Speculation
Speculation is buying something, with a view to further sale of expensive extraction and thus profits. It would seem that it may be easier. However, the laws of the market impose a number of limitations, thanks to which economic activity is carried out.
Grocery stores and wholesale stores is essentially the same speculators, but they function as a distribution of goods for consumers. We can not buy that either the market, get up close and sell more. To do this you need a little work, at least to attract the buyer is to imagine that there is an advertising company.
Therefore, to successfully implement the specs there are two factors. The first factor is spatial, that is the factor space, so that works most of the known business. That is, we go, go, fly, bring us to where the cheaper and then sell on its site a bit more expensive extracting profit. The second factor is the time factor. Based on this principle and work all the financial markets. That is, we buy a product when it is cheaper, and sell when it is more expensive.
Examples of speculation in financial markets
It is the time factor and is based principle of financial markets, it is possible to speculate on them. Initially, the goal of the financial market was to attract investors' funds. Someone opens the case and he needed money for development, although as a rule, startups do not get on the stock exchange. Or a company needs money for development. They place the shares on the stock exchange and investors, then there are those who have money and want to make a profit, these shares are bought, instead of relying on dividends, that is, interest of profit. In addition, the development of the company shares rise in value and investors then sell them at a profit to other investors, or redeem these shares the issuing company.
But this is with regards to the stock market, and there is a market commodity. Take, for example, a commodity, like wheat. It is known that in the autumn when the harvest is ripe, the price of goods falls, because the proposal is growing in the spring, when to sow wheat, the price of goods increasing as demand grows. An investor can buy wheat in the fall and sell it in the spring. At the price of such goods as wheat is influenced by many factors such as weather, affecting the yield.
For example, an investor, seeing that is drought, as well as gathering information from other areas of growing wheat on weather conditions and making sure there may buy wheat drought in the middle of summer and winter and then sell it at a profit.
But this is only possible in a developed financial market, where trading futures - contracts for the supply of goods in the future. Also, investors in the developed market has the opportunity to buy shares of a farmer to grow wheat. If it becomes more expensive wheat, then the shares rise in value.
Foreign exchange market, although it has its own characteristics, it differs little from the commodity market, but rather it resembles a mixture of stock and commodity market. As a dividend in the Forex market there is a mechanism of swaps on interest, depending on the differential in interest rates the central bank issuers. And the price of currency changes, depending on economic conditions in different countries.
In any case, speculators form the market. These are small cogs that make up the market. Due to the liquidity created by the speculators, that is, the market is constantly full of money and goods, it is always possible to buy and sell a certain amount.
Speculation is buying something, with a view to further sale of expensive extraction and thus profits. It would seem that it may be easier. However, the laws of the market impose a number of limitations, thanks to which economic activity is carried out.
Grocery stores and wholesale stores is essentially the same speculators, but they function as a distribution of goods for consumers. We can not buy that either the market, get up close and sell more. To do this you need a little work, at least to attract the buyer is to imagine that there is an advertising company.
Therefore, to successfully implement the specs there are two factors. The first factor is spatial, that is the factor space, so that works most of the known business. That is, we go, go, fly, bring us to where the cheaper and then sell on its site a bit more expensive extracting profit. The second factor is the time factor. Based on this principle and work all the financial markets. That is, we buy a product when it is cheaper, and sell when it is more expensive.
Examples of speculation in financial markets
It is the time factor and is based principle of financial markets, it is possible to speculate on them. Initially, the goal of the financial market was to attract investors' funds. Someone opens the case and he needed money for development, although as a rule, startups do not get on the stock exchange. Or a company needs money for development. They place the shares on the stock exchange and investors, then there are those who have money and want to make a profit, these shares are bought, instead of relying on dividends, that is, interest of profit. In addition, the development of the company shares rise in value and investors then sell them at a profit to other investors, or redeem these shares the issuing company.
But this is with regards to the stock market, and there is a market commodity. Take, for example, a commodity, like wheat. It is known that in the autumn when the harvest is ripe, the price of goods falls, because the proposal is growing in the spring, when to sow wheat, the price of goods increasing as demand grows. An investor can buy wheat in the fall and sell it in the spring. At the price of such goods as wheat is influenced by many factors such as weather, affecting the yield.
For example, an investor, seeing that is drought, as well as gathering information from other areas of growing wheat on weather conditions and making sure there may buy wheat drought in the middle of summer and winter and then sell it at a profit.
But this is only possible in a developed financial market, where trading futures - contracts for the supply of goods in the future. Also, investors in the developed market has the opportunity to buy shares of a farmer to grow wheat. If it becomes more expensive wheat, then the shares rise in value.
Foreign exchange market, although it has its own characteristics, it differs little from the commodity market, but rather it resembles a mixture of stock and commodity market. As a dividend in the Forex market there is a mechanism of swaps on interest, depending on the differential in interest rates the central bank issuers. And the price of currency changes, depending on economic conditions in different countries.
In any case, speculators form the market. These are small cogs that make up the market. Due to the liquidity created by the speculators, that is, the market is constantly full of money and goods, it is always possible to buy and sell a certain amount.
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