Investing in stocks and bonds according to the financial experts is considered to be a fabulous way to make huge money in a short span of time. People in huge numbers across the globe have been making investments in this particular industry and witnessing rise in their capital and profits. As a matter of fact, securities in millions are being purchased across the globe.
About the speculator or investor
The question that many tend to ask is who is the investor or speculator in this form of market? The financial specialists state that the speculator sells and buys various types of securities. His ultimate purpose is to make quick capital gain that is derived from the price fluctuations that take place from time to time within the stock market. The investor, on the other hand, is known to purchase securities with the purpose to generate regular income by holding these securities for some time. His purpose is to ensure safe investment. This group is also known to hold bonds and stocks for a longer time period and earn interest and dividends as rewards.
Types of speculators
- Bull: This is a speculator anticipating rise in stock prices. He purchases securities at current price having the ultimate aim to sell it at future date as price rises. He buys long, while creating pressure upon the prices, such that they increase. In case, the speculations go wrong, then rumors are spread that price is about to increase (bull campaigning is promoted, also known as market rigging). Bull spectators dominating the market are called bullish market.
- Bear: The bear speculator is said to anticipate fall in prices. He gets into a contract for selling securities at current price having a purpose of purchasing them at any future day, once price falls. He is termed to be a pessimist. With falling price according to his speculations, he buys the shares back. It is called selling short. Unlike the bull speculator keeping his head upwards, the bear speculator is said to keep his head down. He makes all efforts to bring prices down in stock market due to selling pressure called bear raid. If speculations go wrong, then bear squeeze occurs. It is termed bearish, if the market is dominated by bear speculators.
- Lame duck: They are termed to be desperate bear speculators. They are desperate, since they are committed by an agreement towards selling securities to buyers and shares are unavailable in share market. The deal will not be postponed by the buyer.
- Slag: The slag speculator is termed to be one who applies for securities having the objective that price shares will be listed at premium price at the stock market. He sells eventually the securities with increase in price. He also tends to create false demand by having sent numerous applications under various names. This type of speculator is stated to be a premium hunter.
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