of stock exchange speculators entirely influences the correspondence of the market value to the real price of the product.

Foreign exchange

The foreign exchange market is the place where the process of buying and resale of foreign currency, securities, check documents, etc. is carried out. There are two types of this market: exchange and over-the-counter type.

By their nature, all existing operations in the field of economics and finance can be classified as speculative activities, since the reason for their occurrence is far from commercial necessity.

These transactions arise due to financial interest for reasons where an important element is speculative activity. The economic component of the country is characterized by just this kind of contracts, where the essence is to increase profitability.

It turns out that currency speculation is a certain type of activity that is aimed at realizing profit by selling valuable products at an inflated cost on a specific market, but only after a certain period of time after their purchase at the same moment, or immediately, but only in another place.

These currency manipulations have some risks:

1. exchange rate - when there is a sharp change in the exchange rate;
2. executive - when there is an interruption of the contract due to a “human” reason (undermining health, hostility between the agent and the buyer, etc.);
3. collaborative – when employee errors are observed when recording, analyzing, monitoring and planning exchange contracts;
4. technical – when there are problems in the technical component when organizing transactions;
5. informational - when an insufficient amount of necessary information is disseminated or it is false due to the dishonesty of exchange employees in order to independently increase the exchange rate to increase profitability.

Speculation in Precious Metals

Speculation in the field of precious metals is also common, since the work of speculators as individual investors is characterized by the degree of quotation for different precious metals.

Speculative activities with gold metals have been widely known for a long time. This type of speculation is recognized as the most reliable investment tool. But these manipulations with metals such as platinum or palladium are also extremely attractive.

An increase in the value of precious metals is always caused by a large number of speculative investments in these metals. Experts recognize information as one of the important factors in increasing the cost of gold metals, because this factor can affect the reaction of all partners of the contract.

Real estate speculation

Citizens who are not familiar with the current situation in the field of real estate and the increase in the cost of housing “push” all the blame onto speculators. But this fact is only partially true, since the main thing in this situation is the number of agents working in this area.

If a small number of speculators work in the real estate market, where a larger number of concluded transactions for the sale or purchase of housing are transferred to their own share, then they really influence the change in the value of real estate. But it is worth noting that this fact is illegal, and the work of these agents is regulated and punished by the relevant government antitrust authorities.

A certain attention to speculation on the part of the state is observed in the control, opening and ensuring the operation of various exchanges, as well as drawing up a program for regulating their work.

Examples of speculation in economics

• Making a profit (or loss) from the difference between the purchase and sale prices. In this case, no actions are assumed with the object of speculation. Price differences can occur in different markets at the same time (space arbitrage) or in the same market at different times (time arbitrage).

• Buying and selling stocks, bonds, commodities, currencies, collectibles, real estate, derivatives, or other valuables to benefit from changes in their value. The purchase of the same objects for personal or production purposes, as well as for other profit-making, for example, through dividends or using decision-making mechanisms in one’s favor (insider interest), as well as operations aimed at hedging price risks or interest rate arbitrage, is not speculation. . However, this can only be determined by the internal goals of the trader, and very often all these transactions are considered speculative.

Speculation in the USSR

Speculation, that is, the buying and resale of goods or other items for the purpose of profit, is punishable by imprisonment for a term of up to two years with or without confiscation of property, or correctional labor for a term of up to one year, or a fine of up to three hundred rubles.

Speculation in the form of fishing or on a large scale is punishable by imprisonment for a term of two to seven years with confiscation of property.

Petty speculation committed repeatedly is punishable by correctional labor for up to one year or a fine of up to two hundred rubles with confiscation of the items of speculation.

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Synonyms:

See what “Speculation” is in other dictionaries:

SPECULATION, speculation, female. (lat. speculatio observation, reconnaissance). 1. only units, what, with what, on what and without additional. Purchase and resale of valuables (securities, goods, some property, etc.) with a fluctuating, unequal exchange rate with... ... Ushakov's Explanatory Dictionary

speculation- and, f. speculation f. 1. philosopher, political Speculative construction. If his uncle ever made a mistake in his political speculations. then he should rank this trip among his big mistakes. 1780. A. A. Bezborodko to P. A. Rumyantsev. // Star. And… … Historical Dictionary of Gallicisms of the Russian Language

- (late Latin speculatio study). 1) a trading enterprise for profit. 2) the desire for knowledge that lies outside of experience. 3) calculation of the likely benefit of any enterprise; a subtly thought out and executed trade deal, a scam... ... Dictionary of foreign words of the Russian language

- (speculation) Buying or selling something for the sole purpose of achieving capital gain. For professional speculators, the markets for securities, financial futures and options, commodities and foreign exchange are... ... Financial Dictionary

