Speculative Capital



The funds earmarked by an investor for the sole purpose of speculation. This capital is often associated with extreme volatility and a high probability of loss. Most speculators have short-term investment horizons and often use high degrees of leverage in their efforts to obtain profits.


Given the above average probability of loss in speculative trading, it is critically important to exercise good risk management and not become emotionally attached to a certain trade. It is not uncommon to see novice investors hold onto a position until it loses nearly all of its value. Given their limited experience, rookie traders should regard all their tradable capital as speculative capital. In other words, they should only invest whatever amount of money they can afford to lose without their way of life being materially affected.

  1. Capital

    1) Financial assets or the financial value of assets, such as cash; and 2) The ...
  2. Trading Capital

    The amount of money allotted to buying and selling various securities. Generally, ...
  3. Casino Finance

    A slang term for an investment strategy that is considered extremely risky. ...
  4. Leverage

    1. The use of various financial instruments or borrowed capital, such as margin, ...
  5. Risk Capital

    Investment funds allocated to speculative activity. Risk capital refers to funds ...
  6. Risk Lover

    An investor who is willing to take on additional risk for an investment that ...
  7. Speculation

    The act of trading in an asset, or conducting a financial transaction, that ...
  8. Speculator

    A person who trades derivatives, commodities, bonds, equities or currencies ...
  9. Speculative Flow

    The movement of speculative capital between different assets or areas of the ...
  10. Speculative Stock

    A stock with a high degree of risk. A speculative stock often offers the possibility ...
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