speculation

Occurs when traders are anticipating a future price movement based on a belief the market has inaccurately priced a stock, such as a penny stock, a small-cap stock or an emerging company. The main difference between speculating and investing is the amount of risk involved. There is an increased risk with speculating because it involves placing money into financial endeavors with a high probability of failure. Some traders might focus on speculating instead of investing because it seeks abnormally high returns from stocks that could be on an upward or downward trend.