- (speculation) Economic activity aimed at making a profit from expected changes in the prices of goods, assets or currencies. In a world of uncertainty, most transactions can be interpreted as speculative, but the term speculation is usually... Economic dictionary

- (from lat. speculatio contemplation, speculation) philosophy. a speculative construction that tries, with the help of reflection alone, without reference to the hoof and the data of other sciences, to create a general picture of the world. The idea of ​​philosophy as S. developed already in antiquity and... ... Philosophical Encyclopedia

1. SPECULATION, and; and. [from lat. speculatio tracking, looking out] 1. Buying and resale of valuables, goods at inflated prices for the purpose of profit. C. summer cottages. C. currency. Birzhevaya village (financial; financial transaction consisting of ... ... encyclopedic Dictionary

Adventure; stock game; calculation, fartsovka, gesheftmaherstvo, reasoning, fartsa, speculation, intent, resale Dictionary of Russian synonyms. speculation noun, number of synonyms: 8 gesheftmachinery (2) ... Synonym dictionary

- (from late Latin speculatio peeking) in Soviet criminal law a crime consisting of buying and resale of goods and other items for the purpose of profit. It was classified as an economic crime. From the Criminal Code of the RSFSR, responsibility for S.... ... Legal Dictionary

- (from the Latin speculatio, tracking, looking out), 1) purchase and sale of valuables (shares, goods, currency, etc.) with the aim of making a profit from the difference between the purchase and sale prices (rate). 2) In a figurative sense, calculation, intent , aimed at... ... Big Encyclopedic Dictionary

SPECULATION IA 1, i, g. Ozhegov's explanatory dictionary. S.I. Ozhegov, N.Yu. Shvedova. 1949 1992 … Ozhegov's Explanatory Dictionary

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• Boiling Cauldron (collection of stories), Arkady Averchenko. Arkady Timofeevich Averchenko (1881-1925) is the king of humor, one of the most famous Russian writers of the early 20th century. “The Boiling Cauldron” is a sharply satirical book written by a true master...

What is speculation in a market economy? The concept of speculation can be viewed on several levels. This concept will interest us precisely in the economic plane. Making a profit (or loss) from the difference between the purchase and sale prices. In this case, no actions are assumed with the object of speculation. Price differences can occur in space at the same time (spatial arbitrage) or in time at the same place (temporal arbitrage).

Speculation in a market economy

Buying and selling stocks, bonds, commodities, currencies, collectibles, real estate, derivatives, or other valuables to benefit from changes in their value. The purchase of the same objects for personal or production purposes, as well as for other profit-making, is not speculation. For example, through dividends or using decision-making mechanisms in one’s favor (insider interest), as well as operations aimed at hedging price risks or interest rate arbitrage. However, this can only be determined by the internal goals of the trader, and very often all these transactions are considered speculative.

Purchasing on closed markets and resale of scarce goods on open markets under conditions of any restrictions on free trade (for example, during war). Such activities are often subject to administrative or criminal penalties and are therefore part of the “shadow economy.” In the USSR, speculation, defined as buying and resale for profit, was administratively or criminally punishable, depending on the volume of transactions.

A speculator is a person who buys and resells something for the purpose of obtaining profit, and not to satisfy his own needs (for consumption). In the modern world, it is very difficult to distinguish between investment and speculation, since both of these actions are aimed at obtaining material benefits. Typically, the criterion for delimitation is the time factor. If the operation lasts more than a year, it is an investment, and it will produce an economic effect a significant period after the investment. If it’s up to a year, it’s speculation.

What is stock speculation?

At the same time, when they talk about speculation in stock trading, they talk about attracting, for example, “portfolio investors” who closely monitor the situation on the market and can leave it, not paying attention to the duration of transactions. In terms of the nature of the contracts concluded, the nature of the actions performed, the goals, and the legal consequences, exchange investments and speculation do not differ.

Most often, the distinction is made according to the criterion of organizing a new business (real investment) and participation in an existing business (speculation). Another distinctive feature of speculation is the use of new financial technologies (financial engineering), this is, as a rule, the widespread use of derivative financial instruments and derivatives on the same derivatives, playing on several markets using their interrelations.

Well, the last difference between speculation and investment is that speculators very widely use borrowed funds “leverage” (from the English Leverage). Moreover, in a fairly strong ratio of equity to borrowed funds from 1/2 to 1/50, which entails not investment risks at all, but accordingly, profits can differ from investment ones by tens of times.

Speculation (speculative transactions)

speculative transactions.- C. are called purchase and sale transactions made with a certain type of goods or securities in order to benefit from the differences between the purchase and sale prices. Strictly speaking, any trade transaction, no matter what its object, is based on the same desire to make a profit on the difference in price, since not a single merchant buys goods for his own needs and not for the purpose of selling at the highest price. The difference, however, between an ordinary trade transaction and a transaction is that in the first the expected difference in prices is a more or less definite, normal value, determined by the usual desire to obtain business profit, while transaction contains an element of risk - it is carried out in in order to obtain an extraordinary profit that goes beyond the ordinary, while at the same time containing within itself the possibility of the same extraordinary loss. To a certain extent, a manufacturer who refrains from selling his products until better prices on the market, or a land owner who has inherited a plot and limits himself to temporarily making little use of it, in the hope of selling it in the future at a high price, can also be considered speculators. This kind of S., however, has a one-sided character, the speculative element is inherent only in the next act - sale, and the previous act - acquisition - is free from it, while in this S. both acts are of a speculative nature: the purchase is made with the aim of selling at the highest price, or the sale is made in the hope of covering it by purchasing at the lowest price. It is also necessary to distinguish S. in a close sense from arbitration transactions. The latter are simultaneous buying a commodity in places where it is in abundance, and selling it where there is a shortage of it, for example, buying bills of exchange for Russia in London and selling them in Paris, taking advantage of the difference in their prices, due to their strong supply at the moment in London and the enormous demand for them in Paris. The purpose of arbitration transactions, therefore, is to use local differences in prices, the purpose of S. is to use temporary price differences. The speculative element is revealed most sharply and typically in those transactions in which there is absolutely no real connection between the transaction and its object - the given product, that is, in transactions for a period or difference, when the speculator, buying a product, does not have it in mind at all receive, but sells it before the deadline for acceptance, or, selling the goods, does not have it in hand at all, but expects, before the delivery deadline, to cover himself with the corresponding purchase, in both cases benefiting from the difference in price. For such transactions, the speculator does not need to have either money or goods, he only must have the means, in case of an error in the calculations, to pay the difference. It would, however, be a mistake to consider all S. for a period of time as something like a bet on an increase or decrease in exchange rates without any national economic significance. In fact, the speculator, making his two mutually destroying S., becomes in the middle between various counterparties, each of which individually may have in mind a real deal. A speculator can buy a commodity from an actual seller, and although he sells it to a second for the sake of difference, the second to a third, etc., however, from the latter the goods will eventually pass to the actual buyer who needs the commodity. The national economic significance of S. lies in the expansion of the sales market and in the leveling and equalization of prices in time and space. S. are carried out primarily with goods from the category of replaceable goods that make up a homogeneous mass, regarding the quality of which a certain general type can be established and which, due to the existence of a constant demand for them, are always in circulation; these are bread, sugar, spirits, coffee, cotton, kerosene, etc. The production of most of these articles depends on the harvest, as a result of which it is subject to the greatest uncertainty and fluctuations. One extra or insufficient rain, for example, changes the entire calculation regarding the amount of bread or sugar (depending on the beet harvest) that will be produced during that year. On the other hand, some of these items are produced far overseas, as a result of which the supply of them to European markets is also subject to uncertainty and fluctuations. Speculators, having foreseen and examined in advance all the data that may have an impact on the future supply of the market, try to “take into account” these data in their favor. Anticipating, for example, a shortage of crops, they begin purchasing future grain several months in advance. The rise in prices they produce serves as a signal for the owners of grain reserves to withhold the latter from sale and save it for the future, and encourages importers to take care of bringing grain from other places where this grain is in abundance. Thanks to this anticipation of a future event, the very onset of a crop failure will not have tangible consequences, and instead of a sudden, sharp rise in prices, there will be a slow increase over the course of several months, to which each individual farm will somehow adapt. In the same way, on the contrary, if the harvest is expected to be too large, speculators begin to sell bread in blanco at a cheap price in advance, in the hope of purchasing it even cheaper after the new harvest. Thanks to this influence of S., bread slowly falls in price, and consumers enjoy its benefits even before the new harvest. After the harvest, the opposite phenomenon occurs: speculators who sold in blanco are now forced to cover themselves with purchases, as a result of which demand in the market increases and prevents prices from falling too sharply to the disadvantage of producers. The same should be said about securities that have as their object paper values, such as shares of enterprises whose profitability is subject to fluctuations, or government funds and bills of countries with paper currency, the rate of which fluctuates depending on changes in the political mood or financial situation of a given state. Any event that can influence the change in the profitability of securities first of all attracts the attention of S., who begins to play for a fall or increase, and then the movement spreads to the circles of real capitalists who want to place their capital in securities that are rising in price or, conversely, who want to sell falling securities . Thus, speculative, fictitious transactions are mixed with real ones, made for the purpose of actual acquisition or alienation. Thanks to S., the market expands and a soil is created that is always ready for the perception or return of values. Exchange-traded securities have real value only because their owner is in full confidence that he will be able to sell them or re-acquire them at any moment. The further national economic significance of insurance is revealed in the fact that, thanks to them, producers have the opportunity to insure themselves against possible accidents in the sale of their goods or the acquisition of raw materials in the future. A miller who provides himself with grain for the future by purchasing for a term, or a sugar refiner who is selling his future production, or an importer who has ordered goods in a country with fluctuating paper currency and provides himself in advance by purchasing the currency he needs for the term, each act in the interests of his business, providing for himself from the risk associated with a future sale or purchase, which risk is assumed by speculators for a known reward.

The above considerations present the action of S. in its ideal form, without the admixture of those dark sides that inevitably accompany it, neutralizing its beneficial effect and turning it into an extremely harmful phenomenon. One of these dark sides is indicated by the fact that the size of S. is many times larger than real transactions. On the London Stock Exchange, for example, real transactions account for only 1/6 of all transactions carried out there. At the Berlin Bread Exchange in the 60s, the import of rye annually amounted to about 100,000 Wispel, and transactions were made for 2 million Wispel. On the New York Cotton Exchange during 1883-85. The average number of futures transactions completed annually was 24.2 million bales of cotton, while the actual delivery amounted to 487,000. In the coffee trade, focusing on the European continent mainly on three exchanges (Le Havre, Hamburg and Antwerp), forward transactions were concluded in 1885 for 35.5 million bags of Santos coffee, while the harvest of this type of coffee was only 3.5 million bags. True, it is objected to that this happens not only in stock trading: each box of cigars, before falling into the hands of a smoker, passes through a number of hands and is paid for many times. It goes without saying that the difference between this turnover and the turnover called by S. is enormous. While the trend in the development of a trade organization is to reduce the number of intermediate members and bring the producer closer to the consumer, trade unions allow and do increase the number of turnover to the most extensive dimensions without any regard to the size of existing needs. The prospect of making a profit from S. is so tempting that it attracts not only people who, thanks to their understanding of the matter, extensive connections and sufficient funds, can actually play the above-described role in the national economy with their speculative activities, but also the so-called “hares” who turn speculative activity in a simple, petty, albeit extremely gambling, immoral game. It is obvious that such persons do not care at all about a calm study of facts and prudent weighing of data concerning the value of securities; they use all sorts of rumors deliberately spread in order to raise or drop a given paper, just to have an object to play with and make a difference. Instead of equalizing prices, price regulation, therefore, in most cases, leads, on the contrary, to an artificial rise or fall of prices, in the interests of speculators alone and to the detriment of the actual owners of values ​​or producers of products, i.e. e. to a large public. To this is added another evil, namely the demoralizing influence of S. on the entire population, which, not content with the normal placement of their savings in exchange-traded securities, in order to obtain some benefits on the saved capital, is involved in the stock exchange game. In any European capital, and in many provincial cities, you can meet a lot of people (officials, priests, military men, people of liberal professions, artisans, widows, etc.) who, carried away by the prospect of getting rich, give their last crumbs to Moloch S. Such persons, having no idea either about the value of the securities with which they speculate, or about the nature of those facts and events that may have an impact on changes in exchange rates, in their speculative activities are guided solely by a sense of herd, blindly following several leaders and doing all that , what are they doing. Banks and banking firms usually greatly indulge the public's desire for stock trading, providing it with the necessary credit for this in the form of the so-called on call. This form consists in the fact that the paper purchased by the bank on behalf of the speculator is given to the bank in the “depot”, and the speculator makes a contribution (Einschuss) of approximately 10% to secure the value of the paper paid by the bank. If the price of the paper rises, the bank is given an order to sell it, and the speculator receives back his contribution + the difference between the sale and purchase prices, minus the bank's commission, courtage and interest on the “loaned” capital. In the event of a depreciation, the bank first requires an additional contribution (Nachschuss) to secure the depreciating paper, then further contributions, and when the client no longer has funds, the bank makes an “execution sale”, deducting from the accepted contributions the amount of losses incurred along with overhead costs and returning the rest, if any, to the client. Quite often, the on call form serves as a means for bankers to fraudulently rob the speculating public. Having stocked up on a sufficient amount of some paper, especially new paper that is not widely traded on the market, at a low price, the banker begins to “put it into use,” encouraging his clients to buy it and opening for them on call accounts for this purpose. The banker thus buys the paper at home leaving her at home and paying % to yourself. When the security has already been sufficiently “placed,” the banker begins to lower its price through small sales on the stock exchange, demanding additional contributions from his clients, until, finally, it comes to execution sales, in which the buyer is the same banker. Thus, as a result of the entire operation, the paper, without leaving the banker’s possession, brings him income in the form of the difference between the first “purchase” transaction and the last “sale” transaction + cost and commission for two transactions +% for the entire period for not used in business capital. Quite often, the entire operation from beginning to end is fictitious for the commission banker with real, however, consequences for him. This kind of criminal fraud is also often resorted to by the founders of new joint-stock companies and those issuing new securities in general, making intensive, fictitious purchases of them on the stock exchange in order to raise their rate and place them among an unknowing public. Of course, such machinations by S. à la hausse are not always crowned with success, encountering opposition from the so-called countermine, for which such tricks remain well known and which tries to paralyze them through S. à la baisse. Thanks to this sometimes resistance of two opposing forces, the harm from such fraud is significantly neutralized. It is not always, however, that both parties act hostilely; sometimes they join together to form a syndicate or strike to defeat the common enemy - the uninitiated public. The first form of a strike (the so-called rig upwards on the London Stock Exchange) consists in the fact that persons conspiring among themselves try to acquire a certain type of paper into their possession, and then, by spreading favorable rumors and increased demand, they raise the price of this paper and attract numerous hunters to buy it, to whom the strikers sell at a price significantly higher than what they themselves paid and which corresponds to the actual value of the paper. Another form of a strike (rig downwards) consists in the fact that conspired persons, by means of an increased supply of a given paper, lower its rate, as a result of which an intensive sale of this paper begins on the part of the frightened public: in this way they manage to stock up on this paper at a low price, and then , when the market calms down and the previous price of the paper is restored, they sell it at a higher price. The third type of strike (the so-called corner in English, and Schwänze in German) is no longer directed against the public, but by one group of speculators against another, namely against the countermine mentioned above, in order to press it to the wall. For this purpose, the persons united in the strike purchase the entire quantity of this paper in circulation on the market, including also numerous lots for a period from speculators à la baisse. When the deadline arrives, the paper is nowhere to be found on the market, and the short sellers, in order to implement their transactions, are forced to turn to their previous buyers for the purchase of the securities they sold, who, being now the masters of the situation, of course, dictate the most unfavorable conditions to them. However, corners on the stock exchange occur very rarely; more often they happen on the commodity exchange. So, for example, in September 1888, the price of wheat at the Chicago Bread Exchange for September delivery began to rise, at first very slowly, from 92 cents per bushel September 1 to 94 1/2 cents on September 22, but then the rise in price quickly went uphill: on September 26 the price reached - 104, 28 - 149 1/2, and 29 - 175 and even 200 cents. At the same time in New In York, the price of wheat for September delivery rose only from 98 3/4 to 102 1/2 cents, and in Chicago itself the price of wheat for October delivery also rose from no more than 92 to 102 1/2. The reason for this astonishing increase in the price of wheat for September delivery there was a corner, the leaders of which managed to concentrate all the available reserves in their hands, while the sellers were not able to get wheat in such a short time from other places. In general, this corner gave its organizers 3 million dollars in profit. In September of the same year, produced by another corner in Hamburg regarding coffee. On the Hamburg Coffee Exchange, in particular, many forward transactions were made à la baisse for September. A group of haussiers took advantage of this opportunity to buy up the entire available supply of coffee in order to then dictate terms to the baissiers. As a result, the price of Santos good average coffee, i.e. the exact variety that is valid for acceptance and delivery on forward transactions, rose to 61 1/2 pfennigs per pound - on August 22, to 80 1/2 pfennigs - 31 August, up to 160 - September 6, up to 185, 200 and even 240 - September 7 and 8. Then the price fell again to 85 pfennigs on September 13th, only to rise again to 100 on September 15th and 17th. Only after these days did a continuous decrease in the price of coffee begin, reaching the previous normal price of 62 pfennig on September 25, where it stopped. Thus, this corner was only partly a success, since the baissers managed to get some supplies from outside in the interim and thus at least soften their fate somewhat. Such corners, in one size or another, are very often practiced on the commodity exchange and are all the more outrageous because they mostly concern basic necessities.

The abuses of stock market trading are not exclusively modern phenomena. We find the first traces of speculation in the Netherlands at the beginning of the 17th century. A few years after the founding of the East India and West India Companies (1602), the Amsterdam stock exchange became very lively with shares of these companies, which were sold in blanco. In the 30s of the same century, the historically famous S. with tulips was played out in Holland. Brought shortly before to Western Europe, the tulip soon became one of the most favorite fashion items both in Holland and in France, attracting a lot of people to the cultivation of various high varieties of this plant: not only specialists took part in this activity, which brought great profits , but also peasants, fishermen, carriage makers, weavers, peat porters and chimney sweeps. In the winter of 1636-1637. things came to a head: there was a lively S. with urgent transactions for spring delivery. On February 3, the crisis came, S. burst and many were ruined. In the next century, we see the spread of sterling to other goods: at the beginning of the 18th century in Amsterdam, sterling with bread, coffee, alcohol, etc. was produced. Selling with alcohol was then so extensive that for one real transaction there were up to 36 intermediate. The same phenomena occur on European stock exchanges. In the 20s of the 18th century, two speculative fevers took place in London and Paris, which in their size and debauchery even significantly exceeded everything that had been accomplished in modern times in this regard. The subject of S. was the shares of two grandiose enterprises - John Law's Mississippi Bank - in France and the Southern Ocean Society in England. Both S. are distinguished by both the incredible height to which the shares rose and the incredible fall of the latter. In England, around the middle of 1720, the shares of the South Ocean Company rose to 1100% of their nominal value; from August of the same year they began to fall so quickly that at the end of September their rate no longer exceeded 175%. In France, the shares of a Mississippi bank of 500 francs reached their maximum rate in 1719 - according to some, 13,500 francs, according to others, 20,000 francs; upon the collapse, they fell to 42 francs in October 1820, after which the company was declared insolvent and the liquidation of his affairs began. Another famous case of epidemic speculative fever occurred during the Directory. In 1719 they traded shares of the Mississippi Bank, in 1793 they traded raw materials and products in kind - wool and grain, logs and precious stones. Louis Blanc, in his “History of the French Revolution,” depicts a regency during the Regency, which took place on the Rue Quincampoix, where the speculators were court and ecclesiastical princes, artisans, members of parliament, monks, abbots, shopkeepers, soldiers, footmen and prostitutes and all sorts of adventurers all ends and ends of Europe; The Goncourt brothers, in their History of Society during the Directory, give a picture of the S. era of incroyables et merveilleuses, when men and women, at home and on the street, knew nothing more than to trade samples of various goods - precious stones, wine, bread, gunpowder , salt, cloth, linen, iron, oil, coffee, copper, lace, soap, lard, wood oil, sugar, pepper and coal, and when every house turned into a shop and every dwelling into a bazaar. The present century is even more rich in speculative fevers, although not as intense as in the time of Law, but more frequent, thanks to the generally extreme development of the credit economy in modern times. The first half of this century was marked by three speculative eras (1824-25, 1836-37 and 1844-47), whose main source was the shares of the then newly established joint-stock companies and the shares and bonds of the railways, which were then being built for the first time. Of the speculative eras of the second half of this century, three also stand out. The first dates back to the 50s and its center is France, where around the banking institution founded at the end of 1852 - Crédit mobilier, with a fixed capital of 60 million francs and with extensive privileges from the state, speculative activity develops, thanks to the received the bank's huge dividends: in 1852 they were 13.4%, in 1854 - 11.8%, in 1855 - 40.8%, in 1856 - 23%. Accordingly, the price of its shares (500 francs) was very high, reaching 1997 1/2 francs in May 1856. A strong speculation à la hausse developed, which also drew into its circle all sorts of other values, which did not fail to be followed by a strong reaction that lasted until 1859. In 1857-58. Crédit Mobilier already gave only a 5% dividend and the price of its shares reached 505 in 1859. Subsequently, it still experienced several favorable years, but then its situation worsened, and its leaders were forced to begin liquidating its affairs. Its stock price at the time of liquidation in 1870 fell to 87 1/2%. The second speculative movement, which affected mainly Austria and Germany, dates back to the era of Gründerism in the 70s, when various joint-stock companies and industrial enterprises, thanks to the influx of French billions, grew like mushrooms. Thus, in 1870, 410 joint-stock companies were established in Prussia with a capital of 3078.5 million, and within just 4 1/2 years, from July 1, 1870, 857 companies were established, with a capital of 4298 .8 million, and in the years 1871-72 alone there were 725 companies, with a capital of 2757.2 million. In Austria, the number of joint-stock companies during 1868-73. increased from 149 to 681, with a fixed capital of 1877.8 million guilders. The fever that formed in these papers took on the character of a real fever. Vienna was especially different in this regard. The number of stock exchange visitors increased from 600-1000 in 1867 to 3000 or more in 1873; there were days when the number of exchange visitors reached 100,000 per day, amounting to 400-500 million guilders. S. à la hausse assumed such proportions that reports reached 60%. At the end of April 1873, a reaction began that entailed a number of bankruptcies. In May, these bankruptcies increased even more; May 8 alone brought with it 110 bankruptcies; Horrible scenes took place on the stock exchange, the collapse was astounding. Ten years later, France again became the arena of speculation, and its center this time was the Union Generale bank - a credit institution like the Crédit Mobilier, founded in 1878, first with a capital of 25 million francs, little by little increased to 150 million francs . The successes of Union Generale, headed by Bontu, were brilliant; its shares rose from 340 francs in 1878 to 3050 francs in mid-December 1881 - however, the bank was obliged to such an increase in the exchange rate by its own purchase of its shares on the stock exchange. The wealth emanating from this bank extended to other assets, such as shares of railways and various banks, especially shares of the Suez Canal. A reaction soon set in, reaching its climax on January 19, 1882, when Union Generale shares fell from 2,380 francs to 1,250 francs. On January 30, the bank was forced to stop payments, and on February 2, a competition was announced over it. The result was numerous ruins with all their trappings.

The legislation of all almost civilized countries has long been fighting against S., trying to neutralize their harmful consequences, although its efforts have been little successful. Back at the beginning of the 17th century, during speculation with shares of the East and West Indian companies, the states general issued two laws (1610 and 1621), by which “all sales of shares not in possession are declared void, with penalties in addition a fine in the amount of 1/4 of the amount sold in favor of the informer, the judge and the poor." In England, the law of 1697 recognizes as void all delivery transactions completed for a period longer than 3 days. The Law of 1784 (Barnard's Acte) prohibits transactions with premiums in stock securities, the implementation of transactions for paying the difference and, in general, the sale of funds in blanco. Since, however, according to the statutes of the London Stock Exchange, litigation of disputes arising from exchange transactions made between members, and since, moreover, the prohibitions of Barnard's Act applied only to English state papers, this law had no significant practical significance and was repealed in 1800. Leemans's Acte, published in 1867, reaffirmed the prohibition of the sale of bank shares in blanco, but also unsuccessfully. In France, the law of 1724 prohibits official stockbrokers, under penalty of punishment, from any intermediation in S., in which there are no securities and purchase prices. This law did not lead to anything, as did the orders of 1785 and 1786, which somewhat softened the previous law in that the punishment was abolished and forward transactions without backing them with securities were only declared unenforceable. In the revolutionary era, it was again restored law of 1724. Further, Article 1965 Code civil declares all contracts that have a game or bet as their subject are not subject to action, and Article 421 Code Penal threatens for any bet on an increase or decrease in the rate of public securities, imprisonment and a fine, moreover, According to Article 422, such a bet should be considered any contract for the delivery or sale of public securities, in relation to which it cannot be proven that these securities were at the disposal of the seller at the time of the conclusion of the contract or should at least have been at the day of delivery. Judicial practice constantly fluctuated regarding the application of these articles, either revealing too much lenience, or, on the contrary, too much severity. Since the forties, however, all S. began to be recognized as valid and subject to action, if only there was a real intention to deliver the papers on time and pay money. The latest legislation on this subject dates back to March 28, 1885, partly caused by the stock exchange crisis of 1882, in which many unscrupulous speculators refused to fulfill their obligations, citing Art. 1965 Code civil. According to the new legislation, all forward transactions with public and other securities, as with food items and other goods, are recognized as legal, no one can refuse to fulfill the obligations assumed under these transactions, referring to Art. 1965 Code civil, at least the implementation of these transactions ended with the payment of the difference. Further, the above-mentioned laws of 1724, 1785 and 1786 were repealed, as was Art. 421 and 422 Code penalty. Only Art. remains in force. 419 Code penal, according to which the increase or decrease in the exchange rate of securities or the price of goods by spreading false news is subject to punishment. In Prussia, forward transactions with only certain securities were declared invalid; for example, transactions with Spanish state funds in 1836, transactions in general with foreign funds in 1840, then in 1844 - transactions with railway shares, projects, etc. But all these legalizations were legalized by law on July 1, 1860 .cancelled. According to the definitions of the current German Commercial Code (Articles 338, 354, 355 and 357) and judicial practice, all forward transactions are considered valid and enforceable, unless the parties have expressly conditioned the implementation of their transaction on the payment of the difference alone. In Austria, according to the law of 1875, when considering claims arising from exchange transactions, there cannot be an objection that the basis of the contract is a transaction for difference that has the meaning of a game or bet, and such claims must be satisfied as valid. For Russian legislation, see Exchange operations.

Encyclopedic Dictionary F.A. Brockhaus and I.A. Ephron

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Speculation is the quick making of a profit based on information about the difference between the purchase price and the selling price.

* This difference may be at one time, but in different places. For example, on different exchanges or in different countries, cities (arbitrage in space).

* In one place, but at different times. In this case, it relies on information about a possible price increase, which may not be confirmed later or the prerequisites for its growth or the size of the increase may change (time arbitrage).

* The difference between the purchase price of large wholesale and the selling price of small wholesale.

Prerequisites for speculation

Any trade operation is essentially speculative, whatever its object, since not a single merchant buys a product for his own needs, nor does he sell it at the purchase price. Buying and selling stocks, bonds, derivatives, currencies, commodities, collectibles, real estate and profiting from differences in their prices are all examples of speculation. Transactions with the same objects are not considered speculative, but for making a profit through dividends or with the help of insider interest, operations for hedging price risks, etc. But often these transactions also come down to speculation.

Speculation is caused by the uneven distribution of supply and demand at different time periods between different markets. Differences in the value of the same product caused by differences in quality, differences in cost and delivery conditions, etc., are not a prerequisite for speculative activity.

The number of closed futures transactions in the market is directly proportional to the large number of speculators present on it. Their presence dramatically increases the futures contracts traded in the market. Due to the increase in the number of market participants, supply and demand are aligned and representative and generally accepted futures prices are formed, which also influence spot prices.

Simple speculation

This type of speculation is based on working with one contract with a given delivery month. It can be of two types:

1. If a speculator expects the price to rise, he buys it cheap and sells it at a higher price. A market participant using such a strategy is called a “bull”. with a tendency for prices to increase is called “”.

2. If prices are expected to decline, the speculator first sells the futures at the maximum price, and after a certain time buys it back at the minimum price. Such a speculator is called a “bear”. A market with a downward trend in prices is called a bear market. To make a long-term forecast, a speculator usually uses fundamental analysis. This is an analysis of general economic factors that determine the level of supply and demand in the market. Technical analysis is used to make a short-term forecast. This is an analysis of price trends and volumes of futures contracts.

Speculation on the spread

You can simultaneously work with several futures contracts, based on the discrepancy between individual parameters. This is called spread speculation. For such an operation you need at least two different futures.

Spread speculation is based on changes in the ratios of futures prices, futures and spot prices, and futures and forward contracts. The speculator’s task is to notice deviations in the relationships between prices from the usual ones, reflecting the short-term situation on the market, and to have time to sell in bull markets and buy in bear markets. Such joint actions of many market participants ultimately equalize the price ratio. As a result, prices reflect the real value of assets.

Speculation on a spread is less risky than simple speculation, since the presence of opposite positions is akin to hedging: a loss on one open position is offset by a profit on the opposite position. But such transactions have low profitability, since the income from the difference in prices is less than from simple speculation, but at the same time, commission costs are higher due to the doubling of the number of transactions concluded.

Speculators are classified according to the length of time they hold open futures positions:

1. Speculators who maintain open positions until a significant price change occurs, for several days or even months, are called positional.

2. Speculators who keep positions open for one trading day are called day traders.

3. Speculators who play on minor price fluctuations and profit from the volume of transactions are called flash speculators or scalpers. Usually these are professional traders who have their own funds.

To avoid incurring losses due to an incorrect forecast, a participant in the futures market must always be aware of events on it. All trading participants intuitively try to follow generally accepted rules, tested by the experience of others:

1. Do not trade more than three or four contracts at the same time.

2. Set the limits of acceptable losses in advance.

3. Manage exclusively free funds. 4. Make decisions with a cold mind, without emotions.

Examples of speculation

Simple speculation

Let's say a market participant believes that the price of gold will rise. He buys ten contracts at $620/1 ounce. 5%, that is, $31 per contract or $310 for ten contracts. In addition, a registration fee of 1/1 contract and (a fraction of a percent of the contract value) is taken into account.

Let’s say the forecast is justified and within a week the price of gold has risen to $625/1 ounce. By selling ten futures, the speculator makes a profit of $50.

Speculator expenses: 20 rubles for exchange fees and about 311 rubles for broker commission. about 919 rubles.

The profitability of the operation is 0.119, that is, 11.9%. The annual profitability of the transaction is 605% per annum.

Speculation on the spread

Let’s say a market participant decides that gold prices should rise in the coming month. Let the price of the nearest futures contract be 620 $/1 ounce, and the price of a futures contract with a date six months from now be 630 $/1 ounce.

The speculator buys ten futures at $620/1 ounce and immediately sells ten futures at $630/1 ounce.

Let's say the forecast is justified. A month later, the price of the nearest futures contract rose to $625/1 ounce, and the price for the one with a date six months later rose to $632/1 ounce. The speculator closes his positions at current prices, sells ten futures for $625/1 ounce and buys ten futures for $632/1 ounce.

The final result from the spread is an income of $50 and a loss of $20. Gross income $30.

Speculator expenses: 40 rubles for exchange fees and about 627 rubles for broker commission.

The profitability of the operation is 0.008, that is, 0.8%. The annual yield of the transaction is 9.6% per annum.

When buying a near future and selling a long future:

1. The maximum income can be if the price of the near futures increases, but at the same time the price of the distant futures falls.

2. There will be limited income if the price of the near futures increases faster than the price of the distant futures.

3. There will be a limited loss if the price of the near futures falls faster than the price of the distant futures.

4. The maximum loss will be if, when the price of the near futures falls, the price of the distant futures rises.

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